How to invest in DeFi projects? All you should know

Posted January 31, 2022 by atozcrypto

If you are planning to invest in a DeFi protocol, check its value (growth), community, and who its users are. It will give you a pretty accurate picture of the popular DeFi projects.
The UK, 31st January: If you read all the cryptocurrency latest news and blogs, you know that we are ardent proposers of cryptocurrencies and Blockchain.

And you would know that we discuss DeFi and NFTs a lot. Are you planning to invest in a DeFi project? It's a good thought, but you must consider some points before doing so.

The first thing to consider is the community of the DeFi project. If the community is vibrant and buzzing, you will know that people talk about it. And people usually don't talk that much about a failed project, do they? Especially when this market is a financial market consisting of cryptocurrencies, a very fickle system.

The community will also tell you how many users the system can support. If it can support many users, it's going to stay for a long time. It will also tell you about the upgrades and other activities developers are doing.

If the system becomes more stable and popular with each upgrade, it's a good sign. It must support analytics so that investors can check how many new users have joined on a particular day. It must also show the activities and transaction volumes on that network (weekly, monthly, or annually).

It can also tell if the market's behavior towards it is bearish or bullish, and you can decide accordingly.

The second thing to check is its growth. If its value has increased considerably within a short time, then it's a good sign. You can check data available on aggregator platforms to get a unified look at the data. Always choose the ones with higher values (TVL) because they will stay for a long time. They carry low risks and will have a thriving community.

The last thing to consider is the names of majority token holders. If the project offers multiple benefits to token holders, even the big names will be willing to take the risk.

And if they are staking it, then they have seen something. So, why can you not give it a try? But, of course, that is if it fits your budget and purpose.

All the popular DeFi platforms (for example, Uniswap) follow these rules. However, you must always exercise use caution before investing in these platforms.
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Last Updated January 31, 2022