Basic Guide to DeFi Safety

Decentralized Finance, or DeFi, offers freedoms not found with traditional finance. However, these freedoms bring additional responsibility. DeFi may seem daunting at first, but we’ve created a basic guide for new users to keep their funds safe.

Trusted Websites and Apps

Most users will interact with DeFi through either smartphone applications or browser websites and extensions. Bad actors may try to exploit users by spoofing—pretending to be trusted actors—by promoting fake websites, applications, or extensions that mimic the real thing. This can lead to stolen passwords, funds, and even personal data and information.

When installing an app, check

• app source
• developer, license, and security information
• number of downloads (fakes will have few)
• review score and review count
• permissions (legitimate apps may request camera access for QR scans)

When visiting a website, check

• the url is accurate
• your connection is secure
• suspicious access requests

When installing an extension, check

• app source
• developer, license, and security information
• number of downloads (fakes will have few)
• review score and review count
• permissions (legitimate apps may request camera access for QR scans)

Wallet Creation

Create a wallet for use with DeFi carefully. Unlike a bank account, nobody can help you if you lose your login details. Copy down your seed and store it somewhere safe, preferably offline, and never share it with anyone! When choosing passcodes or passwords, use something complex you’re unlikely to forget, or otherwise have copied down safely.

We also recommend taking advantage of 2FA (2 Factor Authorization) whenever given the choice. 2FA greatly limits the ability for someone to access your accounts even if they get access to your passwords.

When Making Trades

Using smart contracts from a trusted site or application is generally safe and easy. Check your slippage allowance when making a trade. Not setting a slippage allowance may result in an unfavorable trade in rare circumstances.

Make a habit of manually checking an address before confirming a transfer. An incorrect address when transacting could result in lost funds. Bad actors sometimes alter receiving addresses with malicious smart contracts or malicious software installed on a device.

Other Good DeFi Practices

Here are a few things that will help protect your accounts and funds.

• Never share your wallet seed (words) with anyone.
• Keep your devices secured and safe.
• Always keep backups for seeds and 2FA.
• Consider bookmarking trusted websites.
• Use complex passcodes/passwords (avoid 1111, password, etc.).
• Make a habit of checking addresses.
• If you need help, seek out official sources.

As long as you follow the advice in this article you’ll have a safe and enjoyable DeFi experience.