No worries, this stuff is complicated, and it is confusing for all of us. Which is why we meet here to compare notes and share our understanding.
I think of investing in DeFi like baking a cake.
Step one is assemble the ingredients. Step one has substeps. Step two is mixing the ingredients. This step also has substeps. Step three is the baking and there are several instructions for this last part.
DeFi is like this. There are several steps you need to go through and one is the gathering of ingredients and this step involves swaps and bridges. During these swaps and on the bridges your assets may not be under your control. These steps can be manually done or automated via code or smart contract. But if the manual or coded function involves a step where your tokens are no longer under your control, you are trusting the code with your tokens. And token loss can occur.
So the fact that your interacting with code or smart contracts isn’t the issue. It’s the fact that the code requires trust because your tokens leave your wallet and go to some one else’s wallet. This is the issue of trustless versus trusted. The bridge step is a high risk one for this reason.
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