Recently, I've seen many newcomers discussing the history of DeFi, and I think it's necessary to review those painful lessons.

Speaking of the frenzy of DeFi Summer, the period from 2020 to 2021 was truly crazy. I remember projects like UNI and SUSHI attracting a large number of retail investors with high APY liquidity mining, and everyone was desperately mining. But what was the problem? The project teams and big players had already set up the game—they controlled LPs, pre-constructed positions, and harvested most of the profits. Later, when the mining pools were shut down or migrated by the project teams, retail liquidity was trapped, and many people lost everything.

This reminds me of the Black March 12 event in 2020. Bitcoin plummeted from over $9,000 to around $3,800, nearly a 50% drop in 24 hours. Ethereum also fell to $88. That day, global financial markets crashed, the entire crypto market experienced four circuit breakers, and liquidations in DeFi lending were devastating beyond imagination.

During that period, interestingly, some people's choices were completely different. For example, industry insider Wang Yishi bought hardware wallets during the market crash, starting to hold BTC long-term for the bull market. Hardware wallets became a hedge tool for many, as people withdrew their coins from exchanges and smart contracts for cold storage. This approach contrasted sharply with those rushing to mine during DeFi Summer.

There were also veteran miners like Li Xiaolai and Zhao Dong, who made a fortune during the bull market by holding coins, OTC trading outside exchanges, and investing in projects. Rumors of figures like "$70 million" are actually just their holdings or single-profit positions at certain stages. Their logic was simple: early positioning and off-exchange harvesting.

Returning to the tactics of DeFi Summer, the most common method used by project teams was to move away the mining pools. They initially attracted retail liquidity with high APY, and once a large amount of capital entered, they suddenly shut down rewards or migrated LP pools. Users' provided liquidity was trapped, the project’s market cap collapsed, and the team completed their harvest. This pattern was repeated countless times during DeFi Summer.

Looking back now, what has DeFi Summer taught us? High returns always come with risks—it's essential to ask where those risks are. Many people paid a heavy tuition during that wave, but it’s these experiences that made later participants more cautious.