Let's be honest. You’re reading this post for one of two reasons—you’re already up to your neck in DeFi, or you know you need to be. You may have experimented with yield farming, perhaps even profiting in the process. But are you really making money? Or are you simply renting from the Ethereum network’s landlord?

I'm betting it's the latter. And that’s because manual yield farming will be extinct by 2025. It’s not just an idea on the way out, it’s a whole idea long gone for many of us. Here's why:

Gas Fees Kill Small Farmers

First, assuming all retail yield farmers need to account for gas fees, opportunity costs, and impermanent loss, 73% of retail yield farmers are losing money. Let that sink in. You’re better off betting the opposite way and losing money. Think of it like this: you're trying to pan for gold in a river, but every time you scoop, you have to pay a toll to the troll under the bridge. The troll (Ethereum gas) eats so much, there’s almost nothing left for you.

Now, it’s not only the high raw cost, it’s the rate at which frequent costs can add up quickly. Manual farming requires a very active engagement with smart contracts – depositing, withdrawing, claiming rewards, rebalancing. Each action is a gas-guzzling transaction. Automated platforms, such as Sensi Finance’s SmartYield, batch these transactions, cutting gas fees by an astounding 80-90%. That’s what makes the difference between just making it and really doing well. Now, picture using that saved money to accumulate even more assets, rather than passing it along to miners.

Your Time Is Worth More Than That!

Seriously. How many hours per week are you currently researching liquidity pools, tracking and managing impermanent loss, and manually rebalancing your portfolio? 8-20 hours? That's a part-time job! And what's the hourly rate? Probably less than you'd make flipping burgers.

Consider this: what could you be doing with those 8-20 hours? Learning a new skill? Spending time with family? Building your own business? The opportunity cost of manual yield farming is truly astronomical. It’s the equivalent of spending all day clipping coupons to save $5, while stepping over a $50 bill on the sidewalk.

Think of it this way: You wouldn't manually manage your stock portfolio every hour of the day, would you? So, you’d either go the route of a robo-advisor or a financial planner. Automated yield farming is the DeFi equivalent. Stop wasting time with administrative tasks and let the algorithms do the heavy lifting so you can spend time on what matters most.

Impermanent Loss: The Silent Killer

Impermanent loss is one of the DeFi’s worst-kept secrets. You think you're earning a juicy APY, but then you wake up one morning and discover you've lost a chunk of your principal. It’s akin to discovering a hole in your pocket – your hard-earned dollars are trickling away without you ever having a clue.

We find manual farmers frequently don’t account for impermanent loss. With volatile liquidity pairs, you can be guaranteed to lose between 5-25% of your initial investment. That's not chump change! And unless you're constantly monitoring your positions and manually adjusting your strategy, you're likely to get burned.

Automated platforms work to prevent impermanent loss by offering diversified pool selection with automated rebalancing and advanced risk management strategies. They’re not perfect, and impermanent loss is still a risk, but they greatly reduce your exposure. It’s the difference between using an expert security service versus just a weak bolt lock on your front door.

Institutional Grade is Coming

DeFi is maturing. What used to be a Wild West is coming under greater scrutiny and becoming a more disciplined and institutionalized space. And with that – including, in no small part – comes institutional-grade tools and strategies. Manual yield farming is just too unwieldy and risky for large institutions to get involved. They require automated, performant solutions that can move that much capital at speed and scale while managing a huge range of risk.

This is the gap platforms like Sensi Finance, through their SmartYield platform, are designed to fill. They provide the level of sophistication and efficiency that institutions require, but available to retail investors. Wealthsimple Trade It’s the equivalent of having access to the same sophisticated trading tools that a hedge fund manager does, but at no cost.

Complexity Will Crush Novices

DeFi is complicated. It requires a huge steep learning curve, and the environment is ever-evolving. New protocols, new token launches, new yield strategies – it’s enough to give anyone whiplash. The bottom line is that manual yield farming is just not a realistic option for the average investor to pursue profitably.

Automated platforms simplify the process. They take care of all the technical know-how so you can just think about the big picture. Similar to how you would use a GPS when navigating a city rather than attempting to do so with a paper map. You might still have to choose your destination, but the GPS figures out the best route to get you there and drives the car for you.

Security Audits: A Must-Have, Not a Luxury

We all know that the DeFi space is full of scams and hacks. Rug pulls, smart contract vulnerabilities, exploits – these dangers are just as real and ever-present. Manual farmers are often left to fend for themselves, relying on their own limited knowledge to assess the security of different protocols.

Well-known automated platforms are subject to multiple security audits from firms such as Hacken. This doesn’t remove any risk — let’s be real, nothing is perfect and the risk of being victimized by a scam or hack still exists. It's like buying a car with airbags and anti-lock brakes – it doesn't guarantee your safety, but it significantly improves your chances of surviving an accident.

Decentralized Power To The People

Manual yield farming rewards centralized power to those that are willing to pay the gas fees. It skews towards those who are able to spend the time to engage in the process. Automation levels the playing field. It levels the playing field for anyone to participate in DeFi. Today, they have access to some of the most sophisticated investment strategies formerly reserved for institutions.

This is the true promise of DeFi: to democratize finance and put power back in the hands of the people. Manual yield farming, with its high barriers to entry and inefficiencies, is a barrier to that promise. Automation is the key to unlocking it.

So, is manual yield farming dead? Not yet. But come 2025, it will be nothing more than a relic of the past, a footnote in the history books for DeFi. The future is automated, and the future is today. Don't get left behind.