DeFi watch out tips for beginners
Decentralized finance is rated as one of the least low-risk passive schemes in the crypto space, a list of income-generating activities a user can engage in while in the DeFi space includes staking, farm yielding, pool liquidity, lending, holding long-term/short-term, DeFi systems have contributed to crypto-asset growth where a considerable amount of a DeFi based token have been locked up in a pool to stabilize price value.
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Being a risk-free investment program has made several so-called DeFi based platforms rug pull, leaving their investors in utter dismay as their funds are being swindled into thin air without a trace of the so-called team behind such projects, cases of hacking on DeFi have also been on rising as these platforms are mostly a target for malicious users here I will highlight some important watch out tips a user needs to consider before joining a DeFi based platform.
Team every successful project need to have a credible team with zero crime record, running a background check will help interested beginner avoid lots of rabbit hole, and a project's transparency will help build investors' trust.
Credible team records are a must watch out for every investor who needs to avoid unnecessary rug pulling.Security check if there have been any theft records that lead to hacking issues, did the project carry out audit background checks, and what measures are taken to secure the project from external malicious software attacks.
Tokenomics total locked-up value, active users, and number of holding addresses are what should be taken into consideration here most DeFi platforms provide this information on their website homepage.
APY's this aspect is mostly used to determine the stability of a DeFi platform if the APY is insanely high maintaining the reward pool and token price will be very difficult for the team which could lead to a high token dump from investors.
It is worth noting that some DeFi platforms might meet all the above-mentioned watch lists and still rug pull on users, it's therefore advised for users to carry out more in-depth reviews on any project before investing real capital.
Want to learn about wox-defi a tron-based DeFi exchange on tron blockchain join their discord server to stay updated with the platform latest info and get support on how to start putting your ideal token into work.
hello @mccoy02,
Personally I believe that every project should be investigated before investing, knowing if the team that develops the project is committed and are very skilled people allows us to have more confidence in the project, people usually the only thing that interests them is the profitability of the project, so hackers and scammers offer a large return of capital to attract their victims who know nothing about the project and are only interested in making more money.
A lot of project have lured users with attractive return this prevent most investors from making any further research before making investment move i hope we learn from what are happening in the current investment world and make proper review before using capital on any project thanks for sharing.
So many scam projects are popping up dayily. It's very important to carry out a very sound investigation before investing. Thank you for this tips @mccoy02.
Sure the number are quite alarming, proper investigation will minimize losses thanks for sharing with me.
A good percentage of Defi projects have hidden team members; regardless,those projects are still successful. but yea, a credible team is an important thing to consider.
Sure you are right most DeFi projects i've come across barely disclose their team info and they are doing perfect.
Time lock... yes you can stay anonmyous... you should also see the team talking about the project. Check the twitter account, has the project good community.
There are a lot more, and this article should have explored that, it did not so its disapointing...anyway
Hi @mccoy02, thanks for these valuable tips you share with us, it is clear to me that all those aspects you mention must be taken to avoid our investment becoming a headache.
See you later, I will take into account your advice, have a great week.
Thanks for sharing your thoughts i'm glad you find these info useful sure necessary precaution measures need to be into account to avoid investment loop holes.
Well...
There are a lot more, you check and read the audit reports. They will point the weaknesses.
Rug pulls can be avoided if timelock feature is implemented, that is the smart contract is locked and so no rug pull is possible.
This article does not give all those essentials to look for when investing in DEFI project. anyway