Exploring DeFi on Binance Smart Chain (BSC)

in LeoFinance2 months ago

Screenshot 20210105 10.06.52.png

Until layer-2 solutions are fully rolled (ha ha...) out for Ethereum, Defi on the by far the largest alt-chain is going to be a plaything for whales and high net-worth individuals. Interactions with DeFi contracts is expensive at the best of times, and with spikes in gas prices due to high demand for block inclusion... well, it just isn't worth it for the regular person.

There are a number of alternative blockchains that have started to offer DeFi services, but I was most attracted to the Binance Smart Chain option. Mostly, that is to do with the fact that it is backed by a pretty large company... and it uses BNB as it's native token, which is handy as I have easy access to it already. In addition, it is already well integrated with Trust Wallet which makes it an easy to use, self contained ecosystem which utilises apps, exchanges and tokens that I am already using....

Other alternative blockchain approaches to DeFi use different apps and single use case wallets, which makes it more of a hassle to get into. Plus, their tokens don't have as much of a use case as the BNB tokens, which can be used in the Binance ecosystem for trading discounts, staking rewards and Launchpool rewards. So, a much wider and general usage for the token which makes it less of a risky purchase.

In this post, I'm just walking through the BSC DeFi projects that I have used and am interested in. There are many protocols in the BSC system, but I'm a pretty risk averse person and so I'm not really keen on many of them. They might offer stupidly great APR and all of that... but I'm wary.

The three protocols that I'm touching upon emulate similar protocols on Ethereum, which is why I'm following them. They offer a similar feeling and understanding to the DeFi protocols that I'm familiar with from the Ethereum ecosystem, so I'm happier using them. That said, there is a bit of hype still lingering around them... with weird NFTs and farming being quite prevalent. We'll see how sustainable they are after that sort of bootstrapping is finished.

Note that this is just an introductory post on these three protocols, I will do a more detailed hands-on in later posts for each of the three.


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Sigh... food based DeFi... we have Sushiswap to thank for that. I really wish they didn't have that sort of name, as it can be really hard to take the projects seriously.

Anyway, PancakeSwap is a pretty comprehensive AMM (Automated Market Maker) and farming pool protocol. It emulates Uniswap on Ethereum, with liquidity pools being provided by users in the form of paired assets. Rewards in the form of CAKE tokens are paid out for providing liquidity and these tokens can be used to farm tokens in limited Syrup pools.

It's pretty easy to use from within Trust Wallet and can also be easily used from a PC with the use of WalletConnect or Metamask. So, top points for ease of use... and a DARK THEME!

Fees for contract interaction are relatively low... on the order of 5-50 cents in BNB tokens. Quite often, the pools that pay out in BNB will actually use WBNB instead, which can be easily exchanged on the WBNB/BNB pair on PancakeSwap. Still, it is a bit annoying to have a Wrapped version of the native token on the BSC chain. I do wonder about the actual reasoning for that...

So, PancakeSwap for token conversion if you can't be bothered with market order books and want just a single easy transaction to convert and purchase assets. Same as Uniswap! However, they have a larger use case for their CAKE token in comparison to the Uniswap UNI token (which doesn't have much of a use case beyond governance at the moment). It's proving to be a viable and worthwhile alternative... more to come!

Beefy Finance

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Yet another meme-based DeFi protocol... with the liquidity provision being named "mooTokens". Sigh... hard to take seriously!

BeefyFinance serves as the BSC analog to YearnFinance. However, at the moment, I'm not really quite seeing the same flexibility and power that Yearn provides for the Ethereum blockchain. You can see that the Total Value Locked (TVL) is pretty small at around 17.5 million USD.

The vaults that you lock up assets in Beefy seem to be single protocol uses. So, locking up an asset means that it is deployed only on a single platform like PancakeSwap. For Yearn on Ethereum, your assets are constantly being shifted around to collect the best yield or interest across many platforms. Part of this is likely due to the smaller number of trustworthy projects, so it could be something that will develop over time... but at the moment, I'm not entirely sure that there is value in using Beefy over directly interacting with the underlying DeFi protocols.

Well... that's not totally true. There is the advantage that harvesting a claim on a particular LP or product will harvest it for everyone in the pool in exchange for a small (0.5 - 1 percent) of the total harvest. So, that does save everyone else BNB gas fees! Handy if you are a passive member of the protocols...

At the moment, I can't see the useage for the BEFI token... it appears to be only governance at the moment.



Venus is a Synethetix or Compound analog. By staking assets as collateral, you are able to mint VAI or borrow assets against your collateral. The XVS token is what originally got me interested in the Venus platform, as I harvested it as part of a Binance Launchpool for staking BNB. This gave me XVS tokens which I could stake on Venus as collateral or to use for governance voting.

It's a useful platform overcollateralized loans and liquidity providers, much in the same style as the Ethereum protocols that it emulates. I'm not really into borrowing assets, but I know that there is demand for that... I'm more than happy to provide assets for loan though, in exchange for interest.

So, more of a passive platform for my use case... which is good, as the contract interactions on Venus are significantly higher than those on the other two. On the order or 50-100 cents... sometimes more... which is still much lower than Ethereum!

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Trending again. I tell you, you are here most every day.

Phew! That is a big responsibility to write decent stuff then!

This is a super informative post. I like that Binance offers a robust tool from within its wallet, I haven't even figured out most of it not to talk of all.

Concerning cake, one can also stake TWT tokens I.e trust wallet tokens directly from Trust wallet to farm cake, its interesting....

There's still so much I'm yet ti discover in this Defi world, perhaps one step at a time.

But if at this time theres so much tools offered in this finance world, then the future must be super equipped and fun and abundant

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Yes, it's a good wallet and works mostly well. I have issues sometimes with lag, but other than that it is a great addition to the BSC ecosystem in addition to being a regular hot wallet for a whole bunch of crypto.

I think the TWT syrup pool is finished now, although there still is the LP. I'm not so keen on the paired asset pools as the impermanent losses can really hurt!

I really need dive more into defi but I just can't imagine getting into pancakes and sushi. 😄 Seems I need to give Binance a deeper look, the interface is super jam packed it just seems annoying compared to Bittrex but yeah, they have way more to offer on binance.

Yep, I really hate the project names! They are so hard to take seriously in an ecosystem that is already rife with scams and dodgy projects!

Binance is pretty overloaded with products, but in the end, you just use what you need. Better volume and selection (good and bad...) than Bittrex, savings and staking products are also useful as is the integration with their own contracts blockchain.

This an impressive and useful article. I want to learn more about Venus, and use the asset loan feature. I may be both a borrower there and lender, as I am interested in increasing my Bitcoin holdings. I will study it more.
Upvoted and reblogged.

Thus graphic is pretty cool...


Venus is an interesting decentralised loan platform, although I would hesitate to recommend it over the ones that CEXs like Binance and Kucoin already offer at the moment!

Kucoin and Binance already offer savings products that have very similar APR to the decentralised versions (and don't seem overinflated...), and in this early stage I trust them more than a project that is newish. Remember that when you use a decentralised loan/savings product that you also price in risk when viewing the APR. Higher APR is meaningless if you lose the entire capital!

I will have a better detailed review of each of the platforms when I've had a bit more time with them.

@ryivhnn did the graphic, I love it!

Bang, I did it again... I just rehived your post!
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