Please Remember, DeFi and DEX Investments are RISKY

One more time for the people in the back

It wouldn’t be a new year without a couple of SNAFUs.

In fact, I’m starting to think it wouldn’t be the 2020s without a few of them too—almost as if this decade is going to be defined by them, both small and large. And if you’re paying close attention to the crypto world, there are have already been a few big blunders. All serve as reminders—investing in cryptocurrency is a risky endeavor, and it is easy to get burned.

Badly.

So while yes, as Matt Damon proclaims in those Crypto.com commercials, “fortune favors the brave”, let’s remember that sobriety helps. A lot.

On New Year’s Day, for example, a decentralized exchange (DEX) that I have used to convert cryptos in the past announced a major breach. Hackers exploited a previously unknown weakness and managed to steal a few million in assets before the exchange stopped it. People got hurt, and the exchange alerted everyone who might have assets on the platform to please take the money out as soon as possible. As of this post, that platform is still down and developers are scrambling to repair it.

I’m not naming the exchange in this post because that is irrelevant.

The fact is, hackers tend to target ALL the DEXs out there, just like they target banks, credit cards, email lists, and the like. We live in a global society linked by the internet and hackers want to exploit every part of it. Cryptocurrency is no different.

So, here’s another alert from me—just as you would do your own research about investing in a crypto, please also do your own research about any DeFi or DEX applications that you want to use.

Not all these platforms are the same.

We talked at length about this last Monday in a Twitter Space I host on Monday nights at 7:30PM EST. I’m joined there weekly by a friend named JT who is also a crypto YouTuber. You can check out JT’s YouTube here.

JT made a few finer points about DeFi that I also want to pass along here. He recommended taking a few extra steps. First, he advised that listeners only place an amount on a DEX or DeFi platform that they are willing to lose. Second, he suggested removing that liquidity from such platforms if it cannot be regularly monitored (such as traveling overseas or because of lifestyle changes). Third, he brought up the idea of having a wallet just for DeFi, and fourth, testing everything out with small transactions before jumping in with large deposits.

And JT is overall not a fan of meme tokens, either, which are abundant on DEXs and DeFi applications.

Good advice.

The point is—just be careful.

High risk, high reward always applies when it comes to crypto, but especially when it comes to DeFi and DEX. Take the risk, but don’t lose your head.

The Crypto Connection is for entertainment purposes only and is not meant to be financial advice. Please do your own research before investing in any asset class. Sara Celi is not a financial advisor, and holds several cryptocurrencies. To purchase her books on Amazon, please click here.