Nobody wants to sign up for an online casino that is not safe and secure. With hundreds, potentially thousands of casinos out there to choose from, why take a risk? While the rules governing licensing and regulation in conventional online casinos are straightforward, it is sometimes less so for cryptocurrency casinos. What kinds of things should you be looking for? Join us as we explore the types of regulation you should expect to see in cryptocurrency casinos in 2021.
A Gambling License
Of course, not all cryptocurrencies are licensed, but they should be. While cryptocurrency sites struggle to obtain licenses from the UKGC or MGA, the Government of Curacao’s gambling licensing authority is prepared to license top domains like Bitcoin Casino. While a Curacao license legally allows you to offer crypto games to players, it does not come with much regulation, though. For that, we need to look elsewhere.
Top casinos like Bitcoin Casino will also be regulated. As mentioned, a Curacao license brings some but nowhere near as much regulation as a typical UKGC or MGA license. Therefore, we need to look further afield. Top sites such as BitcoinCasino.io are instead regulated by third-party auditors. These ensure that the casino is honest, transparent and has fair practices regarding security, fair play, and player protection. Do not trust cryptocurrency casinos that claim to regulate themselves.
On top of the above items, a reputable cryptocurrency casino should also be RNG certified. This entails having its games checked to ensure that they have fair RTP (return to player) rates and that the random number generators that govern each hand or spin are truly delivering random events. RNG certificates come from iTech Labs, TST, eCOGRA, Provably Fair (specific to Bitcoin casinos) and others.
Financial Authority Approval
Access to Responsible Gambling Programs
It is not just regulation and licensing that you need to see at top crypto casinos. The best Bitcoin betting sites will also offer player protection. Most of the time, this comes in the form of responsible gambling tools. In short, a renowned site should provide you with the ability to cap what you deposit, to withdrawal without limits, and to self-exclude or take breaks from gameplay whenever it suits you. They should also be affiliated with problem gambling programs that can provide additional support to troubled gamblers.
It may sound like a lot to ask for in a cryptocurrency casino, but it is not. The absolute best sites can put together a package that features all the above, and it is at these crypto casinos that you want to sign up and play.
Despite its lower profitability compared to Ethereum (ETH), Ethereum Classic (ETC) mining attracts farm owners. The lower mining complexity and the information that Vitalik Buterin decided to remove the PoW mining option for Ethereum make miners pay attention to the promising coin. Let’s understand what you need to mine Ethereum Classic and consider the technical nuances of mining this cryptocurrency.
Features of the ETC coin
Ethereum Classic (ETC) is not just digital money, but a platform for running decentralized applications (dApp). ETC and ETH coins appeared in the spring of 2016 after the hardfork of the popular Ethereum cryptocurrency. It was made after a blockchain hack in which hackers managed to steal more than $50 million. Some users did not support the rollback of the blockchain, which the developers decided to apply to eliminate the consequences of the attack. Proponents of the conservative approach continued to use the old blockchain, from which the ETH branch broke off.
ETC and ETH mining applications use the same mining algorithm and work with the same hardware. The only difference is that Ethereum Classic has a smaller DAG file and can be mined on video cards with up to 3 GB of RAM.
Despite its lower price and popularity than Ethereum, ETC has certain advantages:
The principle of code supremacy underlying Ethereum Classic guarantees the inviolability of the ETC blockchain and ensures the decentralized operation of the network.
The project’s open source code, which allows enthusiasts to develop ETC and create their own applications on its platform.
Good feedback, ensuring upgrades based on consolidated decisions of the community and the three development teams,
High block closing speed, providing a faster network performance compared to BTC and ETH.
Ability to mine ETCs on video cards weaker than those required to mine ETH.
The disadvantages of Ethereum Classic include the following points:
Low activity of the development team.
Vulnerability to “51% attack”, typical for PoW algorithms.
Using a blockchain that was successfully attacked in 2016
How to mine Ethereum Classic
To mine ETCs you need equipment: an ASIC, a computer with a powerful video card or a farm with a lot of video cards that will provide a high profit margin. You will also need special software and a wallet to withdraw and store the earnings.
