Simple Ways to Stay Safe and Protect Your Funds

In Part 1, we explored the major problems in DeFi — smart contract vulnerabilities, rug pulls, phishing scams, and wallet hacks. Now, let’s talk about how to protect yourself and use DeFi safely.
Whether you're a beginner or experienced user, these tips will help you avoid common traps and keep your crypto secure.

🔒 1. How to Avoid Smart Contract Vulnerabilities

Smart contracts are the core of DeFi — but they can have bugs. You can’t directly control the code, but you can control which projects you trust.

✅ Solutions:

• Use Audited Projects
• Only interact with projects that have gone through a professional code audit by a trusted security firm (like Certik, PeckShield, or Trail of Bits).
• Check Project Age & Reputation
• Older projects like Aave, Uniswap, Compound have been tested by time and thousands of users.
• Avoid “Too New” Projects
• If a DApp just launched and is offering crazy returns, wait and watch. Early users are often test subjects.
• Use Test Transactions
• Start with a small amount to test the DApp’s behavior before committing large funds.
• Track DApp Activity
• Use platforms like DeFi Llama or DappRadar to check real usage stats. If no one is using the DApp, there’s probably a reason.

💣 2. How to Avoid Rug Pulls

Rug pulls usually happen in projects with anonymous teams, no real product, or fake hype. Protect yourself by doing simple checks.

✅ Solutions:

• Research the Team
• Projects with public, known team members are less likely to rug pull. Look for LinkedIn profiles, interviews, or a history in crypto.
• Look for Locked Liquidity
• Use tools like Mudra or Team Finance to check if liquidity is locked for a set period.
• Verify Code Audits
• Never trust “audit badges” on the project’s website alone. Check if the report is real and available on the auditing firm’s site.
• Avoid Hype Without Product
• No working app? Just a token and a Twitter account? That’s a red flag.
• Don’t FOMO (Fear of Missing Out)
• If something feels rushed, like “Buy NOW before it’s too late!” — walk away.

🛡️ 3. How to Protect Against Phishing & Wallet Scams

Your wallet is your bank. If someone tricks you into giving permission or your seed phrase, your money is gone forever.

✅ Solutions:

• Never Share Your Seed Phrase
• Not with support agents, not with friends, not even with family.
• Double-Check URLs
• Always make sure you're on the real website. Bookmark trusted sites like https://app.uniswap.org or https://metamask.io.
• Don’t Click Random Links
• Ignore DMs offering giveaways or airdrops. They’re almost always scams.
• Use a Hardware Wallet
• Devices like Ledger or Trezor store your private keys offline.
• Use Tools Like Revoke.cash
• Go to https://revoke.cash to check what DApps have permission to access your wallet. Remove anything suspicious.
• Beware of Fake Browser Extensions
• Only download extensions from official sources.
• Enable 2FA (Two-Factor Authentication)
• For exchanges or centralized tools, always enable 2FA using apps like Google Authenticator.

DeFi gives you power — but also full responsibility.
To stay safe:

• Choose reliable, audited DApps
• Avoid hype and anonymous projects
• Stay alert to phishing and wallet scams
• Always control your private keys

The truth is, no system is 100% safe, but with the right habits, you can avoid 99% of threats.

If it sounds too good to be true in DeFi — it usually is.