Security is of paramount importance in the world of decentralized finance. Learn about the main risks and best practices for protecting your digital assets when interacting with DeFi protocols.
Main risks in DeFi
The DeFi space, despite its innovation, carries certain risks. The risk of smart contract vulnerabilities is one of the most significant — bugs in the code can lead to loss of funds. Market risk is also a factor, as cryptocurrency values can fluctuate significantly. Liquidity risk means that under certain market conditions, it may be difficult to withdraw your funds immediately.
How Defied protects your funds
Defied applies a strict protocol selection process. We only work with proven protocols like Aave and Compound, which have a long track record and multiple security audits. Our smart contracts are non-custodial, meaning only you have access to your funds. Your private key is stored locally on your device.
Best practices for users
Never share your private key or seed phrase with anyone. Use strong passwords and two-factor authentication. Verify the platform URL before interacting with it. Start with small amounts to familiarize yourself with the process. And always remember — if something sounds too good to be true, it probably is.