• HyperDex makes it easy for beginners and users to make investments in DeFi.
• HyperDex utilizes a Cube system for grouping its investors.
• The passive cube system can help you make a profit without having to lift a finger.

Although Decentralized Finance (DeFi) is a newer industry, it has experienced incredible growth over a short time. A sector that had a value of $700 million as of December 2019, was now worth $13 Billion a year later. With statistics like those, it’s fair to assume that DeFi isn’t going anywhere anytime soon.

However, stories after stories about people making big from DeFi investments continue to surface in the media. So what is DeFi and how can people get involved?

Within this article, we’ll be taking a look behind the curtain, explaining exactly what DeFi is, how to invest, common problems investors come across, and how the industry is turning to new tech startups to remediate its problems.

Let’s get right into it.

DeFi: What is it?

The emerging technology of DeFi utilizes the same blockchain ledgers that are used by Blockchain. Due to these, financial services don’t have to have a middle man, eliminating banks and giving power back to its users. Your money won’t be held in any bank. It will instead reside in your DeFi wallet.

Anybody with an internet connection can sign up on the DeFi platform quickly. This is the decentralization of finance. DeFi technology allows trading to take place instantly and transfers can be made in seconds, minutes, or hours instead of waiting at banks.

DeFi, in short, is all about making it possible for everyone to have access to finance, regardless of their background. The DeFi platform is accessible to all and eliminates any middlemen.

DeFi investing: How does it work?

DeFi investing, although it is based on a new system of financing, shares many similarities to traditional finance. DeFi is often associated with a variety of forms of investment.

There are two types of primary form:

● Cryptocurrencies

● Staking

How do these relate to each other?

Cryptocurrency

A hot word on everyone’s tongue over the past few years, cryptocurrency is a market that has blown up. With incredible returns and a diverse set of tech apps that allow for easy investing, it’s no wonder that many people are now familiar with this system.

As it uses blockchain, it doesn’t rely on any middle institutions, like banks or governments, making it a bit of a controversial topic. Although some banks oppose cryptocurrency because it could destabilize their currencies, others are now incorporating crypto in their day-to-day practices. Major businesses, including Visa (NYSE) and Mastercard (NYSE), are now focusing on cryptocurrency.

Crypto investing is when you exchange your currency for digital. If the digital currency’s value goes up, you’re making a profit.

Placement

If the cryptocurrency you’re investing in allows staking, then you’ll be able to commit a certain amount of coins over a certain amount of time and then receive passive income on them. Staking helps to ensure the currency’s stability and long-term viability.

Most DeFi platforms have some sort of staking. An investor puts down coins to ensure they get over their time. Staking is a new way of earning passive income. It can earn users between 1-20% interest.

While these are some of the main forms of investing on DeFi platforms, it isn’t all sunshine and rainbows. Many people see their investment disappear in an instant due to crypto’s volatility.

DeFi Problems

Scam wicks are a problem that is currently affecting DeFi projects. If you’re not in the DeFi space, you’ve most likely never heard of this phrase, so we’ll cover what this is.

Many people in DeFi set stop-loss order on their tradeable assets. They believe an asset’s value will drop. Let’s say they believe the price of a coin will drop from $100 to $90. Just in case, to quite literally ‘stop’ their losses, they’ll place a stop-loss order at $110. Their stop-loss notification will go off if the coin’s price reaches $110.

Price increases will cause more people to be informed of their stoploss. This causes a chain reaction of people buying more coins and pushing the price higher. Scammers will purposely place huge orders on a coin to drive up the price, triggering people’s stop losses and then causing further buying panic. Once the price rises, they’ll sell their shares, and profit, while those that bought are left with a currency that plummets back down in value.

DeFi is notorious for committing scam wicks, since the majority of DeFi projects use data from one single exchange.

But, don’t panic; as a trader, there are ways you can protect yourself and your DeFi assets.

How can I protect myself against scams and wicks?

Fraud wicks can be intelligent systems that require creative solutions. These issues have been addressed by DeFi asset management platforms in recent years. HyperDex is a DeFi platform for asset management, which was founded in 2021.

HyperDex is able to organize its investors using a Cube, which allows for them to take control of their DeFi ecosystems.

Instead of investing alone, you’ll enter into one of three cubes, each of which forms different investing strategies, risks, and predicted returns. By opting to enter into one of these cubes, you’ll be pooling your funds with other users, preventing mass-market shifts due to the sheer quality held within the cube.

This innovative system not only protects HyperDex users but also makes it possible for beginners to make DeFi investments. This passive cube system allows you to get a return on your investment, without having to learn every trade.

Investors will only need to read the cube’s conditions and choose the one most in line with their investment goals.

Final Thoughts

Many people find DeFi an unfamiliar form of investing. Market manipulation can make them fall prey to more experienced investors who launch fraud wicks to activate their stop loss.

The new technology of HyperDex allows even novice investors to actively participate in this market. Without the need for advanced knowledge, HyperDex’s cube system allows investors — no matter their level or location — to invest with 100% certainty. DeFi is open to everyone, so investors don’t have as high of a hurdle.

We must use the best tools available to us as we continue our digital journey.

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