Why DeFi is high risk investment

[zasad@]

People, you are too keen on chatting about the DEFI scam. Hamsters invest in projects that promise a profit of 3000% per year .. then you understand what is happening.

You forgot one important wisdom of cryptocurrency: Not your keys, not your crypto "

If you want to use DEPHI safely, start with Uniswap.
This project has proven itself well, its smart contracts are reliable, and it has been audited
https://github.com/ConsenSys/Uniswap-audit-report-2018-12

You can trade any asset and are not afraid of being blocked.
But keep in mind that some tokens can be blocked by the owner of the smart contract.
https://bitcointalk.org/index.php?topic=5247581

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[wildflower18]

A lot of defi project these days and some people attracted to the return of profit that they can get. Farming/ staking which other interested to invest more the quick profit offer. Also, we notice in social media platforms a lot of defi projects promoting there so this is also a warned to others to be careful when investing.

[Rexler]

Investing in DeFi seems to be a bad idea right now, with the rate of DeFi ponzi increasing its no longer safe to invest in any DeFi project now, the smart ones are the early birds that invested much earlier when DeFi was not all over the place, they made off with some good amount of profits from it  before the DeFi hype started fading away, while the late comers are the ones investing now and end up getting scammed, DeFi is more like a ponzi now, we should just tread carefully.

[xiboothrezi]

When a new trend emerges that is of interest to the market, it will inevitably be followed by various follow-up projects that follow the "footsteps". Whether the concept is good or not, the product is good or not, safe or not, many people are competing to create projects under the guise of DeFi. Since this is a trend, it's easy to lure people with fake "liquidity" and then leave immediately when their coffers are full.
That's why we have to be really thorough and not FOMO.

Only people who are greedy and want instant profit who go with the flow without consideration. It doesn't seem like it's effective enough in the long term either, so decide on the best strategy and analysis, hit and run if possible. Remember, it's not DeFi's fault, it's a very useful concept. The problem is the people who abuse this to deceive people.

[lienfaye]

High risk was always a big part of crypto investments, scams as well.
Yeild farming is a very sketchy thing, I'd call it a scam, but thats debatable.
Defi projects do differ from each other a lot - some ICOs are scam, some of them are good opportunities for small projects to grow

We know the high risk of investing in defi yet many of us are still following the hype to earn huge.

Well we cant really get rid the scam on crypto thats why we need to be more careful, usually high return is associated with scam and its up to us if we're going to bite the offer.

Although not all defi projects are scam but some of them are just hiding under defi to take advantage the weakness of investors of being greedy.

[fadhilz123]

For me, because the Security our fund. Our funds are not safe if we invest in defi, but If we invest in top coins like Bitcoin, Ethereum, Litecoin our funds will safe we did not worry anymore about dumped sharply, but in defi opposite in Defi maybe today valuable but tomorrow we don't know..

And if doing deep research we will realize so many defi projects builds based on Ponzi scheme

[tabas]

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.

These devs don't also take chance to think of the biggest risk of their platform, the security. Hacks are recently happening to defi projects and if they will keep ignoring it, we can assume that defis are about to end its hype very soon. Just like the banks, they are giving importance the security of their depositors.
Whilst in defi, it looks like it isn't much of a discussion to them.

[AliMan]

I see the current passion of DeFi & Yield Farming as the heyday of ICOs, the same high risk of taking advantage of the current hype so that many DeFi scam projects have sprung up

We need to monitor those upcoming projects if they're legit enough on every activities that they have. That's very important to determine which particular aspects of DeFi project will come out as scam, not only accusations but also proofs of evidence. It's really hard to point out one of them because this is a serious matter. Taking risks always fails everybody, so don't ignore every disadvantages.

[gabbie2010]

A lot of defi project these days and some people attracted to the return of profit that they can get. Farming/ staking which other interested to invest more the quick profit offer. Also, we notice in social media platforms a lot of defi projects promoting there so this is also a warned to others to be careful when investing.