Ethereum Classic, like Ethereum, can be mined through a pool or in solo mode. However, solo ETC mining is not profitable. To increase efficiency, miners work through pools that distribute the task of calculating block signatures. This allows for stable profits and increases the profitability of each participant’s farm.
The profit made by mining Ethereum Classic as part of a group (pool) depends on its characteristics. Each pool has its own commission, but you should not focus only on this parameter. It is better to determine the profitability by experience. To do this you need to connect to several pools for the same period of time (at least 12 hours) and evaluate the profitability of the farm.
You should pay attention to the following pools that support ETC mining:
Ethermine is one of the first pools, characterized by high reliability. However, on the web there are mixed comments about the profitability of the resource.
Nanopool is a relatively new project, which managed to get ahead of the competition in a short time. The pool is characterized by low commissions and favorable terms for cooperation. However, the technical support of the site leaves much to be desired.
P2pool is a pool with high profitability and support of ETC mining in solo mode.
ETC 2miners is a new resource that supports a large number of cryptocurrencies. Thanks to the low commission and high reliability of work, the site since its opening in 2017 has managed to win a large number of fans,
Supernova – a well-known resource, distinguished by a high degree of security, user-friendly interface and excellent technical support.
MinerGate is a convenient, reliable multilingual resource for mining cryptocurrencies, which managed to win the trust of the community.
Equipment for mining Ethereum Classic
Not only ASIC or top-of-the-line video cards can be used for ETC mining. The main thing is that a DAG file of over 2 gigabytes can fit into the GPU’s RAM. However, older graphics cards have low power efficiency (ratio of performance to power consumption). Coins mined on such devices may not even be enough to pay for electricity. This also applies to attempts to mine ETC on a CPU.
Ether is being mined on AMD and Nvidia video cards. However, mining on Nvidia, such as Geforce GTX 1050 Ti, brings less income for equal investment. The reason lies in the different architecture of the GPU, which affects the power consumption. Therefore, it is preferable to use AMD cards of the latest generation for ether mining.
Where to Store Coins
To store ETC coins, you can use software and hardware wallets, accounts on cryptocurrency exchanges.
If you intend to accumulate significant amounts of Ethereum Classic, it is worth looking at hardware devices (Trezor, Ledger Nano S and similar). Web wallets are less reliable, but much more convenient for withdrawals, exchanging cryptocurrencies for fiat money and conducting quick transactions. An example is Etcwallet.net. This service is extremely easy to use, and it takes literally seconds to start working with it.
Technical nuances and mining software
Setting up ETC mining starts with choosing an application to work with the pool. The most popular program for mining Ethereum Classic is Claymore.
To configure the settings, unzip the miner file and edit Start.bat. In the latter you need to specify the pool IP and port, as well as the Ethereum wallet address you want to output the coins to. After that, run the file and start mining Ethereum.
The initialization parameters are available in the corresponding section of the mining pool website. There are also links to recommended miner programs.
What is a Claymore S Dual Miner
The Ethereum Classic S Dual Miner allows you to effectively use the capabilities of your video card and mine not only ETCs. Dual mining allows you to mine coins using two different algorithms simultaneously. Together with ETC, whose hash calculation loads the RAM of the video card, you can mine Decred or other processor-intensive GPU coins. This increases the profitability of mining with a small increase in power consumption.
Claymore DuaL is considered the best miner for regular and dual-mining.
Pros of the application (utility):
simple user-friendly interface,
mixed support for farms (with AMD and Nvidia cards),
Linux and Windows versions.
Cons of ether dual-miner:
the program does not work on 32-bit OS,
Some of the video card resources are spent on secondary coin, slightly reducing ETC hashrate.
Why do we need the bat-file?
Start.bat is used to start an application and it contains the parameters of its work. Their priority will be higher than that of the options prescribed in config.txt. So the easiest way to configure the program is to create a bat-file and put in it the key information about the wallet and the pool server.
ETC mining profitability depends on the following parameters:
mining speed (hash rate),
Power consumption of the farm,
channel reliability (if the connection is unstable, the calculated hashes can be lost).
To calculate the profitability of Ethereum mining equipment in advance, it is worth using online mining calculators. The most authoritative one is whattomine.com, which allows calculating a farm’s profit based on its hash rate and equipment power consumption.
