7 Top Tips – Getting Started with Decentralized Finance.

Navigate the world of DeFi with expert insights! Learn about leverage, risk management. Stay informed with 7 top tips from a seasoned user.

For the last few years, I have been using DeFi projects and over these years, the pace of development has been tremendous. I would consider myself an advanced DeFi user and I am sure that the skills I have learned, the mistakes I have made and the information I have gathered on different protocols is going to help many of you that read my blog!

As I held during the bear market, fresh capital is tight heading into the future bull run. We have discussed this at meetups and from the emails I get from you, so I know many of you are in the same position.

What is Leverage?

My plan is to use my holding as collateral for loans, releasing some capital which I can then use to buy other tokens or use other DeFi products. This is known as leveraging.

Yep, that’s right, leveraging is not just a type of high-risk trading. It’s using existing capital to borrow against. Some people trade with leverage, some people use leverage to increase returns from an investment project. Companies use leverage to invest in their future. And that’s not all, there is more to learn about leverage. Hopefully we will have a Crypto Bite on this in the next few weeks.

One of my takeaways from last week’s meetups was around risk tolerance and age. Obviously Crypto and DeFi are high risk investments. High risk investments are generally more suited to younger people, like people in their 20’s. So, if you are like me and are a little older that that, it is super important that you do your own research and never invest what you can’t afford to lose.

But if you do want to take the risk, here are my top tips to getting started.

7 Top Tips – Getting Started with Decentralized Finance.

Educate yourself on Basic Finance. Understand the basics concepts of finance such as Interest, Compounding and Leverage.
Learn about the risk involved. What are impermanent losses and gains, how could this effect your investment. Have you looked at smart contract risks?
Read the protocol documentation. Make sure you understand how the protocol charges users, and how they calculate rewards, how often they compound and so forth.
Start small: DeFi can be complex and overwhelming, especially for beginners. Start small by experimenting with small amounts of cryptocurrency and gradually work your way up as you become more comfortable with the technology.
Use reputable platforms: When using DeFi platforms, it’s important to use reputable platforms that have been thoroughly vetted and audited for security and reliability.
Monitor your investments: The crypto market can be very volatile. DeFi investments are not a set and forget. Traditional Funds have fund managers, keep that in mind.
Stay informed: DeFi is a rapidly evolving space with new projects and protocols emerging all the time. It’s important to stay informed and up-to-date with the latest developments in the space.

Obviously, I am not a financial advisor, and nothing I say here is financial advice. I am just sharing my experiences and hoping you can learn from mistakes I have made in the past. If you want help and to hear more about mistakes you can avoid when using DeFi or any Blockchain or Web3 products then, join one of our meetups and you can learn from the community.

I would also suggest you sign up to our newsletter below. Between our meetups, our blog posts, our free crypto bites and our courses, there is losts more we are going to share. Some of which is time sensitive :-)