I must confess I am scare of investing in any DeFi related project going by the the high returns and profits to be earned this is quite similar to a Ponzi scheme, I wonder why some investors do so despite all the warnings I remembered days of investing in ICOs wasn't as risky as DeFis, so many types of this projects are out in the cryptosphere now, how are investors in DeFis are making profits?

[btc-facebook]

To this day I am not interested in investing in the DeFi project, because from the start I saw DeFi has a big risk, it's just that many people do not understand the scheme,
I think ICO or DeFi have the same big risks even though in several different aspects, but somehow it is risky and as investors it's better to focus on minimizing risk rather than profit, this is an important point.

[Mpamaegbu]

Out of all the DeFi projects I did research on I only prefer Chainlink, the data Oracle thing makes more sense to me than anything and that's why Chainlink was successful even before DeFi hype started this year, another new project that works with Oracle is dia, these are more than just mere yield farming, goodluck to all those who are into yield farming, I hope it favours them in the end.

DIA? But the price is shitty this day. Do you ever for see a situation where it's going to lift itself out of the $1 - $2 range? A lot of investors are bemoaning their loss already.

Defi is really a risky investment .If you look at biggest gainers and losers chart now in Coinmarketcap/Coingecko you will find defi coins both in gainers & losers table . You can profit very fast in Defi and also you can loose
everything very fastly.

Generally? Isn't that the way of business? Simply put — there isn't any business without inherent risk. What determines levels of risk is subjective to individual investors.

[Reid]

With DeFi the risks are insanely bigger compared to ICO.

Before: High risk, high profits.
Now: Insane risk, insane profits.  What could be next?

With ICO, I can go make deep research and filter good projects to at least make the 10 percent success into 20-30 percent.
With DeFi, it's difficult to see that. It's like you are investing blind. Almost like gambling.

[riso2015]

To this day I am not interested in investing in the DeFi project, because from the start I saw DeFi has a big risk, it's just that many people do not understand the scheme,
I think ICO or DeFi have the same big risks even though in several different aspects, but somehow it is risky and as investors it's better to focus on minimizing risk rather than profit, this is an important point.

I have invested several times in defi projects, at first time I made a lot of profit, 100%. But the next time I never got any more profit, because when listing on the Exchange, their coins dumped up to 50-80%. Until now I have given up on investing in the Defi project. 

[FairUser]

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.

Yes. The investments in defi at this time always go cream with a huge SCAM ratio. But it's also very basic to easily dispose of such projects, I have witnessed just because of the transaction cost that it cannot make the transaction. Specifically, on the ETH network when the number of transactions in the network is too large, we have seen a fee too large to confirm the transaction. But if comparing the returns between Defi and ICO, I think the rate of risk and return is the same.

[crypticj]

There are a lot of reasons for this. The main one is about hype. This industry is alive only while hype around it is alive. Do you remember ICOs? Only really small percent of them were successfull

[Rowenta]

For those who are cautious it's easier to turn away from DeFi projects because they have insane or unrealistic returns, like kinda rewards you can only see from HYIP projects, this is why I don't feel like Investing on any DeFi projects, only few that existed since years back are good, atleast they aren't in for the HYPE, they are here before the HYPE started.

[LogitechMouse]

A lot of defi project these days and some people attracted to the return of profit that they can get. Farming/ staking which other interested to invest more the quick profit offer. Also, we notice in social media platforms a lot of defi projects promoting there so this is also a warned to others to be careful when investing.

I must confess I am scare of investing in any DeFi related project going by the the high returns and profits to be earned this is quite similar to a Ponzi scheme, I wonder why some investors do so despite all the warnings I remembered days of investing in ICOs wasn't as risky as DeFis, so many types of this projects are out in the cryptosphere now, how are investors in DeFis are making profits?

If you really want to invest into DeFi projects then just invest in Chainlink. The coin has already solidify its spot for the top DeFi project as of now since for me its the most successful DeFi project. Lots of partners, developments coming out and the upgrade is there. Just invest on that DeFi project and not on others.