This is a guide on how to buy ICP Token from Dfinity, dubbed the Internet Computer. After a wait of half a decade, Dfinity is releasing a public launch of its network and also its ICP token which powers the internet computer. The genesis launch took place on May 7th 2021. ICP is expected to start trading on May 10th 20211 at 10am PT. Therefore, you should be able to buy ICP tokens starting this date. ICP stands for Internet Computer Protocol.
Since I am getting a lot of questions on this, the only legitimate place to buy ICP right now (pre-launch) is FTX which supports ICP perpetual futures contract. This is the most liquid with best price discovery by far (not the IOU from MXC). Sign up and trade on FTX if you want exposure to ICP pre-launch. No KYC for up to 2000 USD withdraw per day. VPN friendly. Don’t buy MXC stuff. Otherwise, just wait for regular exchanges (see below)
But first, let’s dive deeper into Dfinity, its vision, and how to relates to the broader blockchain and crypto ecosystem.
What is Dfinity?
Dfinity has been building an “Internet Computer” since 2016-2017 and has raised several billion dollars from VCs like A16Z in the process. It has several unique features such as how nodes come to a consensus and how data is treated inside the network. We suggest doing some reading on their blog as the details are hard to summarize. If Dfinity can do 10% of all it promises, it could be a game-changer.
Dfinity hopes that popular apps like Facebook and TikTok will be recreated on a decentralized network and the Internet Computer is ready to handle any load. It is far easier for developers to manage since compute and storage are managed in a single place and scaled by the Internet Computer, which means the developers don’t need to manage things like databases, firewalls, load balancers, etc.
What is ICP Token?
The ICP token is the native token of Dfinity. You can stake the ICP token for governance and collect fees. This isn’t a gimmick like several other governance tokens. Besides, you’ll be rewarded the more the network is successful, which aligns the interests of token holders and network users and builders well.
In addition, Dfinity did a broad community “airdrop” via CoinList in 2018. Those users get 1.25% of the entire network. Every participant here would have 119 ICP in their CoinList account. CoinList is well known to mess up big launches and we don’t expect the ICP launch to be any different. Therefore, expect some early troubles.
In addition to the crowdsale, Dfinity has raised several billion dollars from some of the most prominent venture capitalists in Silicon Valley, most notably A16Z. A16Z has led multiple successive rounds for Dfinity over the years, which proves their deep conviction in the project (in addition to providing a way to deploy their hundreds of millions of dollars in a single shot).
That in a nutshell is how ICP will be distributed prior to the launch.
What are ICP’s Tokenomics
ICP (previously DFN at crowdsale) is both a governance and utility token inside the Internet Computer ecosystem. Therefore, if you are a developer who wants to build on Dfinity’s Internet Computer, then you will buy some ICP and convert them into cycles. This is somewhat analogous to how gas works in Ethereum i.e. you need to pay for compute using the native token.
However, if you want an upside in network ownership instead, you will lock up your ICP into what is called “Network Nervous System” (previously blockchain nervous system) or NNP. This creates “neurons” that can then be used for network governance. Governance actions will earn voting rewards inside the network.
Therefore, there are two inflation sources:
Paying nodes for compute (data centers for example)
Paying governance participants
and there is one deflation sink:
Burning ICP when it is converted into cycles by app developers
Voting rewards are higher for higher lockups. There is a complicated governance system via NNS which we’ll cover in more detail in a later post. App developers will need to know how to buy ICP tokens to make sure their apps are functioning right. This creates a continuous demand for ICP token. Depending on the usage, ICP could end up deflationary which would be a first in the space (other than possibly Ethereum’s EIP 1559 being adopted and gas remaining high).
Node operators get ICP payments but denominated in “cash equivalent” units. This is understandable because node operators have fixed hardware costs determined in USD or local fiat equivalent, not in ICP. Voting rewards are denominated in ICP though since these are longer term stakeholders of the project.
ICP inflation for governance starts at 10% of total supply and drops to 5% of total supply by Year-8. There is no information on inflation numbers for data center rewards yet.
How to Buy ICP Token from Dfinity
ICP has been released. The previous holders of DFN tokens via the seed round can access their ICP by following the instructions in this post. Airdrop recipients via CoinList will receive their ICP drop vested equally over 12 months.
