Risks
How money can be lost in DeFi
Before you explore the world of DeFi and mistakenly think "it just works", we recommend checking out this link which shows the biggest hacks, exploits, and design failures of some the biggest protocols in DeFi. Many of them have built stronger, and grow resilient to these attacks, however the competition between hackers and developers is never ending, and while we trend towards a safer DeFi ecosystem, we are not there yet.
This may sound counter-intuitive, but using open source applications, where everyone can openly see the code tends to be much safer for the user. DeFi apps on Solana have a bad tendency to be closed source. Luckily this is changing, here is a list of smart contracts on Solana currently embracing open source.
Protocols can suffer from coordinated attacks by bad actors, trying to cause liquidations. Make sure that the protocols you use have safeguards in place to avoid these kinds of risks. To learn more about how Honey handles bad actors, check our whitepaper.
DeFi is a bustling land of opportunity for anybody to empower themselves financially. With novelty and excitement comes unforeseen risks we may not even know about. In that sense, this list is by no means exhaustive.
Last modified 1yr ago