It’s been a big year for digital assets. With growing interest in the space and mainstream acceptance, the value of the cryptocurrency market briefly surpassed $3 trillion in November, and top coins like bitcoin and ether hit all-time highs.
But with the hype, scammers saw opportunity. Between January and July alone, $681 million was exploited in major cryptocurrency thefts, hacks and fraud, according to intelligence firm CipherTrace.
This year overall, many of the most notable hacks involved decentralized finance, or DeFi, projects, with more than $10 billion lost to DeFi theft and fraud, a November report from blockchain analytics firm Elliptic shows.
Though it’s impossible to find a sure bet, experts recommend investors fully understand the risks surrounding cryptocurrency, and DeFi especially, before buying in. There are also a few common scams and pitfalls to be aware of when trying to protect your investments.
Here are some tips.
DeFi or not, investors should take time to research before buying into any crypto project or token.
While no checklist is foolproof, investors should start by looking into a project or token’s website, where it’s available to buy, its white paper and its listed developers or founders. Though these attributes aren’t the only markers of…