I will not want to make a long post about this subject. It is more important to understand it and get it in your way.
Before starting everything - you should be aware of these terms: APR and APY.
APR - Annual Percentage Revenue - is the honest and simple term of how much do you gain in one year from an investment. That's it!
APY - Annual Percentage Yield - is getting also the compounding - meaning you (probably) will reach that % in gaining if you reinvest the interest received, day by day or how often is allowed (much complicated)
Also, please read here about what Liquidity Pool is, Automatic Market Makers and Impermanent Loss.
So, the first thing you should know: farming using Binance Smart Chain is live already and it's gaining traction!
why is that?
well, as like FARM team stated:
- Transaction costs are lower which means more net profit for farmers
- There is a constant influx of new farms with high yields
- Farming on BSC has a reduced profit share fee from 30% to 8%
And this is what could make ETH and all DEX-es that are working on ETH lose "clients" in favor of the younger but pragmatic centralized copycat named Binance Smart Chain.
What is CZ thinking?
Let's see - a lot of people got crazy with these Bull Market and DeFi high yields farming.
Do they care about centralization as long their money is on a platform and not in their pockets?
Then, why shouldn't I offer them the solution: the same working product, but cheaper in fees with the compromise of being centralized.
Would it work?
Until now - yes!!!
So, what smart farming platforms do? Adopt also BSC blockchain to keep their clients and even gather more.
Wise, isn't it?
If you cannot defeat somebody, make him your friend!
That's what Harvest Finance and I am sure others will do, soon!
this is the main screen on the platform reminded above:
You see the new Binance Smart Chain tab. You click it and you'll see the strategies available now:
In the bottom of the page you will same the amount of gas fees saved on this BSC. Impressive, in such a short time (few days only), isn't it?
Be sure, the newest one are always more attractive, because they want to grab new people as soon as possible. So, follow them, jump into (with a basic analysis, at least) and then move on when you see the rewards are decreasing.
The theory in this case is simple. How do we apply it to be more efficient?
Should we jump into the biggest yields possible? Or search for some checked already pools where everything is fine and we could expect of what we see on reward chapter?
Let's look on the money flow on Harvest.finance:
As you see, you will have more money because Harvest.finance is also making all the work, by selling over time the rewards to make a compounded earning. Also, the FARM stakers will receive a share from the total revenues, so I will not be surprised if FARM si going to double it's Market Cap.
But what about Binance Smart Chain strategies?
I wiil choose 3 types, regarding the risk: low, medium and high.
what can be less risky than choosing something where stable coins are involved?
at first, you should now that are 3 types (until now) of stable coins:
- 100% backed by FIAT deposits (USDC, BUSD, TUSD, etc)
- more than 100% backed by assets, like cryptocurrencies or real world assets (DAI, VAI, etc)
- non-backed coins - algorithmic stable coins - with variable supply - for decreasing or increasing the demand of that coin to assure a stable course vs USD or other standard asset (AMPL, BDO, etc)
Why am I telling this?
Because we have a BDO-BUSD Liquidity Pool on bDOLLAR platform, and you should know the risk of an algorithmic stable coin: to become an unstable one!
So, I will not recommend it here until time will pass and we will see the proof of their concept.
but if we don't have such a nice yield where I'm looking for, I will choose a constant pair of coins in their development: ETH and BNB. Both are great in their way - ETH is the most used blockchain now for dApps and this year would be a great turn for the project one Proof of Stake will be adopted, and BNB is quite innovative and quickly responsive to the market opportunities, will all that BSC and DEX-s created through them, etc
I took a pair from PancakeSwap platform to fulfill my needs.
So - this is my choice for the low risk investment - with the mention we calculate the value in crypto, not in FIAT, because hard times could come back and for a while, the value in USD could be lower than now.
For the medium risk,
I will choose an interesting pair - fVENUS with XVS, because this is a (still) low MarketCap project and we should benefit from the increase in value along with the interest we got from here.
Could be this the newest golden EGG of finance? Maybe, for the next few weeks - yes!
With the fantastic ratio given now, with this Max supply below 2 million, Goose DeFi could be a good way for multuplying your investment in the next weeks.
So, choose one of these EGG pairs and you could make a great choice nowadays.
That's it: low fees, interesting pairs and yields, what could be more attractive now?