How do you avoid failing a victim of fraudulent projects & scammers? This article mentions five platforms that can help you avoid DeFi scam.
October 12, 2020 | AtoZ Markets – The DeFi space has exploded since the beginning of the year due to growing acceptance among the masses. Decentralized finance platforms help the average person access financial services that otherwise would be out of their reach. From loans to the ability to trade complex financial instruments, the use cases for DeFi keeps growing by the day.
DeFi Market’s Growth
Today, around 1086 DeFi tokens are available in the market covering different markets, including alternative savings, analytics, asset management tools, decentralized exchanges, derivatives, prediction markets, tokenization of assets, and so on.
Another factor that has fueled the DeFi market’s growth is the lure of potential returns through yield farming. The activity allows one to stake tokens on a protocol to provide liquidity, and in return, they are rewarded with more tokens after the program period expires. It’s proving quite lucrative and has seen masses jump on various protocols like Compound, Uniswap, Maker, Aave, and many more to stake tokens, thereby receiving rewards. Due to this, the total value locked (TVL) has grown to over $10 billion.
To put this into perspective, it took around 28 months for the TVL to cross the 1 billion mark earlier this year in February. But, since then, the value has grown ten times over. The total market capitalization of the top 100 DeFi tokens has also grown to over $15 billion within the period.
5 Platforms That Will Protect You From DeFi Scams
Today DeFi is the hottest topic within the cryptocurrency market, and more people are looking to get into it either through launching unique projects or investing in tokens. But, where there is money, the bad actors are never far away. And the plot thickens considering how scantly regulated the crypto space is. It’s easy to get conned, and it has happened numerous times already through ICOs and other well-orchestrated schemes.
So, the question is, how do you avoid failing a victim of fraudulent projects and scammers? Below we will go over five platforms that can help you escape traps within DeFi.
1# LIFTOFF By LID Protocol
LIFTOFF is a new platform based on the LID Protocol that has been at the forefront of safeguarding both investors and projects within the DeFi space through its highly successful LID Certified Presales platform. The LID Presales service helps projects raise funds, and once they hit their targets, the tokens meant for liquidity are deposited on Uniswap and other lending protocols. They are burnt, thereby locking them and avoiding a chance of rug-pull scams occurring. This helps protect investor funds from potential scam projects.
The role of LIFTOFF is to combat rug-pull scams that are growing within the DeFi sector. The platform is fully automated tailored to serve the needs of small startup projects. It helps these projects automatically lock liquidity through a potent mix of time locks that can be temporary or permanent using smart contracts.
SlowMist is a Chinese based blockchain security company that has been in operation for over two years now. The company was founded by experts with more than a decade of experience in network security attack defense. The company has already served over 70 crypto exchanges, 110 wallet providers, 40 blockchain firms, and over 800 tokens/ applications, helping audit their security systems and smart contracts. SlowMist recently warned investors of an impending $2.5 million DeFi exit scam by Emerald Mine (EMD) after the platform moved a huge chunk of tokens staked by users to a private account.
This is another Chinese-based blockchain security company that aims to elevate the entire blockchain ecosystem’s security and usability through top-notch products. The company exists to improve the security of large-scale systems. Therefore, it publishes reports of hidden vulnerabilities within networks and offers products and services to resolve them. PeckShield is the other company that recently flagged Emerald Mine, a liquidity mining project based on EOS, after it moved users’ locked up assets worth around $2.5 million to a private account.
4# Bloqchain Audit
Based in New York, Bloqchain Audit is a blockchain company that builds secure decentralized systems on different protocols. Among its services is conducting blockchain audits and providing reports on the state of security for various projects. It also acts as a great source of information on upcoming projects and how secure they are.
Finally, on our list of top projects that will help you identify scam projects is KryptoGO. The company offers advanced blockchain solutions and consulting services by linking projects with experts that help with various issues. The platform also does audits and produces reports on different projects. Thus, it’s a good source for anyone looking for information on a given project they may be interested in before investing.
Additionally, you can always Google about a project before getting involved with it and see what comes up. Visit the website, read the whitepaper and other materials, and see what people have to say about the platform. Even though some of these projects will spend money to market themselves on media and through influencers, visiting communities on Reddit, Twitter, and even Telegram can offer you a better idea of what the project is all about and help you avoid potential scams.