After being discouraged from DeFi mining, how will you choose to continue to participate in mining or investment?

After being discouraged from DeFi mining, how will you choose to continue to participate in mining or investment?

DeFi Decentralized Finance literally means "decentralized finance", which actually refers to various decentralized protocols built on blockchain networks (mainly Ethereum networks) to build an open financial system with transparency, accessibility and inclusiveness. Although DeFi mining has been popular for a long time, it still attracts novices with considerable returns.

What are the parts that easily dissuade newbies from entering DeFi mining?

1. First is the mining fee: Gas Fee = Gas Limit (limit) * Gas ​​Price (price)

Gas Fee is the handling fee paid to miners. When you transfer money on the Ethereum blockchain, miners have to package your transaction and put it on the blockchain to complete the transaction. In this process, the computing resources of the blockchain will be consumed, so you have to pay a fee.

Different operations have different default Gas Limit values. The more complex a transaction is, the more computing resources it will consume, and therefore the more Gas it will cost. For example, the cost of a CRV contract transaction may differ by $400 compared to a simple ordinary transfer operation.

Gas Price refers to the amount of Gwei, which affects the speed at which your transaction is packaged and put on the blockchain by miners. When a transaction is expected to be completed faster, it is necessary to increase the Gas Price to encourage miners to package the transaction, which will also generate higher Gas. For example, when the network is congested, you can speed up the completion of the transaction by increasing the Gas Price and turning on the bidding mode. The higher the price, the higher the transaction will be.

Basically, at this point, small retail investors are discouraged from wanting to mine independently.

2. A secure wallet is a necessity

One of the most important tools for DeFi mining is the web3 wallet, which can store funds and interact with the Ethereum blockchain.

For example:

Open source Google Chrome and Firefox browser plug-in wallet: MetaMask

Mobile wallet apps: Coinbase Wallet, imToken

Hardware cold wallet: Ledger, Trezor

Public and private keys

After creating a wallet, you can export the private key by entering the password. The private key consists of a long string and is randomly generated. There is only one private key for one address. It is used to control the signature during transactions. Only with the private key can the funds in the account be controlled. It is equivalent to the transaction password of a bank account and is used to decrypt information encrypted by the public key. Leakage will lead to the risk of losing coins.

The public key is generated by the private key through an algorithm, using elliptic curve encryption. The private key can be used to calculate the unique public key. The public key is used to verify the signature of the transaction. The data signed by a private key can only be verified by the corresponding public key. The public key is equivalent to a bank account and there is no risk after it is made public.

Wallet Address

The address is generated by the public key using a hash operation. Money is transferred to each other through the wallet address, which is also the coin receiving address. The Ethereum wallet address is a string of numbers and letters starting with 0x.

Mnemonics

Mnemonics are another form of plaintext private keys, and their purpose is to help users remember complex private keys (64-bit hash values). Mnemonics are generally composed of 12, 15, 18, or 21 words, which are taken from a fixed vocabulary and are generated in a certain order according to a certain algorithm.

When creating a wallet address, please remember to back up your mnemonic phrase, which is the only proof of your control over your assets.

Some people always think that if they lose their mnemonics, they can go to a counter to retrieve their passwords, but here, there is no such thing. You need to rely on yourself. Examples show that many people who lost their private keys ended up losing huge amounts of money.

3. Contract risks of DeFi

In 2020, the total amount of money taken or stolen in DeFi attacks has reached $36 million. But because the dForce attackers returned $25 million of the stolen money, the actual amount is about $11 million.

Compared to Ethereum’s early days, the average value lost per hack has dropped significantly. In 2020, eight of the 10 attacks were for less than $1 million.

Compared to traditional cybercrime, information on the blockchain is more valuable to attackers because a successful attack on a smart contract can bring direct financial rewards. Traditional hacked information, such as stolen personal information, needs to be sold to make money, but assets are directly stored on smart contracts.

The risk of contracts has always existed, but there are also relatively stable DeFi mining projects, such as CURVE\Swerve, etc. In the process of participating in mining, safety is the first priority, and stable high returns are the second. If you blindly rush into a project just because you hear that the daily returns are high, you will lose yourself.

4. Retail investors rely on safe and reliable platforms for mining investment

Small retail investors can participate in DeFi mining and earn profits through safe and reliable platforms, such as Matrixport.

1) Choose DeFi Smart Selection, you don’t need to monitor the market in real time to sell and transfer. You can choose to deposit and withdraw at any time, and have a guaranteed return on mining.

2) Choose Trend Zhiying: DeFi projects and option portfolio asset investment. When a unilateral market occurs, you can get a higher rate of return while guaranteeing the bottom line.

Matrixport APP download address is here:

Android system: Android phone users can search for Matrixport APP directly in the mall

IOS system: After purchasing an overseas Apple account on Taobao, open the mobile APP store > click on the avatar and scroll down to the bottom to log out of the original account > enter the new overseas account + password > click to log in. If two-factor verification appears, click other options and choose not to upgrade and do not click to continue. Do not log in to the overseas account in the phone settings. After the switch is completed, search for Matrixport to download.