I would add
6) Meaningless copycat project created with the only idea of pump and dump.
I'm following the whole Announcements section and rarely I can see something worthy for my time or coins.
Topic: The DeFi Red Flags (Read 400 times)
My problem with this DeFi's remains the copy and paste of idea, new DeFi that are coming into the market are almost with the same idea, you wonder what's unique they bring to table for investors.
The part I dislike about DeFi is when team go anonymous, why hide if you're sure about your idea, come to front and raise proper funds, if you are once an influencial, either ICO, presale or IEO way, funds will be raise in short period of time or within minutes by whales if your idea is top demanding.
Please watch out for project with anonymous team, they are highly risky as anything can happen especially when they aren't properly audited.
The part I dislike about DeFi is when team go anonymous, why hide if you're sure about your idea, come to front and raise proper funds, if you are once an influencial, either ICO, presale or IEO way, funds will be raise in short period of time or within minutes by whales if your idea is top demanding.
Please watch out for project with anonymous team, they are highly risky as anything can happen especially when they aren't properly audited.
True. If you have joined one, its like you have seen it all. Although there are different kinds of defi like lending, swapping and synthetic assets, they are all connected when they all meet on each roadmap they have. But what is alarming though is the defi scam projects because they are swarming the space.
We can see their websites are just too simple that it doesn't have anything in there. No github nor documentation and if this is how they make it transparent, I don't think it will really be legit. Some of them will just stay for awhile before running with the funds.
My problem with this DeFi's remains the copy and paste of idea, new DeFi that are coming into the market are almost with the same idea, you wonder what's unique they bring to table for investors.
The part I dislike about DeFi is when team go anonymous, why hide if you're sure about your idea, come to front and raise proper funds, if you are once an influencial, either ICO, presale or IEO way, funds will be raise in short period of time or within minutes by whales if your idea is top demanding.
Please watch out for project with anonymous team, they are highly risky as anything can happen especially when they aren't properly audited.
The part I dislike about DeFi is when team go anonymous, why hide if you're sure about your idea, come to front and raise proper funds, if you are once an influencial, either ICO, presale or IEO way, funds will be raise in short period of time or within minutes by whales if your idea is top demanding.
Please watch out for project with anonymous team, they are highly risky as anything can happen especially when they aren't properly audited.
^ I think projects related to decentralized finance are mostly scams and just want to take investors' money. Most of these (DeFi) projects have the same features and products as each other. So I think these projects will sooner or later die like ICOs.
https://coinmarketcap.com/defi/Which top 30 projects will die soon. They have been working for several years or more and are successfully developing, as well as attracting investments from well-known cryptocurrency funds.
Messari analyst Mason Nystrom tweeted:
https://twitter.com/masonnystrom/status/1320751165244669953
"Last week Polychain bought 329 $YFI which equates to 1.1% of the total supply.
Yesterday, Three Arrows Capital purchased 133 $YFI (.45% of total supply).
Investing like your favorite investment fund has never been easier. View both of these fund's liquid portfolios below!"
Either you are looking at the wrong projects, or you are somehow disappointed in Defi that every message is written like a carbon copy.
^ I think projects related to decentralized finance are mostly scams and just want to take investors' money. Most of these (DeFi) projects have the same features and products as each other. So I think these projects will sooner or later die like ICOs.
Usually the biggest red flag is when the defi project is a giant mess of an existing defi clone. Its basically added with some unecessary gimmicks and call it feature.
There are too many such defi projects that just seems very obvious but people still falling into the same trap. Moreover, if the dev themselves is anonymous why bother putting a money into the project isn't that the most obvious red flag as of now? kinda baffles me when people investing to a project who don't even reveal who's behind it and complaint when they lose the money.
There are too many such defi projects that just seems very obvious but people still falling into the same trap. Moreover, if the dev themselves is anonymous why bother putting a money into the project isn't that the most obvious red flag as of now? kinda baffles me when people investing to a project who don't even reveal who's behind it and complaint when they lose the money.
Everyone who uses Uniswap should remember that any tokens, including scams, can be placed on a decentralized exchange. Therefore, anyone who decides to buy tokens should conduct their own research before buying. Be sure to check the smart contract to avoid buying a fake token.
yes sometimes that's the cleverness of the scammers, they can place tokens in the best position and can get profit from traders or investors. so I think don't be fascinated by the word deFI because not all definitions are healthy
Ninety percent of new DeFi projects are complete scam, if you are in for one just know that you are on your own, even few new DeFi projects intentionally hacked themselves and lied to the world that they are been compromised, it's time to be smarter, DeFi is giving scammers the freedom to do as they want
Everyone who uses Uniswap should remember that any tokens, including scams, can be placed on a decentralized exchange. Therefore, anyone who decides to buy tokens should conduct their own research before buying. Be sure to check the smart contract to avoid buying a fake token.
yes sometimes that's the cleverness of the scammers, they can place tokens in the best position and can get profit from traders or investors. so I think don't be fascinated by the word deFI because not all definitions are healthy 
Defi was good 6 months ago, but now so many scam projects using defi names and scamming people. I myself got scam about $1500 on XFI project, it was going so good but the owner did a rug pull at the last moment, and took all ETH, and vanished. I learned my lesson, now I don't invest in any defi project, I hear lots of ppl got scammed. so be careful if you invest any money on defi project.
