The year 2020 in the digital currency market can be called the year of prosperity in the field of Defi. Atrium, as the growth platform for these projects, has benefited the most from the development of a decentralized economy. Investing in Defi is very rewarding. But sometimes we have seen sharp drop in the price of these projects.
In this article, we will introduce 9 strategies for capital management to get the highest benefit from the growth of this field.
Defy domain in the digital currency marketFinancial markets have cyclical behavior and we always see periods of recession and prosperity in them. In 2017, the digital currency market was booming and there was a strong uptrend. After that, we saw a period of stagnation in the market; We witnessed erosive downward trends and a significant reduction in trading volume and money out of the market. But in 2020, two and a half years after the last bullish market, the development of Defy projects has once again started the bullish trend in the digital currency market.
What is DeFi; Introducing its important challenges (Part 1)
In 2020, Atrium, as the market second cryptocurrency, snatched the lead from Bitcoin and became the focus of the cryptocurrency market. The number of transactions in the Atrium network, as well as the network fee, exceeded the bitcoin network. Defai projects were noticed by everyone and were able to attract new people and capital. For example, China's DeFi Link project with the digital currency Link ranked fifth in the market, higher than many of the old cryptocurrencies in the market. The Atrium ecosystem took over the market. Atrium experienced market leadership in 2017 with the growth of ICOs, and this year, with the growth of defai, it reappeared in the role of market leader. The big difference between Atrium 2017 and Atrium Today is that this network has changed fundamentally and also the projects that have been launched on this network are more mature than in 2017. However, we still have to be careful of projects that carry a very high investment risk so that the same experience of 2017, which caused a severe collapse and complete destruction of some cryptocurrencies, will not be repeated. Here are 9 tips for people who want to invest in Defay. Paying attention to these points will make us take more care of our capital and identify the investment risk in this area.
Do not follow everythingPerhaps the biggest hottest spot in the field of defense is Yield Farming. Protocols that reward suppliers in return for raising capital. This is a new way of earning money for digital currency activists. Since no investment will be risk-free, this area also has risks. The Yam Finance project, for example, raised $ 600 million on its first day. After that, there was a technical problem in the network that caused problems with the project management. After that, all the people who participated in providing liquidity for this project faced problems.
Meet Yield Farming; A new way to earn money from Difai!
Difai is currently in the spotlight. Market leaders are optimistic about the future of the field, but not all of this should preclude careful research and investor scrutiny in selecting a project. Defy projects are profitable, but not all of them. When choosing this area, be sure to have a comprehensive personal review.
In the positive atmosphere created, bad projects also growIn any market where excitement prevails, it will be a good ground for fraudsters. At some point, almost all currencies in the defense sector grew by several hundred percent. This excitement is the right time for fraudsters to arrive. Malignant actors are expected to enter the field if the upward trend of Diffie projects continues in the coming months. One of their usual tricks is to exploit big projects and come up with similar ideas. If you come across a project that poses no risk to you and all of their programs are focused on making a profit for you, avoid it immediately. There is no risk-free investment in the financial markets.
More information = deeper insightGetting information on digital currencies and blockchain networks is undoubtedly the best way to deal with fraudulent projects. Be sure to pay special attention in choosing your study resources. Scam projects usually use a strong advertising team and may take over many media outlets and make it difficult for you to find the right and accurate content. For this reason, be sure to use reliable sources for information. But due to the ever-expanding media and the existence of diverse platforms, we will hardly face the problem of information poverty. Social networks and reading the opinions of users of each network can also give us a detailed view of the projects. Below is a list of reputable sources for DeFi projects:
DeFiPulse - one of the major platforms for providing information on Defai projects
Coingecko - Similar to Kevin Market Cap for Defy projects
Dune Analytics
Zapper
Have your own criteriaThere is almost no shortage of information in the cryptocurrency market. Because it is decentralized, almost all information is available to everyone. But to check this information, you need basic technical knowledge. The first step is to know the words and their meanings.
Volume: Shows the volume of trades in a specific time period. The volume of transactions is a certain number of digital currencies that are exchanged over a period of time.
New Bainance Trading Tool (DeFi Index) introduced; Supply a basket of Difai projects
Total Value Locked: This term is usually displayed with TVL. TVL is a standard for diff projects that refers to the amount of capital available in a diff project. The capital managed by each project is called the TVL of that project and shows the total amount of capital locked in that project.
Dominance Rate: This index compares the market value ratio of a project with the total market value of digital currencies. This index is also used for defy projects. Among DeFi projects, Uni Swap currently has the highest mastery index with 19%. In fact, 19% of the total TVL of Defy projects are in the Uni-Swap project.
Fee: The fee that each user must pay to complete a transaction between DEFA projects.
Circulating / total supply: Total supply refers to the total available assets of a digital currency. In the case of Bitcoin, for example, the total assets are 21 million units. For all defy projects, the total amount of tokens available is a fixed number. circulating is the amount of assets in circulation of each digital currency.
Note the price of GasIf you use the Atrium network, watch out for the price of Gas. Gas is the transaction cost in the Atrium network. The transaction fee in Atrium network is paid by Ramzarz Ether (Atrium). Because Diffie projects are launched on the Atrium network, all transactions are paid for with Ether. In recent months, transaction fees in the Atrium network have increased significantly, so pay attention to the price when making a transaction. If you are in a situation where you need to make a transaction, use resources that show the current state of the network. In the hours of the day and night, the network density is reduced and in such a situation, the transaction fee will be lower. Many sources provide such information to users that they can refer to the Atrium Network for a fee.
Recognize decentralized exchangesMany activities and price increases take place in the foreign exchange market, which are traded in decentralized exchanges. Therefore, you should get acquainted with DEX or decentralized exchange and how to snake them. Naturally, if you are new to the digital currency market, the concept of decentralized exchange may be a bit confusing. Studying the guide of each of these exchanges and making a transaction with low capital can help you a lot. Among decentralized exchanges, uniswap has the most liquidity and is the largest exchange among other decentralized exchanges. Uni swap is a good place to start working with decentralized exchanges. The following are the names of the decentralized exchanges:
- cyber
- Balancer
- 1 inch
- Curve
- Matcha
- Mesa
- Bancor
Monitor your favorite projectsWhen it comes to investing in a Defy project, try to follow all the communities in that project. Follow the management team, the development team and all their user accounts on the social network. Participate in discussions and discussions in Miami, the fans of a network, and try to be constantly aware of what is happening around a project.
In the digital currency market, two social networks, Twitter and Reddit, are usually used more than other platforms. In addition, many networks have telegram channels and groups that contain valuable information. Try to find all the tools and means of communication of each network team and follow them all.
Beware of sharp price fluctuationsPrices in the digital currency market are changing rapidly. Sometimes we see the price of a digital currency increase tenfold, and a few months later we see a sharp fall in the same cryptocurrency. This is a feature of the digital currency market. So prepare for the sharp price fluctuations. These price fluctuations are usually not visible in any other market. This is a feature of the digital currency market. If you are considering a lower risk investment, reconsider your choice, this market is probably not the place for you.
Security; It is the key of this marketMaintaining security is always a priority. There is more need to pay attention to security issues in the digital currency market than in other markets. This market, and blockchain technology in general, is a new technology, and naturally has ambiguities for the general public, and this ignorance and lack of technical information has provided a good platform for fraudsters. Especially when choosing a digital wallet, make it your number one priority. Beware of phishing scams. Do not give out your private address or the phrase of your recovery when creating a wallet. Whoever has the phrase to recover a wallet will own it; So be very careful.