Coinbase is listing ICP token at launch. This is probably the simplest way to buy ICP at launch. This of course was not the least bit surprising since A16Z is one of the largest investors in both Coinbase ($COIN) and Dfinity ($ICP). Note that after you sign up for Coinbase, you’ll need to log into Coinbase Pro in order to start trading ICP. It is expected that regular Coinbase users can buy ICP in the future, but the launch is on Coinbase Pro.
You can buy ICP futures on FTX which is the easiest and most liquid way to get leveraged exposure to ICP at launch. FTX’s perpetual futures are the simplest way to leverage up your ICP exposure. They are far more reliable for futures trading than Binance. You can leverage up to 100x, but please don’t do that unless you really know what you are doing. Keep it at a more modest 2-10x.
OKEx has announced it will list ICP token at launch (and also a $10MM fund to support the ICP ecosystem)
Kucoin will also be trading ICP at launch, with ICP/BTC and ICP/USDT pairs.
Binance is expected to list ICP soon after launch.
CoinList, which hosted the 1.25% community airdrop in 2018, is also expected to launch ICP trading. However, due to their poor ability to handle loads combined with poor liquidity and poor user experience and hard to complete KYC requirements, we suggest using other exchanges to trade ICP. If you are an airdrop participant though, you will need to go through CoinList to get your ICP. If you want to sell your ICP, it may be better to transfer it out to another exchange and then sell for BTC or USDT/USDC or another supported pair.
A bunch of smaller exchanges might list ICP after launch too. We’ll update the post over time to include them.
Warning: Be aware that ICP is not an ERC20 token and therefore does not exist on Ethereum. It is the native currency of the Internet Computer by Dfinity. Expect a bunch of scam ERC20s to launch on Uniswap. Don’t fall for them and stay safe out there.
Dfinity ICP Circulating Supply
The ICP circulating supply is a bit of a complex topic. This is because not all ICP is tradable in the markets. There is a lockup of ICPs in the form of neurons, and there is a “dissolve delay” before which ICP from these neurons can be obtained by a user in their wallet to sell on the markets. This mechanism is a bit different from other lock/stake protocols.
At genesis, the ICP token supply is expected to be 469,213,710 ICP i.e. about 469 million ICP. Circulating supply will depend on network conditions and economics, but is around 26% i.e. around 122 million ICP.
Not all of this is going to be liquid, however. The team has not been upfront about how many will be locked up in neurons and what the dissolve delay will be set at and whether the seed and institutional investors will get one neuron per entity or multiple. Therefore, there are a lot of questions about liquid and circulating ICP supply at launch that the team has failed to answer adequately. We’ll update this post when we get more details from the team about initial circulating supply numbers.
How to Earn ICP
The easiest way for everyday users to earn ICP is via voting rewards. If you run specialized data centers and willing to invest in dedicated hardware, that may be the better route to go. However, unlike other protocols like Filecoin, you cannot just contribute compute to Dfinity’s internet computer. Governance will need to approve every data center added to the network.
Therefore, for most users, voting (governance) is the way to earn ICP. Make sure to set the rules to delegate your votes so you don’t miss out on any rewards.
You can earn ICP by locking up your existing ICP into “neurons”. This is part of the “network nervous system” or NNS that forms the backbone of Dfinity’s internet computer.
In order to maximize your ICP returns, you should
Ensure that you are voting directly or in a delegated manner for every single vote.
Neurons lock up ICP. The more ICP you have locked up into your neuron, the more ICP your neuron will earn.
Dissolve Delay is like lockup. This can be set from 6 months to 8 years to earn governance rewards. If you set this to a maximum of 8 years, you get 2x the rewards compared to 6 months.
Age of neurons matter. Older neurons earn more ICP with a maximum of 25% bonus capped after 4 years.
Therefore, if you have a 4 year old neuron with 8 years dissolve delay, you will earn 2.5x more ICP than a neuron that was just created with a 6 month dissolve delay.
Dfinity makes it easier to compound. The network sends rewards to users in the form of new neurons. These neurons start with a dissolve delay of 1 day. You can therefore dissolve them immediately or simply increase the dissolve delay for your ‘child’ neurons. This is an easy way to compound your ICP to earn even more ICP but of course at the cost of reduced liquidity. Also note that neurons will not be tradable as trading them has security implications for the network.
