Crypto has a lot of terminology, among which is “DeFi Degen.” These reckless DeFi gamblers make and lose money by “aping in” to their trades.
An interesting term that floats around the crypto space is ‘DeFi Degen,‘ a title granted to (and often proudly worn by) people whose activities on decentralized finance (DeFi) applications can only be described as reckless gambling. Many protocols in the DeFi industry are specifically designed for people with high-risk behaviors who know they stand a good chance at losing their deposit and accept the risks of doing so.
Blockchain smart contracts are used heavily to create new forms of financial applications, and they provide extensive functionality that allows for a whole interconnected ecosystem of decentralized applications (dApps) to exist. While this functionality is very useful for innovation and experimentation, it can also be abused to create scams and automated Ponzi schemes. It is possible to create experimental DeFi projects that provide massive gains for their early users, but these projects tend to be unstable and collapse eventually, and the gains have to come from somewhere or someone.
CoinGecko describes a ‘degen’ (short for ‘degenerate’) as someone who “buys into an asset not because they see value, rather they do so with the belief that others will join in after them and speculate on the price swings.” While some DeFi Degens can make eye-watering returns on a few lucky moves, most of them will get wrecked by crypto due to their own greed and FOMO, and would probably be better off gambling at a casino. Regardless, many DeFi protocols exist that cater to this type of trader, and leverage trading is one of the riskiest and most popular activities they engage in. DeFi Degens always seek out the highest yields and the highest risk, and will dive into obvious Ponzi schemes and pump and dump…
