Stardate: Oct 2020.
Adventures in De-Fi and ‘Liquidity Mining’ on the Binance Smart Chain (BSC) using similar yield farming swap-shops PancakeSwap, BurgerSwap, BakerySwap and now FryWorld…
There’s a lot of cooking going on – and $CAKE-stacking – and it’s fascinating fun.
Where’s it headed? Will the kitchen’s catch fire? They might, but they don’t have to.
In discussing these platforms, with their somewhat complex token interactions, you need to know only one thing: the idea is to have a venue where you can swap as many BEP-2 tokens as possible, with anybody being liquidity providers, and earning a valuable token. Ie. potentially Binance-killing dexes.
Their native tokens attain value from what you can gain by staking it. Eg: the latest thing is the promise of rare NFTs for token holders, or earning some new token.
All this is still revolutionary. And there could be risks with smart contract coding and development teams. However, you need to read their Medium blogs, and get a sense yourself.
It helps if you go ahead and experiment, join a group and provide some liquidity.
Note: It’s easy to get going with Binance Smart Chain with your MetaMask browser extension. You need to add the network settings and you can switch between Ethereum and BSC.
Just remember: that Ethereum tokens become BEP-2 tokens there, so you need to keep them separate, use a bridge to change them, or pass through the main Binance exchange.
Drawback of BSC is it’s more centralised than Ethereum of course, but it’s faster (DPOS) and v. cheap to transact. It’s also more decentralised than the main Binance exchange, an admirable move to disrupt itself, while CZ presents a good aura of trust in what he’s saying about de-fi and the future.
We are all Liquidity Miners
Back to PancakeSwap, the most popular right now. I’m still getting my mind around these food-based Automated Market Makers. The aim is to get CAKE tokens. The price of these main [platform+governance] tokens have managed to maintain value for the most part.
They may all go to nothing and there is risk of ‘rug pulls’ but you can see how they are transferring value onto BSC. They might just be getting going, and even end up leading the way.
If just one of them can provide enough incentive, or they can provide different interest levels, then they may grow to become ‘uniswap’ of BSC – or mini-swapshops. Liquidity is needed out there, and will draw it off ce-fi and into de-fi.
The UNI token was not integral to what Uniswap continues to provide: a one-stop shop. Will a new BinanceSwap emerge to kill them, and Binance too? There is already a De-fi staking option on Binance, or Binance Earn which – may – retain users on the Ce-Fi platform, for now… until they get more curious of what’s happening on-chain….
For BurgerSwap etc, it’s all about listings, and the right balance of things. It’s about getting people involved in the governance easily and not selling out or shifting their liquidity onto something new and more attractive (and more risky).
You can vampire liquidity for so long, like Sushiswap demo’ed, but you’ll need to have a long-term alternative in place.
Right now, I like the speed of BSC farms, the attitude and innovations in the ‘launchpools’ to farm new projects. These are real incentives to keep farming.
So the Shift continues…
This Liquidity Mining malarkey is starting something. With this advent of ‘De-Fi’, including new tools and interface updates, what I’m feeling is the deeper urge to leave behind all centralised services and deal more directly with crypto. It’s not the recent KuCoin hack either, as we’ve been aware of this danger. You accept risks, like you accept smart contract ‘rug pull’ risks. You hope that projects move towards being completely community-governed. It may take time.
It’s just that, after a while, the truth is, in crypto, you get tired of dealing with secure log-ins and 2FA on ‘crypto banks’. Binance, Crypto.com, Nexo, Iconomi, whatever… You start wanting to skip all that; pull the rug on them instead… move into de-fi! It’s a more simple world, without hidden, company-led intentions and waiting times. What-You-See-is-What-You-Get.
So I’m starting to ‘evacuate’ my crypto off these esteemed venues and going ‘full de-fi’. I’m even looking into the Monolith payment card.
Yes, I may lose some gains, some interest rates, perks, pooled holdings and the latest shiny lock-ups, but this is the trade-off. Instead, I get peace of mind and accessibility. I control all my funds. I pay only blockchain network fees and can use dapps like Yearn.finance or the major players to give me a more secure APY for savings. I have no waiting times in Trust wallet besides the network. No-one is holding my crypto for me.
Obvious right? But we still have to use Coinbase or some fiat gateway, to an extent.
Ce-Fi has given much to crypto, but the shift continues. It’s what is not sustainable. It’s funny how Binance Smart Chain has come along at this time. It could do well for itself, and for BNB investors, (and providers).
Beyond these swap-shops, I think everyone knows who the bigger, more sustainable de-fi players are: Maker, Aave, Compound, Yearn… those on Ethereum (2). The BSC may have to disrupt itself a lot more for BNB prices to really rise.
However, these BSC food farms are providing a function(s), so for today, let the spice-crypto flow… Let’s see if their prices can remain stable, even grow, and prevent liquidity shifts, and not diversification. They could even incorporate Pickle.finance type tactics to keep themselves stable. They can play a part in distribution of new tokens….
Anything is possible. The teams and the communities are on the case.
Binance Smart Chain, with its EVM, is an open field. You heard it here first.
Price of CAKE = 0.413692 (euros)
Price of BAKE = 0.025404
Price of BURGER = 0.435125
Price of FRIES ?
Check into Yield Farming stats
[And don’t forget to get your Ade’s Press unofficial BurgerSwap NFT hodl badge here! Pure, unique crypto-art !]