Nah,,, it was okay a year ago and also okay 6 months ago, but the scams were just as bad in those early times as it is now,,, maybe even worse in those times because a lot of early investors also lost money in March through makerdao crash remember? Now this is just ICO time again like before. Same scammers running and rinsing, and same greed making people lose money.
5. Audits
I have made it a point of duty to always check if any DeFi project I associate with has an audit with a reputable and well-known firm. Audits simply mean if there actually is a real project and whether such tokens exist.
Final Thoughts
Never take my word as gospel. Some DeFi can still exit scam or rug pull even after fulfilling these conditions. Remember: ALWAYS DYOR
Number 4 and number 5 is very important I have seen a lot of DeFi projects reported because of these two things Poor and/or plagiarised whitepaper and Audits, getting audited is very important because this is a smart contract-based project, it should be checked if there are loopholes on the project and the smart contract will be used as intended to be.
Lots of defi tokens are listed on uniswap, when the list price immediately went up drastically but after a day after a few hours it started to drop dramatically, and lots of new Defi projects that copied other projects, I think sooner or later defi will be like an ICO
I think uniswap is the best platform for scammer.It is very simple to list a token on uniswap. Just create a liquidity pool and contract. And it is listed.
First time scammer pump the price, when investor come and invest then they dump tbe price continiously.
Absolutely! exchanges like uniswap are notorious for scamming and tricking. Since most of the projects are open-source, many build their own skin on top of a successful project. This caused the death of ICO and made the investors flee.
We as a trader, investor, or people we should learn to research everything first before concluding that you will invest in that certain project. Like we don't need to blame others or a certain project, if their aim is to scam since the beginning we need to be aware to that, don't invest to those project whether it is defi, Ico or ieo that is offering staking or farming with high APY, there's no such thing like that and that is why many people becomes a victim they fall into this fast roi.
https://coinmarketcap.com/defi/It is very difficult now to find well-known projects for which staking is still working.
Staking was invented as an alternative to the distribution of project tokens, which was not regulated by the Security and Exchange Commission.
But scammers started using this method to get rich quick.
Therefore, you need to learn to understand the reasons for which the project uses staking.
The team as well as the audit are the 2 factors that most determine whether a defi project is truly legit or not. Most defi projects are now smart enough to just create a github account, but only as a display. no repositories or projects are created on this github account, so be careful. and the team is the most decisive, lest a team whose origins are unknown promises strange or unrealistic technology
DeFi here DeFi there, it's definitely ICO round two this time around and by now I expected many investors to have understand that majority of these DeFi projects are just here to create unrealistic hypes to attract investors and end up stealing from them, the only decentralized Finance project I trust is ChainLink and few others
we need to start avoiding projects that gives people huge percentage on ROI and this is very common in DeFi projects nowadays, I'm surprised people are still investing money on such projects, it's so clear that such projects are running Ponzi schemes
Anonymous team members on DeFi projects can't be trusted, I'm sure they have a bad intent and once their target is met they will pull the rug, even projects with team members that came public still exit scam on investors money, if teams have something real to offer there is no need to hide behind the cotton
So much is happening in the world of Defi right now, so many rug pull on daily basis. Just like you rightly mentioned, fulfilling those conditions does not guarantee anything, I have seen project that had audit with reputable firm and still got attacked and price went to zero because of some lose end in the code, Defi is very risky generally and it is bound to get worse. Always DYOR.
There are red flags in all other investment trend, ico, ieo sto and now defi, but i have seen some defi that have give good returns to the investors, the defi project that should be avoided or watch very closely are those ones without any team or have anonymous team, i don't understand the reason why they like to stay anonymous to begin with, probably they have something to hide.
Then you ain't see nothing yet, DeTrade fund exit scam and if you check their twitter account you will see video of the CEO talking about the project, many believe that the video is some kind of Artificial intelligence work, scammers are now using A.I to make unreal video appearance that looks real, this project raised 1450ETH and exit scam. And another one "Meme Token"
There a lot Meme Token DeFi offering a thousand APY to all user, and you want know the weird things? everyone trade that token without fear the token going to be zero on the market.
This meme token made it to coinmarketcap week ago and after checking the project out it looks like a pyramid scheme to me, just my own judgment though, giving out too high reward is always a bad news in any project, only greedy and inexperience investors will fall for such project There a lot Meme Token DeFi offering a thousand APY to all user, and you want know the weird things? everyone trade that token without fear the token going to be zero on the market.
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