Note: If you trigger to dissolve a neuron, when the delay is below 6 months, you will stop earning ICP tokens.
If you want to watch the event live, register for the Dfinity mercury genesis launch event, including details on ICP token and when it unlocks. Event takes place 7pm CET / 10am PT on Friday, 7th of May 2021. ICP token will be released at 9am PT on Monday, 10th May 2021.
If you were a seed investor in Dfinity, here is a guide on how to access your ICP (warning: technically challenging. The team made it very hard for seed investors to access their neurons and ICP by not integrating with the app and instead using command line tools).
ICP and Dfinity Resources
The Dfinity blog is fairly comprehensive – we suggest giving it a read.
This is a guide on how to buy BANK token from Float Protocol and diving deeper into how Float works, what the protocol is trying to accomplish and the role of BANK token in the ecosystem.
What is Float Protocol?
Float protocol is a new “stablecoin” protocol except it is trying to be a crypto-native unit of account with low volatility as opposed to a traditional stablecoin like DAI that wants to be pegged to the USD. The token that does this is FLOAT. The advantage of a crypto-native denomination is that with minimal day to day fluctuations, the FLOAT token can become the default unit of account in the space while retaining some upside as the crypto market rises. An additional benefit is to reduce the risk of the US government clamping down on traditional stablecoins. In that scenario, an independent unit of account unpegged to the USD would be very valuable.
For the Float Protocol to accomplish its goals, it needs the BANK token to absorb some of the upside and downside volatility as the crypto markets see-saw. BANK is also the governance token of the protocol. Therefore if you are bullish on Float, then buy BANK and not FLOAT. The comparison here would be that BANK is similar to MKR and FLOAT to DAI.
It belongs in a category that several other projects are building too, notably RAI and FEI. However, Float Protocol seems to have several advantages such as a team that has delivered to date and a fair launch of the BANK token with really active community of holders and voters.
Float is also notable in creating a very fair initial token launch that rewarded active Ethereum protocol users as opposed to Whales. During the initial Phase-1 mining of BANK token, the team implemented a whitelist of addresses that previously participated in governance of other protocols. In addition, each address could stake at most $30k. This created a huge number of early satisfied users who have continued to remain active. Float has seen some of the most active governance participation rate in the entire DeFi ecosystem, which is a huge plus for it going forward especially compared to some VC coins. This has been instrumental in its steady rise in value since launch.
Step-3: Accept the confirmation on MetaMask and wait for the transaction to get mined
Note: If you are paying with ETH, you can also directly go to the Sushi exchange to buy BANK. Currently, the Sushi pool is incentivized and not Uniswap, so although Uniswap also trades BANK, you are better off trading via 1inch to get the best order routing across all DeFi exchanges.
At the moment, BANK has a yield farming operation via the BANK/ETH LP on Sushi. This can earn you some BANK by being a liquidity provider for BANK with ETH on Uniswap. In order to participate, you will need to add liquidity to the existing BANK/ETH Uniswap pool. This will give you the UNI-LP tokens for this pool. Stake them here to start earning BANK.
This is a guide on how to buy AlchemistCoin before the official release.
As you probably know, this crypto season DeFi is the hottest thing in town, and then NFTs arrived as hotter still. Everyone from Bloomberg to New York Times is writing about NFTs.
So naturally, as with all things crypto, the next biggest thing is to combine NFTs and DeFi in an ever exploding hype cycle while taking advantage of the market. Welcome to crypto 2021.
One of the hotter such projects is the AlchemistCoin. Speculation abounds on VC interest and connections to Paradigm. We are not interested to write about that, but we’ll help you buy the token if you’re not deterred by the above aka a true degen.
What is the AlchemistCoin?
The AlchemistCoin is a new way to yield farm. It is a way to provide LP tokens to get an NFT that you can then use to stake multiple LP tokens. This provides for a more flexible paradigm for yield farmers.
It actually has nothing to do with gaming or art NFTs that are hot, but in this hype, does it even matter? It combines NFTs and DeFi. This is its current chart –
The token hasn’t been widely released to the public and even sites like CoinGecko don’t currently have it listed. Their website isn’t even live at the moment. We’ll try and update the article with more information as it comes out.
