I lost $5,000 in liquidity mining and want to share this painful lesson with everyone.

Two weeks ago, I finally gave in to my friends' "persuasion" and decided to enter the world of DeFi. At that time, the entire market was hyping liquidity mining, with applications like Sushiswap, Kimbap, Ulu popping up one after another, so I followed the trend and dipped my toes in.

The first time I saw annualized yields over 1000%, honestly, I was scared. I started asking myself: Is this real? How can I participate? Will the contract owner sweep my funds? But under the temptation of high returns, these doubts were quickly dismissed.

I researched the process, decided to first pair USDC and ETH on Uniswap to generate LP tokens, then stake those tokens in the Kimbap farm. I also carefully examined the smart contract code, compared it with other secure contracts, and even thought, "So many people have invested, it should be fine."

After I staked my first USDC-ETH LP tokens into the farm, that feeling was truly addictive—watching the Kimbap tokens grow every second, like money making money on its own. I thought, instead of chasing 1000% returns, I only need 300% to make a big profit.

Then I came up with a "genius plan": buy Kimbap tokens, pair them with ETH to generate LP tokens, so I could accumulate rewards faster than others, then quickly sell to break even. Excited, I bought a bunch of Kimbap on Uniswap, set up my new liquidity mining strategy, and thought, tonight, let my money work for me.

And the result? Before I even finished my coffee, the price of Kimbap had plummeted over 100 times. The value of my over 60k tokens was less than the gas fees I paid. At that moment, I finally understood a cruel truth: I am just another farmer, the source of high yields for others.

Later, I realized that normal DeFi yields—like Compound’s lending interest or Uniswap’s trading fee splits—usually range from 0-30% annualized, because you are genuinely adding value to the ecosystem. But those astronomical numbers reported by liquidity mining farms? They are essentially just old farmers taking profits from new farmers—a Ponzi scheme.

The native tokens of these farms—Kimbap, Sushiswap, Ulu, Pickle—should theoretically be worthless. But out of greed, farmers prefer to believe they won’t be the last fools, so they provide liquidity for these tokens, allowing others to sell at high prices. As long as there are buyers willing to take over, there will be a continuous stream of "farmers" rushing in.

My simple lesson:

First, never buy the farm’s native tokens. In the long run, their prices will definitely go to zero.

Second, new farms are often copies of old farms, with even greater risks.

Third, even if you think you’re cautious, always double-check the smart contract permissions.

Liquidity mining is a game that won’t disappear—so long as greed exists in human nature, there will always be new fools. All you can do is refuse to be that fool.