In this article, we will cover Defi services, DYOR, staking, token swapping and farming. Learn how to protect your assets using risk management.
Decentralized finance (DeFi) is revolutionizing the way people invest and manage their finances, and it’s no surprise that DeFi services such as;
- Token swapping
- Providing liquidity
- Farming
- Staking
- Lending
- Borrowing
- And much much more
All DeFi services are becoming increasingly popular. However, with the growth of DeFi comes the need for users to be vigilant and responsible when it comes to researching and investing across each of these DeFi services.
Why is doing your own research so important in DeFi?
The decentralized nature of DeFi means that users are in control of their own assets and decisions, and there is no central authority to oversee or regulate the market. This makes it essential for users to be proactive in researching and evaluating DeFi services and protocols before investing their money.
DeFi counterparty risk
Another significant consideration is counterparty risk. Counterparty risk occurs when an exchange or DeFi platform gets hacked, loses users’ assets, or is presented with other situations that might force the exchange or DeFi platform to default on its commitment to hand over its customers’ assets on demand. Although blockchain technology is robust and immutable, the apps built on it are vulnerable to hackers, and counterparty risk persists in many sectors of the cryptocurrency industry. Furthermore, the industry is still highly immature, giving a lot of room for fraud or inefficiencies.
Infrastructure and applications based on blockchain technology are growing at breakneck speed. On hundreds of platforms, users can trade, store, lend and borrow assets, farm, and stake their funds. However, the architecture of those platforms might differ, such as centralized, decentralized, or hybrid structures, and they can all be compromised owing to a lack of cybersecurity best practices.
Smart contracts’ automated nature can eliminate some of the transaction risk points where counterparty risk still exists. Blockchain technology enables smart contracts to function without the need to trust anyone other than the smart contract itself. As a result, when it comes to counterparty risk in DEFI, the security of a smart contract is critical.
By doing your own research, you can take steps to minimize these risks and make informed decisions about your investments. This includes researching the reputation of the platform, evaluating the security measures in place, and considering the long-term potential of the investment.
WingRiders DEX: A platform for token swapping, staking, and farming
Regarding security, one of the standout features of WingRiders is its use of smart contracts. These self-executing contracts automatically enforce the rules of a trade, eliminating the need for intermediaries and reducing the risk of fraud. This allows for faster and more efficient trading and investing, as well as a more secure environment.
From a security standpoint, the use of smart contracts creates a trustless environment where trust is only necessary for checking the integrity and security of the script. Also, interactions with the smart contract, which may be a liquidity pool, is all through the crypto wallet, which is not in the custody of the DEX. That said it is important to note that the responsibility for security is on the wallet owner. Any flaw in security leading to the loss of control of the wallet and its private keys will lead to the loss of funds.
Finally, WingRiders was audited by CertiK, who are leading. web3, blockchain and smart contract security firm providing a Security Leaderboard, a tool that ranks WEB3 projects on security risk, based on a range of on-chain security primitives.
In addition to its security features, WingRiders continue to implement interface improvements for trading and investing in DeFi services to accommodate beginner and advanced levels. This makes it an attractive option for both experienced traders and those new to the world of DeFi.
For the user interface (UI) and design, the platform offers a portfolio management farming dashboard to monitor your gains from the liquidity provision, you can participate in governance and shaping of the platform in its future upgrades and direction through voting mechanics on the WingRiders DAO.
Finally, the WingRiders community is dedicated to providing other “Riders” with help for questions or concerns they may have using the platform. This means that Riders have the help needed easily accessible, before making any DEX actions.
Taking responsibility for your own actions
It’s important to remember that you are ultimately responsible for your own funds and the way you use them. This means that you need to take care across all DEXes, wallets and available services, understanding what each potential risk is and how best to mitigate potential loss, human error, or being a victim of fraud.
It is best to always DYOR and consider as much information as possible.