How to Buy AlchemistCoin
Step-1: Go to 1inch and select your token to convert to ETH. Alternately, you can get ETH from centralized exchanges like Binance and Coinbase. If you already have ETH, skip to Step-2.
Step-2: Go to Uniswap app to buy AlchemistCoin with your ETH (direct link).
Step-3: Connect your Web3 wallet and finish the trade. Make sure to set a reasonable slippage threshold.
In case you’re starting from BTC or other non-Ethereum based tokens like Litecoin, use Binance to convert to ETH first, then withdraw to your Web3 wallet like MetaMask. Then use that ETH to participate in the DeFi ecosystem. Learn how to buy fractions of Ether.
Make sure you buy the right token since this is not yet listed on places like CoinGecko. This is the Etherscan link to the token. This is the Uniswap info page.
This is a guide on how to yield farm on BSC and an overview of DeFi on BSC. BSC, or Binance Smart Contract Chain is a new blockchain from Binance that is smart contract enabled and is compatible with EVM among other things, making it easier for Ethereum app developers to move to. It has seen a dramatic rise in usage and popularity among crypto users of late.
A lot of this interest is due to the fact that Ethereum gas prices have become really high.
A simple borrow from AAVE could set you back by $200 or more even if you are willing to wait for several hours for the transactions to complete. This is not sustainable for the small users. Even if you have a million dollar portfolio, and assuming you invest 1% of your portfolio i.e. 10,000 USD into a position, getting in and out and harvesting your yield farming assets could easily eat up 2-5% of the position size, a significant amount.
Unsurprisingly, users are looking for an easy way out of this. DeFi seems to be the first to make the move in a big way. DeFi on BSC has been increasing at an exponential rate, along with the price of BNB over the last week.
As an amazing milestone, it seems that Pancakeswap on BSC overtook Uniswap on ETH volumes. Some volume could be manipulated, but this is still a mind blowing milestone that most people in crypto would never have imagined even a month ago.
Obviously, the DeFi on BSC ecosystem is not as mature and well developed as Ethereum, but lots of users are moving to BSC in search of low fees and alpha.
BSC vs. ETH – Pros and Cons
Let’s be very clear – most current DeFi on BSC projects are copycats of similar projects on Ethereum. However, most of the “food farming” on ETH were also copies of others. For example, once Sushiswap came out with SUSHI there was a whole host of other food farms that were simply copy-paste. So we should not dismiss BSC outright.
As with most things, this will likely drive innovation forward in the entire crypto space. Hopefully the ETH projects can learn from some of the successes of projects on BSC.
Our take right now is simple – gas on ETH is making it unusable for a subset of users who are moving to BSC. However, projects need to prove themselves beyond simple yield farming on BSC by innovating. The jury is still out.
Pros of BSC
Cheap gas. Transactions currently cost around $0.10 or 10 cents for yield farming, which about 100-1000 times less than on ETH.
Faster confirmations. BSC users proof of authority/proof of stake so transactions get confirmed faster than ETH.
More potential upside for yield farming. Newer projects with lower marketcap means the degenerate yield farmers have more fun and higher potential returns while the music plays.
Cons of BSC
BSC is centralized. Pretty much all nodes that can build on the blockchain are whitelisted by Binance.
BSC lacks the robust ecosystem of Ethereum.
Most projects currently are copy-paste from Ethereum projects.
With that out of the way, let’s dive into how you can yield farm on BSC and explore the DeFi on BSC worlds.
How to Yield Farm on BSC (DeFi on BSC)
We’ve outlined a 5-step procedure below on how to yield farm on BSC with the emerging DeFi on BSC. This assumes you are already familiar with yield farming and DeFi on Ethereum. If not, we wrote a guide for Bitcoiners on DeFi.
This is not totally a beginners guide, so if you’re stuck at any stage, leave a comment below and we’ll try to help.
Note that BSC users BEP20 token standard similar to Ethereum’s ERC20 standard for fungible tokens.
Step-1: Set up your environment
Install MetaMask on Chrome/Brave. If you already have MetaMask you can use the same address on BSC (although we suggest creating a new one for privacy reasons). You will need to configure your MetaMask for BSC.
