If you imagine sending money, making a payment, or buying a financial asset- bank, brokerage, or other official intermediary comes to mind. Traditional financial services markets are overseen by different regulators. However, decentralized finance as an emerging peer-to-peer digital ecosystem allows people to indulge into financial transactions without relying on banks or any other middlemen.
It is an alternative approach that largely operates outside the traditional centralized financial infrastructure. With the help of the right set of DeFi trading tools, a crypto trader can efficiently monitor market trends, analyse wallet activities, and automate trading strategies. This not only saves time but also increases the chances of handsome returns. In this article, we will look into decentralized finance in detail, the top five free DeFi trading tools, their benefits and uses, and common crypto trading mistakes.
Decentralized Finance: Overview
Decentralized Finance, or “DeFi”, refers to a financial ecosystem that operates on a peer-to-peer blockchain technology while using crypto assets as a value of exchange and has no centralised control.
While crypto trading only allows investors to make profit from price fluctuations, the DeFi ecosystem has further expanded opportunities in the crypto industry by introducing decentralized exchanges (DEXs), lending platforms, and yield farming which allow traders to trade without intermediaries.
Common Crypto Trading Mistakes
Below are three main reasons and mistakes that a crypto trader usually does and fails to profit and sometimes, end up making losses.
Lack of Knowledge and Experience
Many investors in the crypto industry come up with an idea to invest less and earn more. For example, investing 1 lakh rupees and earning around 100 crore rupees. However, this is the rarest of rare cases. Investors without proper knowledge of technical analysis, technology, and market events make uninformed decisions that lead to high losses.
Experience in the crypto trading field is very important because new investors sometimes fail to manage the risks effectively and also overlook the importance of portfolio diversifications hence leading to financial setbacks.
Trading in Manipulative Market
The crypto market is known for its high volatile nature and susceptible to manipulations. Crypto Whales, who are individuals or entities that hold a large amount of cryptocurrency can influence prices which can cause market fluctuation affecting inexperienced traders who become victims of sudden market change.
Further, there is a prevalence of pump and dump schemes which can mislead traders into making poor investment choices.
Lack of Patience
According to trading experts, “patience is a virtue” which many investors lack. A crypto trader sometimes desires quick profits, leading them towards making impulsive decisions. For example, overtrading or entering positions without proper analysis of the involved factors. This results in buying at high and selling at low which will cause huge financial losses.
Successful crypto trading requires patience to grab the right opportunity after deep research and a well-thought-out plan.
5 Free Decentralized Finance (DeFi) Trading Tools
Below are five free DeFi tools that will be helpful in trading activity.
DEX Screener
DEX Screener is a data aggregator platform that provides real-time data mainly for newly launched cryptocurrencies. It is a tool for analyzing crypto pairs on decentralized exchanges and also exploring data across multiple DEX and underlying chains. It is a very easy-to-use platform that helps traders to monitor price movement, trading volumes and liquidity.
One of the most unique features that sets DEX Screener apart is its ability to analyze wallet transactions. With the help of the DEX screener, traders can track the activities of specific wallets and gain insight into buying and selling patterns of significant market players and hence, provide valuable information for making decisions.
Birdeye
Birdeye is a crypto data aggregator that helps traders with detailed analytics across multiple blockchains which include Solana, Ethereum, Arbitrum, BNB chain and others. It also provides real-time data. Birdeye incorporates more than 200 DEXs and AMMs that offer users precise token and trading data.
Birdeye uses historical market data, social media sentiment analysis, and on-chain transaction tracking which makes it a popular DeFi tool. It uses machine learning and artificial intelligence to facilitate advanced analysis that will be helpful for users to identify patterns and trends which gives them an upper edge in the crypto trading ecosystem.
Arkham Intelligence
Arkham Intelligence is one of the most popular blockchain analytics platforms that use artificial intelligence to deanonymize blockchain transactions, linking pseudonymous addresses to real-world entities. It offers users the ability to analyse crypto activities which provides insights into individuals and organisations behind blockchain transactions.
The DeFi tool has two main features- Arkham’s AI algorithm, Ultra which systematically identifies and catalogs blockchain address owners. This helps users to monitor the wallet activities of key opinion leaders (KOL) with over 1,00,000 followers which enhances transparency in the crypto space.
The other feature is Arkham’s Intel exchange which serves as a decentralized marketplace for trading blockchain intelligence.
GMGN.AI
GMGN.AI is a unique and advanced trading tool that is developed to offer real-time tracking, automated trading tools, and smart money analysis to help memecoin traders. It analyses blockchain transactions and wallet movements for traders to identify emerging trends before they become widely known.
This platform includes on-chain sniping tools for swift token acquisitions and cross-chain swap capabilities for trading across different blockchains which helps traders to gain profit in the volatile meme coin market.
ToxiBot
ToxiBot is an advanced telegram-based trading bot that is specially developed for the Solana blockchain and offers users automated trading capabilities. It helps traders execute rapid transactions and also manage and monitor their portfolios within the telegram application.
The most popular feature of this bot is copy trading, which helps users copy the strategies of experienced traders automatically. It democratizes access to advanced trading activities which enables new traders to benefit from the expertise of crypto professionals.
Conclusion
Decentralized Finance, built on distributed ledger technologies, offers services such as trading, lending and investing without using a traditional centralized intermediary. The above are considered as the best five DeFi tools for crypto users which provide insights, analytics, and automation to enhance trading strategies.
These tools assist traders to improve their decision-making and manage risk to increase profit in the volatile crypto market.
