Long-term diversified investment may be a better strategy in DeFi

Christel Deskins

Although DeFi has attracted countess attention and created a large fortune recently, people should not ignore the risks hidden behind it. As an emerging field, DeFi projects inevitably have risks in terms of business model, industry self-discipline, and technical strength, etc. Hackers, bugs, scam, all these are the challenges that […]

Although DeFi has attracted countess attention and created a large fortune recently, people should not ignore the risks hidden behind it. As an emerging field, DeFi projects inevitably have risks in terms of business model, industry self-discipline, and technical strength, etc.

Hackers, bugs, scam, all these are the challenges that DeFi projects cannot bypass. Even the star project that is audited has also been hacked, still less the well-known project that the price plummeted by more than 90% in one day.

When people are hovering between extremely high returns and the risk of losing all their principal instantly, a strategy of long-term diversified investment may be a better choice instead of focusing on short-term gains only.

Users can include both high-yield emerging projects and robust old-brand projects into their investment portfolios to achieve a balance between the two dimensions of asset returns and risks, which will allow traders neither to miss potential gold mines, but also to avoid excessive risks.

To solve this problem, there is platform in the market that offers one-click DeFi farming, integrating various well-known DeFi protocols in its platform, including Uniswap, YFI, YFII, Curve, Compound, etc. In addition to greatly simplifying the process for users to participate in DeFi, it can also save users from paying high gas fees. Besides, after the review of the professional team, it can effectively reduce the risk caused by the project quality or the project team.

Given that, investing part of the funds in a centralized exchange may not help you get crazy returns, but it can effectively reduce risks. At the same time, according to OKEx data, APY is expected to reach more than 40%, which is much higher than the current 10-year U.S. Treasury yield of 0.6% and the 12-month U.S. Treasury yield of 0.09%.

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