To do this, click on MetaMask > Networks (center top) > Custom RPC. Then enter the following values:
Register an account with Binance and buy BNB using any other crypto or fiat. You can withdraw up to 2 BTC worth of BNB without KYC but make sure you’re not logging in from US (use a VPN if you’re in US).
Easiest way is to buy BNB using BTC but if you have ETH, you can easily swap ETH to BTC and then to BNB. Alternately, Binance has a simple ‘Swap’ functionality like Uniswap these days but the fees will be higher.
Step-3: Transfer BNB into your MetaMask on BSC chain
Once you’ve purchased BNB, withdraw it to your MetaMask account. You can confirm the withdrawal via BSC Scan. This should also show you any other BEP20 tokens you hold.
Step-4: Find out the yield farming projects on BSC
This of course is where the real alpha is. These are the resources that we currently use:
You can get into specific Discord and Telegram channels to try to get ahead of the game.
Step-5: Start yield farming and sell your harvests
Since the transaction fees on BSC are low and a lot of projects are currently in the “fly by night” mode, you would be wise to yield farm and sell your harvest frequently. This is especially true if you are yield farming in pool 2 or death pool.
Also, always remember to check 1inch for the best price. This is because similar to Uniswap/Sushiswap dynamic and others like Bancor and 0x on Ethereum can split liquidity, the same is happening on BSC as well. Therefore, the best way to buy BEP20 tokens is via 1inch. Since the gas is so low on BSC, the higher transaction fees that 1inch generally has is not a concern on BSC.
Here is an example of how 1inch can route a trade on the BSC network. This is to convert from BUSD, the stablecoin on BSC, to BNB token.
Useful protocols and resources for DeFi on BSC
Pancakeswap to sell your harvest. Similar to Uniswap or Sushiswap
Venus to borrow BNB or other BEP20 tokens like stablecoins, similar to AAVE or Compound.
Sign up to Binance to buy BNB and other BEP20 tokens quickly and cheaply.
Bitcoin is a decentralized, censorship resistant store of value. DeFi, or decentralized finance is a while suite of financial applications all accessible to anyone with an internet connection. All these “DApps” are censorship resistant smart contracts on Ethereum and can work with all sorts of assets – ETH, tokenized BTC, tokenized USD (e.g. USDC, USDT, DAI, etc.) and a host of other assets.
Together, these form a web of interoperable protocols that have capability far beyond what’s possible in traditional finance.
You can use “tokenized BTC” as collateral to enter the DeFi world if you still want to retain BTC exposure. The way to do this is via WBTC or renBTC. More details below. However, note that these tokens have additional counterparty risk than simply holding BTC on the Bitcoin network.
The first thing you’ll need to do before you get started in DeFi is to set up your Ethereum wallet, sometimes referred to as a Web3 wallet. Unlike Bitcoin wallets that are primarily used to store BTC, a Web3 wallet does a lot of things for you –
Store ETH safely in a non-custodial manner so you never have to trust an exchange or third-party to hold your assets.
Store ETH-based tokens, including ERC20 tokens (fungible tokens), ERC721 tokens (non-fungible tokens), ERC1155 tokens, etc.
Interact with DApps (Decentralized Applications) on your behalf so that you can use an entire ecosystem of applications in a completely trustless manner, especially the DeFi apps.
For these reasons, MetaMask is by far the most popular Web3 wallet in use today. It is a simple chrome extension which prompts as a popup whenever you try to use a DApp like Compound or Uniswap. You can verify and sign the transaction to interact with the Web3 ecosystem.
MetaMask also supports hardware wallets like Ledger and Trezor. If you have substantial amounts of money, we strongly suggest using a hardware wallet in conjunction with MetaMask.
The steps here are as follows:
Download and install MetaMask for Chrome or Brave.
Create a new wallet. Make sure you keep the 12 words secret and secure, and backed up. The 12 words can be used to derive all your private keys used by MetaMask. If you’re using a hardware wallet, this step can be omitted. Instead, connect MetaMask to your hardware wallet.
Set a strong password.
Enter the Ethereum Ecosystem
If you already have Bitcoin, then there are several ways to enter the Ethereum ecosystem.
