Take money to farm Bullfarm and the end is stolen. This is a recent “case study” that alerted you to the dangers of DeFi.Friends keys, your coins, your wallet, why, after connecting to another platform, your money Get clean without knowing the reason? Let’s find out the reasons and safe farming methods when participating in DeFi.
DeFi – A double-edged sword
The decentralized financial market (DeFi) gives you many opportunities to make money from hunting hot coins with big X capabilities to Farming, Staking with high interest rates. But the game is only really easy when you understand it and understand the rules of the game.
However, when DeFi becomes a trend, you will see a lot of lending, borrowing, yield farming, … projects created without a long-term development orientation. Those who do not have enough knowledge and learn about the project easily become trapped delicious prey.
Always be alert and DYOR before any farming or transaction decisions because there is no “undo” button for you to undo the transaction.
Read more about DeFi’s structure with the article: Unlock the DeFi Pandora box – The secret of x100 projects
Cause of losing money when farming
Due to Smart Contract errors, the intervention of changing data input from Oracle causes farming protocols to be hacked, causing damage to the platform. Some recent “explosions” such as Harvest Finance, Origin Protocol, … are certainly no longer strangers to brothers, causing indirect damage to assets on farming platforms. If the platform is reputable, the user will be compensated, otherwise the brothers will likely lose crypto assets.
Of course, this incident was completely force majeure and no one expected this situation to happen.
Below are some projects that yield farming, lending, and staking projects that have had hacking problems recently with Harvest Finance, which have suffered the heaviest losses with 33.8 million USD.
First of all, you should understand the generalization of farming, this is the activity of providing liquidity to the pool of a protocol or platform to try to make profits from crypto assets.
In order for farming activities to take place, you need to connect your personal wallet with the farming platform. Approve operation is the step you must go through if you want to swap or farming.
Approve is an approval for owners of Smart Contract / farming platform to have the right to connect, access and have full control over your funds to swap or provide liquidity to the pool.
Suppose, you want to farm 1000 ABC Token into pool X of platform Z, to provide liquidity to pool X, you need to connect your personal wallet containing 1000 ABC Token and click. Approve so that the platform’s smart contract connects to the wallet.
After clicking Approve, the Z platform has full right to use the approved sibling quota of 1000 ABC Token.
- Case 1: Good, reliable project → Project to bring your money and provide it to the pool for farming.
- Case 2: Project scam, scam → Taking advantage of the Approve operation to swap your coin to another coin → Withdraw the pool’s liquidity and disappear → You lose money but don’t know the reason .
Approve actions also include the Unlimited Approve feature. Unlimited Approve is a feature that allows the platform, smart contract to fully process the amount of money stored in your wallet with a maximum limit.
- Benefit: Save fees for transactions, fast manipulation, no need to click approve for the next transaction and farming time. Approve has no time limit.
- Disadvantage: Risks directly affect the assets, giving 100% rights to contract owners.
How safe farming and limit the risk of wallet hack?
Store assets in many different wallets
You should store assets in many different wallets and especially dedicate one wallet just to store the property and not interact with any other smart contract or platform.
Need a wallet specializing in farming, if you want to farm any coin, just transfer money from the exchange or another wallet into a farming wallet. This helps you to limit the risk of losing assets when farming. In the case of the farm brothers having to cheat the project, they only lose the money in the wallet, not any other money.
Read more: Instructions for creating wallets on different blockchains
It is not recommended to choose the Unlimited Approve feature
You are careful not to choose the Unlimited Approve feature, although it is quite laborious and costly when each farm is a different approval, but it will ensure the safety of your property.
If you want to farm how much, just approve the correct coin you want to farm.
Don’t farm around
You see many organizations introducing farming platforms with high annual interest rates (APY) without any unconfirmed proof of pouring money into the farm, it is very likely that your money will not fly. .
Please consider, carefully consider the project on reliability (audited or not, of course, audited projects are still at risk of hacking, but when there is confirmation, you also have more confidence), Look at the project team, technologies, roadmap and development ways to evaluate the project before putting money into farming.
Approve after farming times
After each farming review, immediately visit unrekt.net to cancel the approval rights for platforms to avoid checking your wallet and realizing your money was lost on a fine day.
Instructions on how to farm conveniently and save costs
You can staking and farming on many different blockchains such as Ethereum, Binance Smart Chain, Huobi Eco Chain, … on Coin98 Wallet through Dapp Browser with just a few simple and extremely convenient operations.
Just click on the item Browser In the main interface, then select the farming platform you want to farm → Select the wallet containing the coin you want to farm → Perform normal farming operations.
Read more: Farming, Staking, Trading – All available on Coin98 Wallet Web3 DApps Browser
In addition, Coin98 Wallet also features a gas bar to help you optimize farming costs with the fastest processing speed and the most reasonable cost.
At the same time, when verifying the information, farm as soon as possible, because at that time your token farm price will be at the best price to avoid the situation of deep fall being liquidated and receive “Impermanent Loss”.
Touching money, you cannot joke, be responsible for your own property. Do not see the message connecting the wallet to the DeFi platforms, but click approve repeatedly while not knowing what it is warning about and then receive a bitter end. Do not assist fraudsters to steal your money easily because of your carelessness.
Lots of brothers lose money because of these nonsense mistakes and I don’t expect you to be the next victim!
Please learn the rules of the game carefully, know the game version before going to battle. See you in the next posts!
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#farming #play #DeFi #safely