**Always take in consideration non of this information is financial advice or official announcement from any specific project, I’m no expert and this is just my personal opinion on certain project mention on this article, cryptocurrencies are extreme high risk assets and you must do you own research**
Why I don’t DeFi – Protocol Pickle exploit for $20 Million
Google: Defi Protocol Hack
– Akropolis $2 Million DAI
– Havest Finance $24 Million
– Value $6 Million
– Pickle $20 Million
Here an excellent explanation of what happen with Pickle
I might get some heat because of this post but this are indicators for anyone new to the space to avoid when going into a DeFi project.
I have been involve in a very small amount of DeFi protocols but most CeFi at the moment with Celsius Network and the main reason for this is because of all the hacks I have seen every single month of 2020 there is a hack or exploit and the end is money stolen either by developers or attackers.
The Decentralize Finance concept is very innovative, manage properly results are very promising but at this point to be honest I don’t blame developers or attackers, its the lack of responsibility of users who deposit their funds on projects that have the following characteristics:
– Anonymous Team: Its fine to control your privacy and I know the main reasons for this is to “avoid” social engineering or attacks but the same could happen to many other real companies, they stay public when it comes to their staff so grow up and take responsibility that’s not an excuse, you are receiving others people hard earn money to make more out of it on the long run.
– Financial Experiment: Whenever I see this is the FIRST RED FLAG no matter what I just close the page and move on, if you deposit funds into a site that calls them self an experiment its your fault if its gets hack or exploit
– Food, Animals Names or Meme: if what they trying to do is create some sort of Decentralize Financial Institution and they are using this type of marketing strategy like THIS IS A MEME DONT BUY IT, just stay away
– Childish Website: a website is a very important part of a project, its the public face on the internet, design, colors, logo, and you invest on a “”Financial Project”” where the logo is a Pickle?
– Extreme High Yields: making a passive income is great, that has been my main strategy since 2017, first I started with staking, masternodes and most recently with crypto social media platforms like Hive, 3Speak, Odessy but the return on this projects if you make good content is about 4% to 7% a month but you have to work hard and that’s already more than you will get from any bank, anything above 10% even on crypto is already more than ok, when you see project promoting this hundreds of percent right out of the gait for me that’s a red flag, there is no need for this, Celsius Network highest interest if Im not mistaken is about 13% on stable coins.
This are basically the main reasons I have stay away from DeFi projects and my most successful trades have been SHORTING this coins, SUSHI, CRV, FLM, BAND, SOL and most DeFi projects listed on Binance Futures, the amount of hype behind DeFi this year was insane, whales or anyone who got in first with the multiple hundreds of percentage as yield make thousands of tokens so once listed on futures markets they get murder by traders wile whales dump their tokens bears jump in and they drop for days
CRV Daily Chart
Sushi Daily Chart
FLM Daily Chart
Band Daily Chart
This are just examples and almost all this projects have been involve in some sort of drama, some of this tokens have recover recently with the current bull rally but are you buying into a project to see it tank and wait weeks or months for it to recover or would you prefer a much more some what stable project in regards of price, adoption and most important security?
Even after all this reasons and events I still believe DeFi is a great concept that can be accomplish but all us as customer, clients, investors must take responsibility and put funds on projects that are taking things as a serious matter as a true financial institution in this case decentralize, there are other good DeFi projects that don’t offer crazy amount of interest but so far with very little incidents.
Just to mention a few and even other projects who suffer a similar incident and have manage to survive and keep moving forward, this are the projects I would look for, this really gets to a point where its annoying seen people complaining about loosing their money on DeFi projects but at the same time annoying seen how not fair is this for those who believe in the project, that’s not the purpose of crypto and this kind of incidents is why I never recommend anyone I know to buy anything else than Bitcoin and not because I’m a BTC MAXI, its because crypto is still the wild wild west and that wont change in probably the next five years, Im not asking for regulations but one of the following will happen first:
1- Extreme Crypto Regulation by countries
2- Developers take responsibility
3- Users learn not to trust shady projects
To be honest I think the one with the most chances to happen first in the next five years is number one and I feel many of us in the space don’t want this to happen because crypto was suppose to be in control of the users and no middle man.
This is a little bit different from what I usually publish but with the amount of new users crypto is going to get next year with current bull market I feel I needed an article for when people ask me in a few months “What do you think about this DeFi project?”
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