You can start from BTC and trade it for ETH on centralized exchanges. For most people, Coinbase or Binance should be the preferred options for this trade since they are the largest and most trusted exchanges.
If you want higher safety, go with Coinbase. If you want more options, including trading a bunch of DeFi and other tokens, and be able to margin trade, go with Binance. These days, Binance has become the preferred exchange for most serious people and traders in crypto due to all the extra features it offers. More on buying fractions of Ether.
Cons: Lack of privacy, need trusted intermediaries
There is current a way to go from BTC to ETH in a fully privacy preserving way so your BTC and ETH addresses do not get associated with each other. This is via the Ren Protocol.
Note that this will cost around 0.1% in initial conversion from BTC to renBTC and another 0.3% or so from renBTC to ETH.
Step-1: Go to Ren bridge and create a BTC deposit.
Step-2: Wait for the transaction to complete.
Step-3: Create the transaction to redeem your renBTC on Ethereum. We suggest allowing an arbitrary time to pass to increase privacy.
Step-4: Go to 1inch and convert renBTC to ETH. Make sure to connect your wallet (via the MetaMask popup) and confirm the transaction that pops up in MetaMask. Note that you may need to do 2 transactions – one approval and one actual exchange.
1inch will automatically split and route your order via all the decentralized exchanges to give you the best price.
As you can see, 1inch is able to create complex routes through the entire DEX ecosystem to bring you the best price.
Step-5 (optional): Use Tornado Cash to enhance privacy. If you want to improve privacy, make sure to deposit the ETH you obtained into Tornado and withdraw it in another address. This is a completely trustless smart contract based mixer (unlike several BTC mixers that have been mostly scams).
However, be aware that the gas price is fairly high to use, so we suggest using this for 10 ETH and above.
At this step, you should have converted your BTC into ETH successfully!
Note: There may be other bridges coming online that convert BTC to ETH in a decentralized or semi-centralized manner. Do your research on how safe these are. When your intention is to immediately convert renBTC to ETH, the bridge is reasonably safe. We don’t recommend holding renBTC since there are additional centralization risks still with Ren.
Pros: Decentralized, privacy preserving.
Cons: Gas costs and other costs add up – expect close to 0.5%-1% depending on how much BTC you start with for the whole process.
Protocols and Tokens
Once you have the ETH in your MetaMask, it is time to go to town playing with DeFi!
The first two primitives we suggest are exchange and borrowing.
For exchange, if you want to buy any tokens, simply go to 1inch to get the best pricing. 1inch will source liquidity from over 20 protocols for you and find the best pricing and order routing. You can also go directly to exchange protocols like Uniswap, Sushiswap, and Balancer.
You can check out CoinGecko for some of the projects. CoinGecko is usually on top of adding new DeFi and other Ethereum projects.
Then, check out lending. You put in excess collateral and borrow against it. The best place for this is Aave. Another option is Compound.
Some of the DeFi blue chips are AAVE, SNX, LINK, UNI, YFI. You can also simply buy DPI, which is a DeFi index tracking several tokens.
If you’re feeling adventurous, check out some of the yield farms. Yield farming is a way to distribute a project’s tokens widely to users and other value providers. Make sure you thoroughly understand the risks you’re taking including smart contract risks and impermanent loss when you’re being a market maker.
As a first pass on smart contract validation, vfat has a good list of yield farms and a consistent and easy to use interface.
There are other DeFi ecosystems that you can also explore. This is outside the scope of this guide, but you can check out Polkadot, Cosmos, Ava, BSC, etc. There are also primitives on arguably lower quality blockchains like Tron, and EOS as well but we do not recommend them as such.
Along with Ethereum, BSC (Binance Smart Chain) has entered into a thriving ecosystem of DeFi primitives and apps being built. One advantage of BSC is the transactions are far cheaper compared to Ethereum. The biggest disadvantage is its centralization risk. Read more about DeFi and yield farming on BSC if you’re interested.
However, if you’ve only been in BTC all these years, we strongly suggest getting familiar with the DeFi ecosystem on ETH since it is the most established and trusted.
Want us to cover something in greater depth or have any questions on the above? Drop us a comment or email us and we’ll be happy to help.