There was a perfect storm in the crypto market last week. Almost all cryptocurrencies are in decline. Some cryptocurrencies have lost more than half their value.
As I mentioned in my previous articles, I sincerely believe in the concept of DeFi (Decentralized Finance) and think that it has a bright future. So I had invested modest amounts in various Defi platforms. At the first stage, I intended to get to know the DeFi ecosystem rather than make money. As the title suggests, I have had some accidents related to my DeFi investments; I will mention each of them in the titles below. Fortunately, I survived the accidents with minor abrasions.
Binance Ecosystem Price Drops
I make my DeFi investments through the Binance Smart Network. Because transaction fees on the Ethereum network are too high to allow small investments. Pancake Swap is one of the applications I use in this context. Pancake Swap is the largest investment platform in the world in terms of the number of users. I had invested in liquidity pools on this platform. 50% of BNB and 50% of other cryptocurrencies will be the subject of swaps invested in the pools. When the BNB price fell 52% in the last week, and other cryptocurrencies in the BNB ecosystem had similar declines, the assets I hold on Pancake Swap fell to half the price. Although you can say that in this environment, which cryptocurrency has not regressed?
Unauthorized Access To Finnexus Options
I recently invested a small amount in an options application called Finnexus(FNX). Derivatives markets, where Futures and options are traded, have a huge volume in traditional finance. I do not doubt that similar growth will occur over time in the area of decentralized finance. For this reason, I invested some FNX in the pool of the Finnexus platform, the first option application on the Binance Smart Network. In fact, the high returns provided by the app were also attractive. 2 days ago, suddenly, the price of FNX fell by 85%. When I investigated the cause, I found out that their systems had been hacked—Finnexus Statement regarding the issue.
In short, they will issue a new token and eliminate the victimization. We'll live and see what happens.
Pancake Bunny Price Manipulation
Pancake Bunny, Pancake Swap's Yield Farming app, was one of the platforms that were the star of DeFi spring. What is Yield Farming? These applications allow Defi income to be added to the principal to create a compound interest effect. For this, you may think that why you need to write an app. Adding return to the principal creates a transaction cost, resulting in a break-even point analysis problem. Pancake Bunny automatically adds revenue from pools to the principal with optimal frequency and timing.
The app's cryptocurrency, Bunny, rose to $ 500 at the end of April when the DeFi craze peaked, then its price dropped to half due to the general market downturn. Although I invested in the platform, I didn't care much about the fall because I staked Binance USD and get Binance USD+Bunny. The Bunny price had a minimal impact on my investment. I witnessed a tenfold the Bunny price drop to $ 25 yesterday. Their systems were not hacked; some manipulators manipulated Bunny's price using flash loans. What is a Flash Loan? Loans used without any collateral during the same block period are called flash loans. The speculation over Bunny, combined with fragile market conditions, led to such a result. Pancake Bunny team statement on the subject: Pancakebunny Statement
I believe Pancake Bunny's future will be bright. I even made a little Bunny investment when the prices were down.
Conclusion
Two weeks ago, I wrote an article called 7 Ways to Reduce the Risks of Cryptocurrencies. It was interesting that almost all of the risks I mentioned in that article occurred in such a short time. So we have to take risks seriously.
The lesson I learned from this process was not to invest in less known DeFi platforms that provide very high returns. Either they experience weakness in security, or the coins they distribute create inflation, preventing price sustainability, especially in stormy times.
Recent price falls have further increased my interest in the crypto market. I keep a close eye on prices to make new investments. Let's see what the next days bring.
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