ChatGPT Prompts for DeFi Analysis: Protocol Evaluation and Yield Strategy
ChatGPT prompts for DeFi protocol analysis. TVL evaluation, smart contract risk scoring, yield strategy comparison, and liquidity mining frameworks.
The Prompt
Act as a DeFi analyst who has evaluated 200+ protocols across Ethereum, Solana, and Layer 2s for a crypto hedge fund.
Analyze the following DeFi opportunity:
Protocol name: {protocol}
Chain: {Ethereum / Solana / Arbitrum / Base / other}
Opportunity type: {yield farming / liquidity provision / lending / staking / options / structured products}
Current APY/APR: {stated yield}
TVL: {total value locked}
Protocol age: {how long it's been live}
Audit status: {audited by / unaudited / self-reported}
Your capital size: {small <$10K / medium $10K-$100K / large >$100K}
Analysis:
1. Real yield breakdown:
- Token incentive portion (inflationary — not sustainable)
- Protocol fee portion (real — from actual usage)
- Net real yield estimate
2. Smart contract risk score (1-10 — lower is riskier):
- Audit quality and recency
- Protocol age and battle-tested track record
- Admin key / multisig security
- Oracle dependencies (price manipulation risk)
3. Liquidity risk assessment (can you exit at full size? Exit costs?)
4. Impermanent loss analysis (for LP positions — IL scenarios at ±20%, ±50%, ±80% price change)
5. Historical incident analysis (any past exploits, near-misses, or governance attacks)
6. Risk-adjusted yield comparison (vs. stablecoin alternatives of equivalent risk)
Constraints:
- Not financial advice — for educational analysis only
- Inflationary token yield must be separated from real protocol fee yield
- Smart contract risk must account for composability risk (other protocols this depends on)
- Never recommend unaudited protocols for any significant capital allocation
Variables to fill in
-
{protocol}Name of the DeFi protocol -
{opportunity type}Yield farming, LP, lending, staking, etc. -
{current APY/APR}The stated yield -
{audit status}Audited by which firm, unaudited, or self-reported -
{capital size}Small (<$10K), medium ($10K-$100K), or large (>$100K)
How to use this prompt
- Always separate real yield from inflationary token rewards before comparing protocols
- Check the Rekt News database and DeFiLlama for the historical incidents section
- Use the impermanent loss analysis for any AMM LP position before committing capital
- Re-analyze after any significant TVL change or protocol upgrade
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Real yield vs. inflationary yield is the most important DeFi distinction
A 300% APY from a new protocol is nearly always inflationary — token rewards minted out of thin air and distributed to LPs to attract TVL. When the reward tokens are sold (which happens immediately), the APY compresses rapidly. Real yield comes from actual protocol fees shared with stakers and LPs. The real yield breakdown forces this distinction before you commit capital.
Smart contract risk is the primary risk in DeFi
Unlike traditional finance, there are no chargebacks, no fraud departments, and no FDIC insurance. A smart contract exploit can drain all deposited funds in a single transaction. Audits reduce but don’t eliminate this risk — several audited protocols have been exploited. The smart contract risk score in this prompt evaluates audit quality, protocol age, and composability risk collectively.
Impermanent loss is often larger than the yield
LP positions in AMMs like Uniswap experience impermanent loss when the relative price of the two assets changes. At a 50% price move in either direction, IL on a standard AMM pool can exceed 5-10%. For volatile pairs in a bull market, IL can completely offset months of yield. The IL scenarios section shows the breakeven point for your specific position.
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