As for the DeFi in general, this is the reasons why I don't invest on it at all or maybe I will on ChainLink too if I have some spare money to use. Lots of risks, the rewards are higher obviously but most of them are just pump and dump tokens which will end up worthless in the long run.

[purka5]

A lot of defi project these days and some people attracted to the return of profit that they can get. Farming/ staking which other interested to invest more the quick profit offer. Also, we notice in social media platforms a lot of defi projects promoting there so this is also a warned to others to be careful when investing.

I must confess I am scare of investing in any DeFi related project going by the the high returns and profits to be earned this is quite similar to a Ponzi scheme, I wonder why some investors do so despite all the warnings I remembered days of investing in ICOs wasn't as risky as DeFis, so many types of this projects are out in the cryptosphere now, how are investors in DeFis are making profits?

If you really want to invest into DeFi projects then just invest in Chainlink. The coin has already solidify its spot for the top DeFi project as of now since for me its the most successful DeFi project. Lots of partners, developments coming out and the upgrade is there. Just invest on that DeFi project and not on others.

As for the DeFi in general, this is the reasons why I don't invest on it at all or maybe I will on ChainLink too if I have some spare money to use. Lots of risks, the rewards are higher obviously but most of them are just pump and dump tokens which will end up worthless in the long run.

The price of Chainlink is to high because it has a good liquidity. But it may drop in every minute. Other assets do not have so big liquidity and they have a small price. Many of them are traded only on decentralized exchanges. To attract users to buy their coins sometimes they use staking system that allows to pay reward for holding tokens not to sell them. Here some information about staking https://medium.com/bonfiorg/introducing-bonfi-web-staking-7368467d18cc

[imstillthebest]

a glitch in the system not only can cause loss in the dev and our fund but it can also be a loss in the devs side only but a gain to our . few reports about glitch are said to cause users earn millions worth of cryptos  . they are lucky but this isnt also easy to figure out . this doesnt work automatically like when theres a glitch your balance will double but you need to do something .

the second is no code is perfect but all can be hack or can experience an issue , if someone says their codes are perfect then they can be lying .

rest you said are true

[Squezzi55]

A lot of defi project these days and some people attracted to the return of profit that they can get. Farming/ staking which other interested to invest more the quick profit offer. Also, we notice in social media platforms a lot of defi projects promoting there so this is also a warned to others to be careful when investing.

I must confess I am scare of investing in any DeFi related project going by the the high returns and profits to be earned this is quite similar to a Ponzi scheme, I wonder why some investors do so despite all the warnings I remembered days of investing in ICOs wasn't as risky as DeFis, so many types of this projects are out in the cryptosphere now, how are investors in DeFis are making profits?

If you really want to invest into DeFi projects then just invest in Chainlink. The coin has already solidify its spot for the top DeFi project as of now since for me its the most successful DeFi project. Lots of partners, developments coming out and the upgrade is there. Just invest on that DeFi project and not on others.

As for the DeFi in general, this is the reasons why I don't invest on it at all or maybe I will on ChainLink too if I have some spare money to use. Lots of risks, the rewards are higher obviously but most of them are just pump and dump tokens which will end up worthless in the long run.

The price of Chainlink is to high because it has a good liquidity. But it may drop in every minute. Other assets do not have so big liquidity and they have a small price. Many of them are traded only on decentralized exchanges. To attract users to buy their coins sometimes they use staking system that allows to pay reward for holding tokens not to sell them. Here some information about staking https://medium.com/bonfiorg/introducing-bonfi-web-staking-7368467d18cc

ChainLink don't just grow insane liquidity because of staking, that project rocks among hundreds of altcoins out there, this is a real useful crypto project, chainlink deserves the position it is in today and thanks to the hardworking team, people need to start putting successful projects side by side with pump and dump projects to understand their differences.