What exactly is supporting the high returns of DeFi? It is important to know that ordinary people deposit only 3% of their funds in the bank for a year. As a DeFi farmer, not to mention 3% a day, 3% a month is basically there. , so what underpins all this? ? ?

If someone outside the market sees such a high return, they will definitely give [this TMD must be a fund or a fraud].

It is not difficult to distinguish that every industry or as long as you are not in this industry, you will naturally have a certain value discrimination, because you do not understand what is inside, you judge this thing from a sentence or a few words from others Is it worth it. So you can only discover the value if you participate in it.

The usual operation of "mining" is "increasing liquidity", only a small part of the operation is "single currency pledge", and even "single currency pledge" is risky, which is another lesson for everyone, we DeFi's ultra-high returns come from "ultra-high risks".

"Liquidity Risk".

Friends who have added "liquidity" should know that this risk is closely related to the currency price of A/B. If both sides are falling, the overall value of A/B's LPs will actually decline, and if A/B Both sides of B are rising, and the overall value is rising. If it does not rise or fall, the overall value will remain unchanged, but it will always change.

Therefore, the variety selected as the "liquid LP certificate" determines the size of your risk coefficient here. Many people see APY100000%, so they must know that they may start to lose money the second they buy it. Exchanging time for space is completely gambling, but gambling can also win. When you make money, it means that you have won the bet. When you lose money, it is naturally a bet that you have lost.

And because "adding liquidity" is done on the chain, there will be no data dumping similar to exchanges, and all data can be found on the chain, so it can only be said that it is profit-making trading, and It is basically a "running fast" game, unless you are targeted by big funds, otherwise "the person who is trapped will always be trapped".

This is the reason why so many "soil mines" were finally "disappeared" in the mining stage when DeFi first started last year, and Sushi and other mines that had invested in capital survived. Some people took a fancy to it. So if you are digging for a long time, you must make sure that this mine is "qualified" to be targeted by "big funds".

This is also the reason for the Bags and other mining fires on Heco. The reason is that there are really many people CX in it, and the effect of making money is really exaggerated. After all, it is the only one of all algorithmic stablecoins except Bdo that exceeds 1 It's a month, and the Bdo on the BSC has survived for 3 months, and most of the time is "on the water".

So here we know that the risk of "adding liquidity certificate LP" is huge, and it is precisely because of this huge risk that the income is very considerable, so this is the same as investment in our real society, the greater the risk, the greater the return, there is no contradictory relationship.

"The Risks of Single Currency Staking".

Don't think that "single currency pledge" has no risk. The risk of "single currency pledge" is greater than that of "liquidity pledge LP". Mainstream currency” or “stable currency”.

A 50% drop in single-currency pledges means a real 50% drop in overall value, while a 50% drop in LP is only a 25-30% drop in overall value.

Therefore, "single-currency pledge" is divided into "free whoring" and "non-white whoring". Mining coins dig themselves;

"White prostitutes may also fall." After all, mainstream currencies such as eth and btc are not static, so there are risks.

contract risk.

This risk is also huge. The most interesting thing about playing BSC recently is the audit of the contract. The audit giant CTK does not know how many "running BSC dogs" have been audited. It is absolutely amazing.

It's like, I'm playing a bomb explosion countdown game, and it's a 10-second countdown. You put a few bags of gold next to the explosives. Now I run to pick them up and run to a safe range for about 9 seconds. What am I going to do? To pick up money, or to pick up money. (dynamite may explode prematurely)

So you can say that the risk is not big. Those who are audited will run away, let alone not audited, so it is an unsafe thing from the beginning.

In summary.

In summary.

DeFi's ultra-high returns come from the ultra-high risks of DeFi. People may lose money in business for a few months before losing money, while DeFi may lose money in a second. After the money is spent, the other party is gone, and then Game Over.

Professor Suo WeChat: txshitbusiness