As much as I want to avoid bad liquidity pools, I find it impossible to stay away completely. Why? While there are guidelines, there are no absolutes. After trying things out—experiencing both losses and gains—you start to develop your own personal crypto-guidelines. If you stumble once, you’re naturally hesitant to go down that road again. This has been my journey so far.

The Guru’s “Avoidance Rules”

Here are a few key rules from the guru that I’ve found helpful to steer clear of trouble:

1. Avoid Crypto Memes
   Don’t buy meme coins unless you’re ready to embrace extreme volatility. Prices can skyrocket but also plummet just as quickly.
2. Be Cautious with New Cryptos
   Don’t invest in newly launched cryptocurrencies, especially if they’re very new. But how new is too new? Is it 6 months or 3 months? I haven’t figured out the exact line yet.
3. Diversify Your Liquidity Pairs
   Don’t tie all your liquidity pairs to one protocol or one specific cryptocurrency. While many cryptos follow Ethereum’s price movements, avoid putting all your positions in Ethereum pairs.
   (For example, my MAGIC/ETH position taught me this lesson the hard way.)
4. Know When to Exit
   If a cryptocurrency starts performing badly, don’t be afraid to cut your losses and get out. (After all, they don’t say “HODL” for nothing—it’s not always the right move.)

The Guru’s “To-Do” Rules

On the flip side, here are some proactive strategies the guru recommends:

1. Stick to the Top 100
   Invest in cryptocurrencies that are in the Top 100 list (as seen on platforms like CoinMarketCap). These are often more established and less risky.
2. Monitor Your Holdings
   Keep a close eye on your investments. If the APR (annual percentage rate) is high, it’s prone to reverse direction quickly. Acting swiftly can help you preserve more of your crypto.
   (This assumes you’re already aware of the risks of investing in high-APR options.)
3. Have a Guru
   Seek guidance from a trusted source. There’s a lot of misinformation online, and having a knowledgeable mentor can save you from making costly mistakes.

My Takeaway

Crypto investing is a learning journey. While these rules may not eliminate all risks, they’ve helped me navigate the unpredictable waters of liquidity pools. With every mistake, I refine my approach—and with the guru’s advice, I’m better equipped to make informed decisions.