Disclaimer: This article is for informational purposes only and should not be considered financial advice. Always do your research before making any investment decisions. For more information, please read our full disclaimer.
Decentralized Finance (DeFi) and on-chain trading offer unparalleled financial freedom but come with inherent risks. This guide equips newcomers and degens with essential security measures, best practices, and tools to protect their assets while engaging in on-chain trading.
If something sounds too good to be true in crypto, it probably is.
// Wallet Security
Choosing a Wallet
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Use non-custodial wallets like MetaMask or Rabby for full control over your assets.
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Prefer hardware wallets (Ledger, Trezor) for maximum security.
Protecting Private Keys
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Never share your seed phrase or private key.
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Store backups offline in a secure location.
Wallet Best Practices
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Create separate wallets for trading, long-term holdings, and DeFi interactions.
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Use a burner wallet for interacting with new protocols.
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Regularly revoke token approvals using tools like Revoke.cash.
// Smart Contract & Protocol Safety
Identifying Reputable Projects
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Check if a reputable firm has audited the project; this is not usually needed for meme projects.
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Look for open-source code and active development on GitHub.
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Be wary of projects with anonymous teams and unclear tokenomics.
Interacting with Smart Contracts
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Use tools like DeBank or SonicScan to verify contract legitimacy.
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Be cautious with unverified contracts.
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Avoid signing blind transactions that don’t show clear intent.
// Avoiding Common Scams
Phishing Attacks
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Always check URLs and bookmark trusted sites.
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Enable anti-phishing protection in wallets like MetaMask and Rabby.
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Avoid connecting main wallets to unknown dApps.
- Use browser extensions like Pocket Universe to protect and be alerted of potential scams.
Rug Pulls & Pump-and-Dump Schemes
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Avoid projects with high FDV and low liquidity.
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Check for locked or burnt liquidity and team vesting schedules.
- Use TG bots like Rick Bot and TTF Bot with built-in contract checkers to verify if safe.
Imposter Scams
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Verify official social media handles.
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Never trust unsolicited DMs from "admins" or "support teams".
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Double-check contract addresses before swapping.
// Secure Trading Practices
Using Decentralized Exchanges (DEXs)
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Stick to reputable native DEXs of Sonic.
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Always check slippage settings before confirming trades, <0.5% Slippage is standard practice.
Bridging & Cross-Chain Transfers
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Only use trusted bridges (e.g., DeBridge)
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Always verify bridge contract addresses from official sources.
Managing Liquidity and Yield Strategies
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Research protocols before providing liquidity or yield farming.
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Monitor impermanent loss when participating in liquidity pools.
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Diversify across multiple pools to manage risk effectively.
// Staying Anonymous & Protecting Privacy
On-Chain Privacy
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Use new wallet addresses for different DeFi interactions.
Off-Chain Security
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Avoid sharing wallet addresses linked to your identity.
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Use a VPN and privacy-focused browsers when accessing DeFi platforms.
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Optional: Opt out of data tracking on DeFi websites.
// Best Practices for Degens
Risk Management
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Never go all-in on a single trade or protocol.
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Only use funds you are willing to lose in high-risk plays.
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Set take profit levels and always have an exit strategy.
Maximizing Gains Without Overexposure
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Take profits regularly and move funds to secure wallets.
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Diversify into blue-chip assets to balance degen plays.
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Use stablecoins to hedge against market volatility.
Navigating New Projects & Airdrops
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Use burner wallets when interacting with airdrops and testnets.
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Verify contract legitimacy before claiming rewards.
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Be cautious of wallet-draining scams disguised as free claims.
// Security Tools & Resources
Essential Tools
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Revoke.cash (for revoking smart contract permissions)
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SonicScan (for tracking wallet activity)
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Pocket Universe (for phishing protection and malicious transaction alerts)
Security Best Practices
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Regularly update your wallet software.
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Enable 2FA for centralized exchanges.
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Stay updated on security breaches and new attack vectors.
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Follow crypto security experts on X (Twitter) for real-time updates, such as ZachXBT and OfficerCia
- Follow Sonic's main X account for any updates: Sonic Labs
// Conclusion
DeFi and on-chain trading offer immense opportunities but carry significant risks.
By following these security measures and best practices, you can trade confidently while minimizing exposure to scams and exploits.
Stay skeptical, stay informed, and always prioritize security over convenience.
REMEMBER: If something sounds too good to be true in crypto, it probably is.
