I was listening to a podcast interview by Unchained of the well known on-chain Bitcoin analyst Willy Woo. While the bulk of the interview revolved around BTC toward the end they did touch on Ethereum and the DeFi sector and it's importance as a building block for the future financial systems.
In their discussion they mentioned where Ethereum sits in the current landscape and how there are a number of competitors out there. However, rather than seeing this as an arms race or platform war it sounded, to me, like there is growing acceptance of the DeFi solutions across multiple platforms.
It is true the DeFi ecosystem surrounding Ethereum is more mature than a lot of other chains. However, as highlighted in the interview, the recent ruling in favour of stablecoins and public blockchains as financial vehicles, and the validation of other chains due the move by some stablecoins to make them available across multiple platforms, means that most of these other solutions are 1 degree of separation from our currently personal banking system. That is to say, if we can convert our dollar in the bank to a digital dollar on the respective chain (easily done with big exchanges like Binance offering Fiat/Stable pairs and different withdrawal methods) then we can can interact with other DeFi solutions out there in the cryptosphere.
In this article we're going to look at one such alternative to the Ethereum DeFi ecosystem and go through some of the highlights of this system that I've found so far and useful platforms to take a look at. Welcome....to the Binance Smart Chain (BSC).
So as with most crypto-fiends I was happy to jump onboard the DeFi freight train when it started to pull out of the station. What started with the initial liquidly mining programs bloomed into a full-on system with an abundance options. Some of the most notable projects to rise up through the ranks were of course the likes of (but not limited to):
However, over recent months the DeFi systems (which in theory was supposed to lower entry barriers to finance) seem to have moved to a prohibitively high priced model due the run away gas prices. Indeed, recently it has felt like DeFi is something only for the rich elite (oh how far you have fallen crytpocurrency....you were supposed to be the equalizer). However, because there is no stopping innovation, not all is lost. Just a few months ago the the Binance Smart Chain was a relatively quiet affair in the DeFi space. Sure the possibility was there but with everyone so wrapped up in the Ethereum DeFi boom there was not much going on elsewhere. Since then the landscape has changed drastically. Looking at the chart below we can see just how much traction and momentum BSC projects are gaining (I lifted this from twitter just last week).
See those cute looking bunny ears? Those are the tell-tale logo for PancakeSwap one of the flagship platforms on BSC. If you've been following @PVMihalache you'll know that he keeps us updated on the crossover/support between Binance's BNB staking LaunchPools. With a goliath like Binance giving these new tokens a platform to reach an audience it is no wonder that this space has begun to grow so rapidly. So just how much can we do currently on the BSC? Well take a look at this:
Now that is a lot of options and is starting to look like a well rounded space to give even Ethereum a run for its money! It is impossible in this article for us to go into detail on all of these so let's take a dive into the few key solutions that have stood out to me and that I've recently been making use of.
- Algorithmic Stablecoins - Ditto Money - https://ditto.money/
- Liquidity and Exchange - PancakeSwap - https://pancakeswap.finance/
- Yield Optimizer - Beefy.Finance - https://beefy.finance/
- Infrastructure - YieldWatch.net - https://www.yieldwatch.net/
- Wallet - Trust Wallet (honorable mention) - https://trustwallet.com/
So if you've been following Publish0x's Ampleforth writing competition (check out the basics here: Ampleforth (AMPL) Educator's Pack) you may be aware of elastic supply tokens. Well, it wasn't long before someone took this idea and applied it to the BSC. This time around it is called Ditto.
Ditto was actually based predominantly on AMPL but with the following key difference:
- Negative rebases are amplified to make Ditto return into positive rebase territory faster.
- Rebases can also be triggered up to 6 times per day, resulting in a token that maintains its peg very efficiently.
- The goal appears to be to maintain a $1 peg. Which is a little different form AMPL, which is pegged to buying power of the dollar in 2019
In addition to the underlying mechanics the Ditto team also released an incentivized LP providing program a little like Geyser offered by Ampleforth (in fact I think they reused the code!).
This program offers three rewards for providing liquidity (on top of any earnings for providing liquidity itself). The rewards are Ditto, Cake and (if you stick with it to the end of the program) BNB for your trouble (which helps to offset any impermanent loss incurred). Not a bad combo!!
Since we've looked at liquidity let's see how we actually provide it. Similar in some respects to UniSwap on Ethereum the main liquidity provider and swapping solution on BSC is PancakeSwap (I've you've never heard of it then you probably don't follow any crypto person(s) on Twitter!!).
As you can see the layout is very similar to Uniswap except with a few added items. We'll look at a couple below but it is worth noting that there is a bridge option which takes you to the Binance Smart Bridge allowing us to transfer tokens across platforms to get access to them on to the BSC chain....nifty I know.
Liquidity providers can stake their LP tokens directly with PancakeSwap to get rewards. This is a nice addition as it means you almost have a 1-stop-shop to make the most of the platform.
Finally they have the syrup pools that allow you to stake your Cake (earned or bought) and then earn another token or even more Cake!! This thing has layers!!!
After looking at providing liquidity we've seen that it is possible to earn by staking the LP token. However, how do we know that we're getting the best on-market deals? Don't have a cow, man.....Beefy.Finance has your back!
Beefy is relatively straight forward to use, think of it as a BSC iteration of Yield or Harvest.Finance. They offer ways to find the best rates on the market and I believe the rewards are auto compounding.
Look at that Total value locked in......22.87 million dollars is nothing to be sniffed at!
So if like me the one thing that you feel that can be lacking with all these options is a Zapper equivalent solution, some way of managing your books and keeping tabs on your investments then look no further. *queue music and slow-motion run down the beach*, YieldWatch to the rescue!
This is a simple process of using your wallet address to keep tabs on your portfolio. Just enter the BSC address into the site and you're watching it. As you can see above it shows my PancakeSwap LP farming pool as well as Beefy deposits. One of the bonus items though is that little "i" next to the LP Staking tokens. This shows you how you are doing relative to initial investment and helps you track impermanent loss...well played YeildWatch, great addition!
Just a quick honorable mention for wallets. I prefer TrustWallet with the built in Binance Dex as well as for the bowser for interacting with the above dApps. It is a tidy interface which has never let me down. If you want to learn more check out this article: Trust Wallet: A Whistle Stop Tour.
As you can see from the list of options on the Binance Smart Chain this area is booming right now. The reduced gas prices and increased exposure from PancakeSwap and Binance is driving a fast paced eco-system that it is fun to get stuck into. It should go without saying that I'm not endorsing any of the products above and that it is critical to do your own research on projects over there scam and contract-flaws are just as much a reality on the BSC as on the Ethereum chain.
Risks aside it is nice to not be prohibited from trying out platforms by unacceptable fees. If you are aware of any other projects that you think are worthy a mention please add them to the comments section below. For now though I urge you to go explore the BSC and get following some of these groups on twitter, it is good to stay up to date with what is going on.
Thank you very much for reading, have fun DeFi-ing and being part of the revolution. Good Luck y'all!