The DeFi Wallet is a self-custody wallet that lets you operate directly on the blockchain and DeFi protocols. Since it is not a service regulated by MiCAR, it does not benefit from the protections provided for Young Platform's custody services: any loss therefore remains your responsibility. Before activating it, we invite you to read and accept the Risk Disclosure. This guide summarizes these risks in simple terms, explaining how to reduce them. The document does not replace the Disclosure, which remains the main reference text.
Keys: if you lose them, no one can help you
This is the most concrete risk for those using the DeFi Wallet. The keys that control your cryptocurrencies reside on your device, protected by the wallet password. If you lose your password and do not have a backup, or if third parties gain possession of it or export your keys, your funds could be lost irreversibly: Young Platform does not store this information and has no way to recover it.
How to protect yourself: save your wallet password in a password manager, enable the backup on Google Drive, never share passwords or keys, and ignore any instructions received from third parties, even if they appear to come from Young Platform. You can find all the details in the guide DeFi Wallet keys, passwords and backup.
Operation errors cannot be undone
On the blockchain, transactions are irreversible: whether it is sending to a wrong address, transferring on a wrong network, or an exchange confirmed by mistake, no one — not even Young Platform — has the ability to cancel or modify them.
What you can do: before giving confirmation, always carefully check the address, network and amount on the preview screen. For more important transactions, it is advisable to first make a test send with a minimum amount.
DeFi protocols can have issues
When you open a lending position, your crypto passes to the smart contract of a protocol that Young Platform does not control. The risks listed in the Disclosure mainly concern this step:
- Smart contracts. The protocol code may contain errors or vulnerabilities that can be exploited by an attack: deposited crypto can be lost, in whole or in part, with no possibility of recovery.
- Liquidity. If many users withdraw at the same time, the protocol may not have enough liquidity: your withdrawal may be delayed or executed under worse conditions.
- Oracles. Protocols use external price sources (oracles). If an oracle makes a mistake or is manipulated, the economic conditions of positions can change abnormally.
- Governance. The rules and parameters of a protocol can be changed by those who govern it (governance token holders), with effects also on positions already open.
- Automatic liquidation. In positions that require a guarantee (collateral), if the value of the guarantee falls below a threshold, the protocol sells it automatically, without notice and with potential losses.
- Protocol compliance. A protocol may be subject to investigations or measures in other countries, with interruptions or service limitations.
How to protect yourself: the available protocols are selected by Young Platform through an internal procedure, but selection does not eliminate risks. Deposit only a portion of your crypto, the one you can leave committed and, in the worst case, lose.
The value of crypto can drop
The value of crypto is volatile and can drop significantly in a short time. This applies to all crypto you hold in the DeFi Wallet, including those in a lending position: the reward does not protect against the drop in value of the deposited crypto. For stablecoins, the risk is different but not absent: their value depends on the issuer and its reserves, and for USDC also on the exchange rate between the dollar and the euro.
Technology can stop
Access to protocols depends on the correct functioning of the Ethereum blockchain and the technical infrastructure of the DeFi Wallet. Network congestion events, blockchain updates, failures or cyber attacks can slow down operations, make them more expensive or temporarily impossible. Young Platform, therefore, cannot guarantee uninterrupted availability of the service.
What you can do: your crypto remains on the blockchain even in the event that the app is not available. By keeping your wallet password and backup, you always maintain the ability to access it; furthermore, if you wish to stop using Young Platform services, you can export the keys to another wallet (to find out more, see the guide How to retrieve your private key and transfer your crypto when you close your account).
Rules can change
Regulations on decentralized finance are evolving, in Italy and abroad. Limits or bans on the use of certain protocols may arrive, and tax obligations may change. The declaration of crypto held in the DeFi Wallet and rewards accrued is your responsibility: Young Platform does not provide tax advice.
Scams
It is not a risk listed in the Disclosure, but it is the one most easily fallen for. Those who want to steal your crypto do not attack the blockchain: they convince you to make the operation yourself. They ask for your wallet password, private key or a screenshot, send you a link to an app or site that mimics Young Platform, and tell you that you need to "verify" or "secure" the wallet by sending crypto to an address. No Young Platform operator will ever ask you for your wallet password, private key, to unlock the wallet or to send crypto to an address. If this happens, stop contact and report it to Support.
What is not in the DeFi Wallet
To be clear about what you should not expect: there is no investor compensation system or deposit guarantee; MiCAR protections provided for regulated Young Platform services do not apply, including those on custody; Young Platform's insurance coverages, where they exist, do not extend to protocols and operations executed via the DeFi Wallet; no one can cancel a confirmed transaction or recover lost crypto.