Defi on Binance Chain and BSC (CeDefi) (last updated Sept 26/2020)

Defi on Binance Chain and BSC (CeDefi) (last updated Sept 26/2020)

By fblauer | Yield Hacking with Defi | 16 Sep 2020


Introduction

There is nothing in the crypto domain that compares to the breadth and depth of the Binance ecosystem. They have products and services which comprise both centralised and decentralized finance (and exchanges). Their closest competition in this space is probably Coinbase, who doesn't even come close when it comes to the vast number of services.

The original Binance chain is optimised for exchanging digital assets, and hosts the main centralised exchange and the Binance DEX. The new Binance smart chain adds smart contracts and dapps. They are integrated thru BEP2 to BEP20 transfers as per the below diagram:

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For the purposes of this post, I will start off discussing the major BSC Defi dapps, and then get into the Cedefi financial services on binance.com. Here is a good overview video, for BSC if you have about 10 minutes. For further info, this article is a good summary

Binance Smart Chain dapps:

These dapps are pretty new, but already showing a lot of promise, and rapidly gaining in popularity. It is relatively easy to port apps over from Ethereum (EVM compatable), it can also be used with Metamask, and its much faster and cheaper than Ethereum. It also supports the major coins from other chains thru Bep20 wrapping. This system doesn't require KYC and AML compliance, like the centralised exchange (Binance.com). So, they support both type of financial environments, which is an advantage for transition from the traditional system. 

  • Cream Finance - Similar in function to Compound, it operates the same way as the ethereum version, but also has coins from other chains like Eth, Dot, Link, BTC etc. It also has yield farming rewards (Cream token) for an initial period, to incentivise providing liquidity. But its much faster and cheaper then the eth version. 

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  • Fortube Defi lending/borrowing platform - based on the force protocol, this dapp runs on BSC, as well as Ethereum. I have been testing it and the rates are very good for Eth, Dai, BNB (around 50% which includes farming yields, similar to the vaults in yearn (on the eth platform). Different coins are supported on the BSC version and the gas fees are lower, but otherwise, I expect it to operate in a similar way. However some functions, like the liquidity mining of eth:for pair still has to be done on the eth platform, as well as the staking of the resulting Uni token for rewards in their "FOR" token. 

I am just in the process of doing my due diligence, but they have some impressive partners, and their defi platform looks very interesting. 

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Similar to the clone of YFI (yearn.finance) that runs on eth. I didnt see any formal announcement of BSC support, but it seems to work. Different coins are supported on the 2 platforms:

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Burgerswap just added a great new feature to bridge ERC20 tokens from ethereum, to BSC/Bep20 and back. I tried transferring eth over and it created a wrapped bWeth coin, which I could easily swap to any token that is supported by burgerswap. If it isn't, you can transfer it, but you have to list it on burgerswap yourself, and provide liquidity. But you will get a share of the swapping fees for that pool. 

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  • BSCswap - fork of Uniswap on BSC
  • Swap Tuna - Similar to Sushiswap, but faster and cheaper on BSC. Live, but in the early stages. Can be used for swapping and providing liquidity in the pools (alternative to Burgerswap)
  • Bakeryswap - Yet another AMM DEX on BSC, with farming rewards
  • Spartan Pools - One of the first projects to migrate from Binance chain (BEP2) to Binance smart chain (BEP20) and they provide some good guides and documentation. They are community based system for derivatives (synthetic assets), similar to Synthetix on Eth, and have a program for incentivising liquidity. They also plan to provide other Defi services. 
  • Bidao - this is similar to maker/dai on BSC. Instead their coins will be Bid/bai on BSC. But it is not live yet. 
  • BscScan - fork of etherscan. Same UI and function

Binance.com Finance

This is the venerable, arguably the largest and best centralised exchange in the world, with fiat onramps, and adding a lot of banking and financial activities. They are also fully regulated and legally compliant with the various jurisdictions around the world. 

Binance.com also helps to serve the role of cross chain hub (albeit centralised), by allowing you to transfer coins across chains, and also convert Ethereum assets from ERC20, which is the most widely used standard in the work for tokens to BEP20, so that they can run on the Binance smart chain.

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Here are some of the Cedefi financial services that they have added

  • Savings (interest bearing)

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Included in the est. APY are yield farming rewards in another token that they are promoting called BEL (Bella protocol). Here is more detail on Binance launchpool. (CeDefi product)

  • Staking support for POS chains

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  • Liquid Swap (Liquidity mining for yield farming) similar to Uniswap/Sushiswap (Cedefi version of above BSC dapps)

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They also have a limited swap function for stablecoins, similar to Curve.fi and Uniswap

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  • Binance smart mining pools (proof of work mining)

"Introduction for Binance Smart POW mining Pool - Smart Pool is a service that enables the user to get higher profit by auto-switching hash rate to mine different currencies with the same algorithm. Binance Smart Pool is supporting the SHA256 algorithm and the hash rate of users can be switched among BTC, BCH, and BSV automatically. The final mining income is settled in BTC. "

  • Loans

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Binance.org Dex (Bep2) and Trust wallet

This additional exchange fits between the main centralised exchange and the community smart contract type of dapp DEX. This CeDefi Dex has a lot of trading pairs, with cross chain capabilities, and the integration with the mobile trust wallet. But it doesn't have a lot of adoption, and I personally don't have much use for it.  The smart contract dapps have become more mature, and its relatively easy to add more trading pairs (first on Eth, then will come to BSC). I wouldn't be surprised if it gets phased out eventually, unless they find some other good use for it in the future. 

Conclusion

There is so much going on here, that its hard to get an appreciation for everything that they have accomplished, and are in the process of building. They are expanding at a rapid pace. Some people have a problem with the centralised aspect of their services.  But most people still trade on their centralised exchange, which is probably the largest and most successful in the world for various reasons. They still have the most trading pairs from different blockchains, deep liquidity, margin trading, futures, derivatives, fiat onramps, and visa credit card for spending crypto. They have services suited for large institutional traders, as well as small retail ones. They have demonstrated that they deserve to be trusted, and that is what most people are used to in the traditional financial system. Some people still prefer a regulated, legally compliant system, and are willing to do KYC and AML. 

The only thing that I was really missing was a killer monitoring tool like zapper.fi. But I guess that will come with time and increased adoption. For now, I keep track of this manually on the portfolio page of coingecko. 

It might turn out that Cedefi will be the best way to transition to more decentralisation over time. Binance has shown that they will support what the people want, and they are very customer driven. They have very good documentation, and centralised technical support, which is still something that most people prefer over telegram forums for solving problems. 

Lastly, if you find my blog posts on defi useful, and you decide to sign up with Binance, please use my referral link: https://www.binance.com/en/register?ref=NLYCWLO1 If you use this link to sign up for binance.com, you will get a 10% discount on trading fees on the centralised exchange, and some of their services. 


fblauer
fblauer

Self styled crypto enthusiast. Unbank yourself


Yield Hacking with Defi
Yield Hacking with Defi

This is a blog about the intersection between crypto currency and finance. I have been testing and evaluating various defi (decentralised finance) and opfi (open finance) projects. This includes lending and borrowing markets, decentralised exchanges, automated market making, smart contract wallets, and tools for measuring and monitoring return on investment. All enabled by blockchain technology, with decentralised, opensource and audited smart contracts. These systems are interoperable and composable.

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