Defi is the hottest topic in crypto space. More people are attracted to the project. What is actually defi? Defi is from decentralized finance. Traditional banking servive that is integrated in blockchain protocol. A depositor put their money in the platform and earn interest from loan and swap rates fee from the platform. The profit from the interest rates is not good enough but in defi , depositors will earn additional native token from the platform. Defi compound earns comp, Balancer earns Bal and all defi projects release its native tokens.

pic ; https://blockchain.news/news/has-defi-bubble-burst-top-defi-tokens-crash-50

WHY DEFI IS RISKY?

• Unaudited defi project by trusted company. Every developers or scammers can create defi project. They can create by claiming that the project has been verified by trusted and legal institution but investors should check the project first. Unaudited defi project is very vulnarable to misused of token value locked in the protocol and no one can sue the lost of the fund.
• Hacked or Exploited protocol
  The developers will announce that the system or the protocol is hacked and the token value locked lost. That is an old and traditional way to scam investors in ICO in 2017-2018. When investors are waiting for the developement of the projects, the developers announce that their wallet was hacked and the developers dissapeared.
• Burst defi token bubble
  The interest rate of token value locked is usually in stable coin. The rates is not siginificant in yearly profit. It is the same as traditional bank service. If the defi offer rare and too high interest rates, I think it is a kind of HYIP and irrational. What the defi offer is actually native token from the project. The token will be dump and pump in the market. There are big players or whales behind the defi bubbling native tokens. Investing in defi is not good for long term investment. For you who need secure investment, you'd better invest in old and trusted coins like bitcoin, eth, dash, and genuine coin that is in top 50 marketcap.

Defi era will end soon. There will be trusted defi project but the profit will not be as high as today. So be careful with defi project stay secure and save your asset in original cryptocurrency projects and coins.

Posted Using LeoFinance