Pay attention to where you invest your money.
I have been saying that custodians are not suitable for cryptos since they are not your keys, not your cryptos, and yet I am using a series of custodians. Almost all of my funds sit with a custodian or a group of custodians when trading, but I understand the risk and I am only doing it for the short term, and I am not about to use custodians as my way to save my coins. Risking your hard-earned crypto is not worth it if you count the risk, but short-term gains are always good, especially if you can get away with your money intact. The new trend I am observing is governments' busting of crypto services, being the last DeFi Money Market.
Read the following headline:
US SEC Shuts Down $30 Million Defi Money Market in First Decentralized Finance Bust.
If Defi Money Market was decentralized, how come they got busted by the US SEC? You must learn to read between the lines and start asking questions on your own about the things you hear in the news. If it was decentralized, how come the two founders were caught between a hard place and a sword? It can only mean that Defi Money Market was never decentralized in the first place and investors never did their proper research, or the government has found a way to get into crypto funds without having to ask for private keys. In other words, cryptos have been hacked by the government, and your money is not safe.
If you read the news article, you will find out that the two founders of the project were caught by the government and charged with running an unlicensed security business. They were selling their tokens and not telling the truth to investors about their practices and how they were hiding losses.
We must pay attention when governments go and bust some crypto businesses because we need to ensure that the Feds have not broken the private keys of wallets. In the case of Defi Money Market, it seems the project had some point of centralization, and because of that, the government could enforce whatever law they were applying.
When it comes to DeFi, the Bitcoin Cash community must take a serious look because DeFi is coming to BCH with the help of SmartBCH. So it would be best if you made sure you only participate in real DeFi projects that don't have a central point of failure, like founders, community members, or centralized bridges. SmartBCH will have projects like UniSwap and others not so good or with a shallow track of honesty like HEX, a highly centralized coin with a founder that allegedly recycles funds in the project's early days. Recycling funds is illegal in many countries.
Once DeFi is integrated into Bitcoin Cash, you must be careful with your satoshis because you don't want to end up putting your money on a scam or a highly centralized token or market. Many stablecoins should be added as the default stable coin for Bitcoin Cash and SmartBCH DeFi, but you must read carefully before putting your money or exchanging your BCH for stablecoins. FlexUSD is a peg to the value of USDC and USDC is a peg to the dollar and the availability of CoinFlex.
The risk of putting your money in stablecoins is that the company that represents your stablecoins goes under, or they decide to burn your tokens. In the case of Tether USDT, they are having an issue with the US government at the moment, and we don't know how that will end up.
DeFi is coming to Bitcoin Cash so take note of what is happening because DeFi will introduce many opportunities to BCH and risks. When the time comes for you to participate in BCH DeFi, you must ensure you have all the necessary homework done to ensure you are putting your satoshis in the right place. If you don't know any better, holding your satoshis in layer one is always an option and a good option for safekeeping your value.
SmartBCH suffered a withdrawal to layer one well-known issue, a failure because of CoinFlex. Let it be this a great opportunity to learn and don't repeat the same mistake by making sure next time you invest in SmartBCH, you make sure Smart Bitcoin Cash has a more decentralized bridge. Something like a multisign bridge where many parties sign the transactions and not just one or a fully decentralized bridge like Sha-gate.
