3 ways to lose your money with DeFi
If you decide to invest in DeFi, you must be aware of the dangers and challenges to face. My last post was about difficulties that a newbie can face when choosing the right wallet, registering on the stock exchange, etc.
Today I will tell you about three problems that can lead you to losing money. And it’s all because of lack of experience in DeFi.
Problem 1
After conducting research, choosing a wallet, and replenishing money for the first investment, 80% of the time there’s always a problem 1 — the incompatibility of the chosen wallet with the DeFi project platform or the incompatibility of the Defi website with your browser.
I’ll tell you my story. After I replenished Metamask I wanted to invest in PancakeSwap and faced the incompatibility of the Defi site with this wallet (although it is listed among possible integrations).
I decided to use some help and found out that the DeFi site has its own Telegram community where I could describe my problem in a general chat.
A few minutes later, the chat administrator replied via direct and asked me to describe the problem in detail. I was delighted with such a great and fast support system!
While I was typing the message, two more admins from the support wrote to me. Great, the guys have the highest level of service!
I answered everyone. And all three advise me to follow the link to reconnect my wallet with the DeFi site. But I noticed that each admin gave his own link — it was the first red flag.
Red flag number two. After clicking on them I was supposed to enter 12 keywords from my wallet. When you share these words with someone unknown, wait for about 5 minutes to see your money being withdrawn from the wallet. So yes, I met scammers. They change one letter in a support’s nickname, answer questions under the guise of support, create the illusion of help to get my data, and steal my money.
There are so many scammers that sites either hamper the safety of their customers or simply do not have time to track them all.
So don’t make such a mistake — guard your data with your life.
Problem 2
When you put money in DeFi for farming, they can “leave” your wallet, but at the same time, they might not be credited to the platform. Thus they are credited, and then at one point, the balance becomes zero. And all because analytics went off in the liquidity pools due to errors in smart contracts and in the project backend.
In the liquidity pools, the interest rate floats every day. Today you can enter at 360% of the annual interest on deposits, and tomorrow the rate drops to 120% and below because the exchange has lost the need for this pair. Thus you need to read the conditions very carefully.
Problem 3
DeFi vampires exist. This is dumping with an overstated % rate from new sites that lure investors from other platforms.
Imagine that you have passed all the problems described above. For investment, you have chosen pharming with a crypto pair (for example) with an income of 100% per annum. You invest 10K with the hope to withdraw 20K in a year.
But then a new platform appears, which offers, say, 600% for the same pair and declares this in the crypto community on Reddit. What happens next: people believe and spend their money in favor of the new site. The liquidity on your site falls, the % rate decreases accordingly. And the new site, after receiving investors at 600%, quickly closes its offer.
Keep in mind
Before you start investing you need to be tech-savvy as there’s a great risk of losing or devaluing your money through ignorance or lack of information.
Just like last year Sushiswap, the “vampire mining” protocol, took more than $1 billion of liquidity from Uniswap.
Generally in pharming, the profitability of the platforms always floats and such investing needs you to keep the finger on the pulse. You can’t just invest and relax.
Yes, it is quite complicated. If you do not want to lose your money with Defi, go to eztrade24.com get registered and open access to our close investors community.
