Money stuck in DeFi wallet apps is a common occurrence. This can happen due to wrong wallet addresses, network congestion, and security breaches. That is why it’s important to understand the mechanics behind these issues to prevent them.

With that in mind, we created a guide to explain why these problems occur. We’ll also show you how to fix money stuck in DeFi wallet issues and get your funds out.

What Does Money Stuck in DeFi Wallet Mean?

A DeFi wallet is a crypto wallet that enables its users to interact with the best DeFi apps and protocols. If you can’t withdraw from a DeFi wallet, it means that the transaction has failed or that it has not been fully processed.

This can happen for common reasons like network congestion and insufficient gas fees. However, it can also indicate more serious problems like smart contract failures and fraudulent activities. Moreover, you may encounter compatibility issues if the DeFi platform doesn’t support the wallet. If this happens, you’ll need to contact the wallet provider for assistance.

Reasons Why Money Gets Stuck in a DeFi Wallet

Here are the main reasons that can cause your funds to get stuck in a DeFi wallet:

Incorrect Gas Fees

Every blockchain transaction requires gas fees. Gas fees refer to compensation paid to miners and validators for verifying transactions. That said, setting an insufficient network fee in a DeFi wallet will slow down the transaction time. Why? Because validators will give priority to transactions with higher gas fees. Funds can also remain stuck in a DeFi wallet if you don’t have enough tokens to pay the necessary gas fees or if you entered the wrong wallet address.

Keep in mind that BTC transactions take between 30 minutes and two hours. If your transaction stays unconfirmed for 72 hours, it will get canceled.

Network Congestion

Network congestion is the second main reason funds get stuck in a DeFi wallet. This problem occurs when the number of submitted transactions exceeds the network’s processing capacity. When too many transactions are submitted simultaneously, the network becomes overloaded, leading to delays. Cryptocurrencies are traded the most between 8 AM and 4 PM, which means that during peak times, more than 200,000 transactions will be stuck.

In addition to high transaction volume, slow block times, increased demand, and ICO launches, network congestion can occur if malicious actors start sending a large number of low-value transactions.

Smart Contract Failures

Smart contracts are computer code programs that enable people to trade cryptocurrencies without intermediaries. They also record the terms of an agreement between two parties. Transactions can get stuck in a DeFi wallet if smart contract failures occur, such as flaws in their codes or if users don’t meet the terms of the agreement.

Smart contracts are also vulnerable to hacks. If fraudulent activity occurs, you may end up with a frozen DeFi wallet. On that note, wallet providers will freeze your assets if they believe your account has been compromised.

How Do I Get My Money Out of a DeFi Wallet?

Now that you know the main reasons why your money gets stuck, here’s how to transfer money from DeFi wallet to bank account:

  1. Verify your wallet and network status

    • Connect your secure DeFi wallet to the Internet.
    • Verify your wallet to prove ownership and check the network congestion. If the network is congested, wait until it clears.
    • Regularly update your wallet to fix bugs and ensure the app is up to date.

  2. Adjust transaction settings

    • Set the gas fee according to network demands so that validators and miners prioritize your transaction.
    • Go to advanced settings and set your fees to average or fast.
    • Double-check the recipient’s wallet address.

  3. Initiate the transfer or withdrawal

    • Transfer the funds from your DeFi wallet to a reputable crypto exchange and initiate a transfer. You can also use P2P platforms and crypto debit cards. If this doesn’t solve the money stuck in DeFi wallet problem, contact customer support and ask for assistance.

How to Prevent This From Happening Again

You can prevent this issue from happening again in the following way:

  • Optimize your transaction fees. As mentioned before, miners and validators prioritize transactions with higher fee rates. So, to prevent your transaction from getting stuck, set a fee that will correspond to the current network conditions. Many DeFi wallets have features allowing you to determine the fee based on network conditions. If your wallet supports the RBF feature, you can replace your low-fee transaction with a new one that will have a higher fee. This will speed up the pending process.
  • Update your wallet software. Regular updates will keep your wallet up to date, enable it to function properly, and remain compatible with the network on which it operates. Updates usually include bug fixes, security improvements, and performance improvements. If you are still experiencing issues, you can try deleting corrupted or outdated files and reinstalling the wallet.
  • Optimize your security practices. Is crypto DeFi wallet safe? Yes, as long as you optimize your security practices. This includes checking the accuracy of wallet addresses before conducting transactions and storing private keys in a safe place, such as a cold wallet. Moreover, make sure to enable two-factor authentication to prevent unauthorized access, use strong passwords, and encrypt your wallet. You can also use multi-signature wallets to add an additional layer of security.

Conclusion

Low gas fees, network congestion, and smart contract failures are the most common factors that can lead to money being stuck in a DeFi wallet. To prevent this, you should set the transaction fees according to the current network conditions. However, avoid conducting transactions during peak hours.

You should also update your DeFi wallet regularly to enable it to operate properly. You can withdraw the stuck money from your wallet by transferring the funds to crypto exchanges and initiating a withdrawal. If that doesn’t help, contact customer support.

FAQs

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