You Are Your Own Bank: How to Start in DeFi Without Losing Your Life Savings

Decentralized Finance (DeFi) promises financial freedom. You can lend, earn interest, and trade assets without banks. But this freedom comes at a price: total responsibility. In the world of DeFi, there is no hotline to call if you forget your password or send money to the wrong address. Here, you are the CEO, the security guard, and the IT department of your own bank. How do you avoid failing at this job?

1. Understand the Difference: Wallet vs. Exchange
Most beginners keep their funds on centralized exchanges (like Binance or Coinbase). This is convenient, but it isn’t true DeFi. If the exchange collapses, you lose your funds (remember FTX?). True DeFi starts when you create your own non-custodial wallet (e.g., MetaMask, Rabby). That is when the funds are truly yours—but also, only you are watching over them.

2. The Seed Phrase – The Holy Grail of Your Funds
When you set up a wallet, you receive a sequence of 12 or 24 words (the seed phrase). This is not a password for account recovery. These words are your money.

• The Golden Rule: Never, under any circumstances, type these words into a website, send them via email, or take a photo of them with your phone.

• Storage: Write them down on paper (or a metal plate) and hide them in a secure location. If anyone learns your seed phrase, your wallet will be drained in seconds.

3. Hot vs. Cold Wallets
A browser wallet (hot wallet) is convenient for quick transactions, but it is constantly connected to the internet, making it vulnerable to attacks. If you plan to hold significant amounts of crypto, invest in a hardware wallet (cold wallet, e.g., Ledger or Trezor). This device physically approves transactions. Even if your computer is infected with a virus, a hacker cannot steal your funds without physical access to the device.

4. Don't Trust, Verify
In DeFi, every transaction is irreversible. There is no "Undo" button. Before you click "Send" or "Approve," check three times:

• Is the recipient's address correct? (Check the middle characters, not just the start and end).

• Which site are you connecting to? (Is it definitely uniswap.org, or is it unisvvap.org?).

Summary:
Security in DeFi is not about technology; it’s about habit. Slow down. Haste is the greatest enemy of your money. Before you invest your first dollar, invest time in securing your digital vault.