🧠 7 mistakes people do getting into DeFi

DEFI can make people alot or take alot, depending on the rules you set to play with

October 07, 2022

Seedphrase Daily 👋 If crypto was an acid trip, we'd be your trip sitter.

Today's Agenda 📓:

  • 🧠 7 mistakes people do getting into DeFi

  • ⏮ Weekly Wrap

  • 🌱 NewSeeds

  • 😳 Meme of the day

🧠 7 mistakes people do getting into DeFi

Learning from others is just as crucial as learning from yourself. And mistakes are the best way to go about it. We asked some of the smartest crypto investors we know and here's the summary.

7 common mistakes people make when getting into DeFi.

  1. The food chain: You most likely found a play from a Youtube influencer, then, to your surprise, that project crashes a few hours later. Sorry sir, but you're on the bottom of the food chain. This is how it goes: Builders->VCs/insiders->Whales->Influencers->You. Assess your risks.

  2. High APY/APR tokens: Let's be honest. 100%-1000% looks great but will the project even last that long for you to get your annual returns? Probably not. Most projects that promise this use it as a marketing scheme to lure people in.

  3. Ponzinomics: Ponzis are something to avoid, especially if you're going in last. Some examples of this are the infamous OneCoin which defrauded almost $5B from investors.

  4. Greed: When you start to think you're a genius because a shitcoin you bought went 2x, and you start telling your friends. That's when you should take profits! Using systems and formulas to keep emotions neutral is a net positive for every trader.

  5. Stuck in old ways: Web3 is new and constantly changing. There's a hot new coin, or NFT people are bullish on every day. Like when mobile apps became popular, there were subway surfers, temple run, doodle jump, vine etc. There was always something new going on. Not every new shiny object will live up to people's expectations, but it's important to understand that the market will remain dynamic and not static for a while.

  6. Not calculating loss. When you trade, be comfortable with losing all the money you put in because 99% of projects we see now will go to poo at the end of the day. If you put $10000 in a coin and it goes down 80% with no signs of recovery, your best option is to leave with your $2k… Or better yet, set a stop loss (SL) you're comfortable with to reduce your losses.

  7. Choice paralysis: Having 25 coins, in theory, is good because it is 25x the profits, right? Wrong. It's almost impossible to keep up with that many projects, and it will take away from other coins that should be your primary focus. 7-12 is a good range, but starting with less is better if you're beginning.

Trading is like a sport. You need rules to be able to play correctly. And having a structure to your decision-making will only help you in the long run.

Imagine playing basketball with NO rules. People would punch each other in the balls to take the ball and use chairs to dunk. It's madness, and the same goes for trading.

⏮ Weekly Wrap

Just in case you missed it, here are other topics we discussed during the week.

🌱 NewSeeds

Celsius rebranding to Kelvin. STAY AWAY FROM THIS, BRUH. 🙅‍♂️

Binance Smart chain halted after the hack. More details in the article. 😅

😳 Meme of the Day

Must be nice.

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research

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