Why DeFi is high risk investment

[maldini]

I think DeFi venture is just for the brilliant speculators, in any case, I for one ensure that the DeFi venture. some venture that has a genuine use case and they are as yet holding their cost. Yet, DeFi ideas have genuine use cases so we can join a decent task and it can give us a decent profit for interests as expected and the entire crypto space is a high danger for venture. DEFI task won't keep going long on the grounds that the Ponzi framework truly hurts a great deal of speculators who will particularly look for their own personal benefits and can't reject that many trick casualties from this Ponzi plot.

[TopT3ns]

Many ICO projects came in 2017.  At first this ICO project has given a lot of profit and many scam ICOs have come and killed a lot of investors.  In 2020 a new concept has come which is called defi.  There are many deficiencies like the ICO concept of 2017 which is why investors are now afraid to invest.

I think the next problem is that an anonymous team will increase the risk because the price could be collapsed instantly, there are several projects in recent days, he has very few coins and can have a fairly expensive price, after that the developer adds supply it became more than 10 billion, and sure enough that a few moments later the price collapsed by -99% and hurt many people, so in my opinion, I really have to be careful with any project, which is dangerous not only DeFi, but all projects have high risks .

[Kong Hey Pakboy]

Many people says that DeFi is the new ICO. It is why they find DeFi a high risk investment because of it's sudden improvement on it's demand that it might suddenly fall down. Also, you could also have troubles paying high transaction fees in DeFi coins when it comes to converting them into fiat that makes you lose another profit.

[Pamadar]

Many ICO projects came in 2017.  At first this ICO project has given a lot of profit and many scam ICOs have come and killed a lot of investors.  In 2020 a new concept has come which is called defi.  There are many deficiencies like the ICO concept of 2017 which is why investors are now afraid to invest.

I think the next problem is that an anonymous team will increase the risk because the price could be collapsed instantly, there are several projects in recent days, he has very few coins and can have a fairly expensive price, after that the developer adds supply it became more than 10 billion, and sure enough that a few moments later the price collapsed by -99% and hurt many people, so in my opinion, I really have to be careful with any project, which is dangerous not only DeFi, but all projects have high risks .

All projects needs to be studied conduct proper research before investing your money.

Not just the DeFi one indeed, every investors need to take time understanding the purpose of any projects that they'll going to pick for their investment. Not just focusing with the hypes and trying to ride and quit while its still hot as chances to be burned is always at risk, instead, try to work it out and engage whenever you're done completing your studies.

[nutildah]

DeFi is dead or dying. It ain't coming back. It was extremely overblown in the first place and actual usage of DeFi products for the purposes they claim to be built for is near nonexistent. Just got to wait for somebody to launch GainzCoin where flat out the only thing it does is get massive Gains bro. Oh they already have that, its called HEX. Oh well something else then.

[nikola22]

among DeFi projects there some relatively reliable, for example Aave, Chainlink or Synthetix. don't forget that they are novices at the market so the price volatility is common for them.

[kpierce77]

among DeFi projects there some relatively reliable, for example Aave, Chainlink or Synthetix. don't forget that they are novices at the market so the price volatility is common for them.

Yeah, Chainlink is really good, I think it's almost the best DeFi platform this month. For the point 3 of the OP, I think everyone knows that crypto prices have very high fluctuations, and also defi is an immature trend. I just hope newbies who want to invest need to learn at least the basics of investing in crypto.

[Lantind]

I think it is very risky to invest in defi projects because many new defi projects are spreading and most of them are scams and some of them even mimic names and change the information so that they can believe investors whose project is legit and other defi projects are even called manipulation due to the rapid fall in the price of defi coins.

Yes, the risk posed by the DeFi project is indeed very large and it will be very detrimental to follow it, but for the original DeFi project there are also good ones even though the average from DeFi which is currently a copy of the original, because the scammers are already very good active at the moment.

[lobo13hf]

among DeFi projects there some relatively reliable, for example Aave, Chainlink or Synthetix. don't forget that they are novices at the market so the price volatility is common for them.

They have started from nothing to something but i should remind you about chainlikn, aave, synthetix have backed by the reliable developers. It's different with so many scam defi who has been running by the anonymous developers. I personally think that if a defi project that didn't wanna reveal its team will always be a scam defi.
We have seen bunch of scam defi in the market.

[InwardContour]

My issue with most DEFI projects is that they offer insanely high APY for farming, which later have a negative effect on price. For instance PANCAKESWAP (CAKE) after giving very high farming APY, the farmers dumped heavily and still weighing down on the price. Investors who buy to hold are usually affected in this regard. Another example is DXY which offered 6000% APY for DXY/ETH farming pool, this crashed the price after farmers dumped from above 20$ to 1$, you can imagine what becomes of holders.

[ven7net]

Here are reasons why DEFI is a high risk investment

1. A glitch in the system can lead to loss of funds or blocking of all assets

2. Developers boost that their codes are impenetrable but they can't oversee how users interacts with applications and platforms, meaning human errors are inevitable.

3. Market is very unpredictable and there is no any form of insurance available for investors, they risks of losing fund is very high

4. YIELD FARMING

Yield farming means the creation of tokens to reward users who provide liquidity to a project, meaning it's a must for users to invest their tokens on the project, you won't be able to trade or sell.

Today many projects are going into DeFi because high yields are offered and investors want quick profits too .

With DeFi the risks are insanely bigger compared to ICO.

I recently got acquainted with DeFi projects and unfortunately mostly my experience in them turned out to be bad. So far, all the DeFi projects I've been involved with have failed. Of course, I understood the risks and most of all I did not like the fact that the teams of all projects wanted to remain anonymous, which gave them the opportunity to easily come to the market and leave. When comparing DeFi projects to projects in a different direction, then DeFi projects have a greater risk. Based on this, I have now begun to trust DeFi projects a little and try to bypass them.

[Princeofpoetry]

actually not only DeFi has high risk but all cryptos have high risk. so be wise in determining investment options

[CaptainDeFi]

https://www.youtube.com/c/PEAKTechDEFI/videos those guys are really helpful, they're explaining DeFi pretty well