Gemstones Finance: Keeping Your Locked Funds Safe & Secure
Introduction
The growth of cryptocurrency and its associated technology, blockchain, over the last decade can only be described as phenomenal. Cryptocurrency has expanded opportunities for investors to make money for true believers. While traditional banks are known to pay a quarter percent on your deposits, Decentralized Finance (DeFi) projects are thwarting the trend by paying investors who lock their funds 6% or more. The process of locking your funds with a DeFi protocol is known as yield farming, and bold investors have taken advantage of such opportunities to make a kill with crypto investment. The growth of DeFi is evident.
It’s safe to say that yield farming has offered cryptocurrency investors better and more lucrative opportunities. DeFi has led to the emergence of projects, including exchanges and protocols that broker crypto loans, and allowing digital asset holders to earn interest on their locked funds.
But just like Bitcoin, these services are decentralized, thus do not require anyone’s permission to use them. Similarly, the services can be accessed from anywhere around the world, where people do peer-to-peer trading and lending that is powered by smart contracts. The smart contracts serve to enforce whatever agreement is made between trading parties (buyer and seller or lender and borrower). The agreement is set for a particular timeframe, e.g. 6–12 months.
DeFi Ecosystem Security Issues
The rapid growth of DeFi is evident for all to see. As of April 2021, the total value of DeFi tokens locked in liquidity pools hit $100 billion, with the value growing 50 times more than it was the previous year. But this growth is accompanied by an almost equal amount of challenges; security being one of them.
In 2020 alone, there were 122 reported attacks, $3.8 Billion stolen from the DeFi ecosystem alone. The security concerns have worked well in the hands of critics who believe that cryptocurrency’s role in revolutionizing finance is more of a fad than a reality.
Just how safe or secure are your locked funds in a DeFi project?
Theoretically, DeFi platforms should be much safer and secure than their centralized counterparts. However, this is not necessarily true. A review of many DeFi platforms shows that most of them emphasize preventing hacks. However, this approach doesn’t seem to be effective, going by the aforementioned numbers.
Countless security issues on DeFi projects are being reported, despite the industry players working hard to seal these security loopholes. For example, we continue to witness token minting, auto-dumping yield farm bots, and rug pulls. The security concerns have become the order of the day such that almost everyone in the DeFi space knows a victim of one or two of these scam activities.
As a yield farmer, you expect to be rewarded for locking your funds with a DeFi protocol. DeFi yield is a high-risk, high-reward kind of investment- if your timing is right and the underlying instrument is legitimate. But you don’t want to lose your investment as well. This is the reason why many in the DeFi space are getting excited with projects like Gemstones Finance- a platform working to ensure your locked funds are well protected from such malicious activity.
The Current Market Offers
The yield farming market opportunities provided by the DeFi protocols are similar to fintech startups that dominated the financial world a few years ago. These projects are for investors with deep knowledge of cryptocurrency. Such investors also understand the platforms they are working with, and will never lose sleep over what happens to their investment in these DeFi protocols.
DeFi represents the true picture of why cryptocurrency was created in the first place- to offer the world a decentralized financial system that has historically evaded traditional centralized financial systems. The current DeFi markets are in loans, currency exchange, payments, and insurance. Experts predict that DeFi’s applications will go beyond the financial sector, as more applications such as ticketing and eCommerce are likely to benefit from DeFi innovations.
Illegitimates and scam projects and how to recognize them
When you lock your funds to earn some yields, you expect that the DeFi project keeps its side of the bargain by giving returns as per the smart contract agreement. While the funds are supposed to be free of any risk, we have witnessed mega scams on some fake DeFi projects.
Late last year, a yield chaser looking for the next big DeFi project to invest in reportedly lost $140,000 worth of Uniswap UNI tokens to a yield farming scam. From the infamous “rug pulls” to outright taking off with presale funds, scammers have threatened to dampen the progress DeFi is making in liberating the financial industry from the chokehold of traditional centralized financial systems.
Fake yield farming incentives
While there are many legitimate yield farming projects created by top developers in the DeFi ecosystems, there are also many scammers just lurking around to scam unsuspecting investors of their locked funds. The scammers may copy the code of existing projects and add their malicious code to enable them to pool a rug with investors’ funds.
Gemstones Finance helps you identify legitimate and secure projects
From what we have learned, no one is safe from crypto scams. It’s much more complex, hence anyone can fall victim. Gemstones Finance is a leading Yield Farm on the Polygon network with the best farms. To avoid the vulnerabilities surrounding DeFi projects and yield farms, Gemstones Finance has established a system that allows them to authenticate the legitimacy and security of DeFi projects before they list on their platform.
The Yield Farm has also established anti rug strategies that ensure rogue developers don’t ‘rug pull’ with investors’ money. Gemstones Finance emphasizes the security of your locked funds through a defense program in their smart contract that shields investors against parasitic pump & dump groups and bots. The farms will have a two-hour harvest lock-up period to minimize the effects of auto-dumping yield farm bots. The good thing is that this feature will only apply to your reward harvest, hence no holding up of your capital investment. The platform has also put in place an anti-whale dumping mechanism that automatically rejects any transactions greater than 0.5% of the total supply. This percentage will be scaled as the market cap increases.
Conclusion
Cryptocurrency is revolutionizing the way we do business. Cryptocurrency and blockchain technology has automated many financial processes to bring banking into the hands of the people. However, the opportunities that come with the rapid growth of cryptocurrency have also brought with them sophisticated risks. Many people have had their lives destroyed by scams in the crypto industry. The technology and the people behind these DeFi projects must also be scrutinized to ensure what they provide is legitimate and secure.
While it’s always advisable to look out for red flags when investing in cryptocurrency, especially through yield farming, some of the tactics employed by scammers are much more complicated for an average crypto investor. Gemstones Finance is a Yield Farm that ensures your investment is secure and devoid of any hacking possibility through anti-rug pull and anti-whale security features powered by their smart contract.
More information on our project can be found here:
Twitter: https://twitter.com/GemstonesDefi
Telegram: https://t.me/Gemstones_Finance
Telegram Announcements Channel: https://t.me/GemstonesAnn
