Can you lose money on DeFi?

If a transaction is sent with too little gas, it may not receive enough computational power to be executed, resulting in a failed transaction. This scenario can be particularly frustrating for users who are unfamiliar with the intricacies of blockchain networks and gas fees.

To mitigate these risks, users should carefully monitor token rates and adjust their slippage tolerance accordingly. Additionally, they should ensure that they have sufficient gas fees to cover the cost of their transactions. By taking these precautions, users can reduce the likelihood of experiencing failed transactions in DeFi.

In the realm of Decentralized Finance (DeFi), users often encounter instances where transactions fail, resulting in monetary losses. One of the primary reasons for such failures stems from the dynamic nature of token rates.

When executing a swap, users specify a slippage tolerance, which is the maximum allowable fluctuation in the token's price before the transaction is executed. If the token's rate drops below this threshold during the swap process, the transaction may fail, leaving the user without the desired tokens and potentially out of pocket.

Another factor contributing to failed transactions in DeFi is insufficient gas fees. Gas, the fee required to conduct transactions on blockchain networks, plays a crucial role in ensuring that transactions are processed efficiently.