BTC Geek

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:

RPC URL: https://bsc-dataseed.binance.org/

Chain ID: 0x38, 56 in decimal

Symbol: BNB

Block Explorer: https://bscscan.com

Here’s the complete guide if you’re stuck.

Step-2: Buy some BNB from Binance

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:

• BSC Scan’s yield farming list
• vfat compatible BSC yield farms
• DeFi station

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.

Buy BEP20 tokens on 1inch.

This is a guide on how to buy TORN token from Tornado Cash. Tornado is a privacy and anonymity protocol on Ethereum. It helps users with this extra layer of privacy using a trustless mixer, with denominations of 0.1 ETH, 1 ETH, 10 ETH, and 100 ETH. It also works for ERC20 tokens like USDC, DAI, and USDT.

Tornado Cash has been in operation for a while now and has proven its effectiveness in real-world adversarial scenarios. To that end, the protocol has come up with its own token TORN. This is currently a governance-only token but it is not hard to see how it can become a value capture token via fees. The users of Tornado would not mind paying some fees for peace of mind and privacy.

TORN’s tokenomics is well thought out and the inflation schedule is very gradual with no bumpy lockups expiring. In addition, there are no pesky VCs in TORN’s allocation ready to dump on retail as soon as possible and bring down its value.

The allocation of TORN has been very fair, providing TORN to early users of the Tornado protocol and using TORN as an incentive mechanism to increase the number of users and total value locked (TVL) in the protocol. This is essential to the success of TORN and Tornado since the larger the anonymity set, the better it is for the users.

How to Buy TORN

If you want to buy TORN, the simplest way currently is through CowSwap. The reason for this is that CowSwap aggregates liquidity across multiple DeFi exchanges and most importantly, you won’t be affected by MEV sandwich attacks. Long and short of it – you will get the best execution price via CowSwap than directly sending your transaction via say Uniswap, Sushi, Curve, or Balancer. Use this especially if you have larger orders to buy or sell.

Another good way is to buy TORN on 1inch.

1inch has both its own liquidity pool for TORN/ETH but is also an aggregator. This means it will guarantee you a lower price to buy TORN than directly going to other DEXes like Uniswap. Here is the Uniswap pool for reference.

1inch is able to provide fairly sophisticated routes for your order, and even split it up into various protocols and DEXes to bring you the best price. Here’s an example going from YFI to TORN which combines 4 DEXes and protocols – Uniswap, Sushiswap, Balancer, and 1inch.

1inch also currently has a liquidity provider (LP) incentive which has increased the pool size. See the next section to learn more about this if you want to participate.

Note that DEX trades can take up decent gas, so if you are trading small amounts, it is better to trade on Binance instead. We don’t usually recommend CEXes but these gas prices are unusually unprofitable for anyone trading < 100 ETH batches.

How to Earn 1inch Tokens by Staking TORN/ETH (currently inactive)

1inch has a limited time liquidity providing incentive for TORN. This is a great way for you to earn some 1inch tokens while also earning liquidity provider fees on 1inch.

To access this, go to 1inch > DAO > Farming and select the ETH/TORN pair. The current APY is 200%. Remember that you take on impermanent loss risk by being an LP.

To become an LP, first buy TORN via 1inch, then add liquidity to the TORN/ETH LP pair on 1inch.

You can read the official 1inch announcement here.

How to Farm TORN

You can also farm TORN instead of buying TORN from an exchange. This is a long-term play since the amount of TORN that you earn depends on the time you are staked. However, this is good because TORN is gradually released into the market.

The mechanics are a bit complicated due to privacy considerations. You get AP tokens that you can convert on a special Balancer pool into TORN after you withdraw a note. Also, always check the gas prices since they can take up a significant amount of ETH for Tornado and thus reduce profitability.

You can read the TORN farming details here.

This guide on how to buy DPI, the DeFi index fund will walk you through what DPI is and why it is powerful to get a diversified exposure to DeFi with minimal effort.

DeFi, or decentralized finance, is having a moment on Ethereum. The rise of “blue-chips” like AAVE, SNX, and YFI has been followed by the rise of newer tokens like UNI and SUSHI and then a long-tail of promising projects from there on out.

For a regular crypto investor who isn’t spending 24/7 in Discord channels and Telegram groups, keeping up with everything can be daunting. Even then, buying and rebalancing a DeFi portfolio isn’t trivial due to increasing gas costs.

What is a DeFi Index Fund?

A DeFi index fund is an index that is backed by several other DeFi tokens. This index itself is tokenized and assets held in reserve, i.e. each token of the DeFi index fund can be redeemed for underlying assets and each token can be created by supplying the underlying assets in the specific ratio.

A DeFi Index is an ideal instrument that grants exposure to underlying DeFi tokens and does the rebalancing automatically on behalf of holders. Its value is fully backed by the DeFi tokens backing the index, just like a regular Index Fund in traditional equities.

What is the DPI Index?

The DPI index is maintained by the popular DeFi Pulse team and built using the Set Protocol.

As of this writing, there are 10 components of the DPI. They are as follows:

• AAVE at 25.80%
• UNI at 23.79%
• SNX at 16.31%
• MKR at 9.42%
• COMP at 7.20%
• YFI at 6.50%
• LRC at 3.89%
• REN at 3.67%
• KNC at 1.98%
• BAL at 1.63%

Now of course you may not agree with the weighting here and that’s the whole point of the index. For example, YFI feels underweight in the index at the current valuations, but that’s a personal opinion.

How to Buy DPI Index

In order to buy the DPI index, you can simply need to buy the DPI token from any exchange. However, due to the nature of the index being backed by other tokens, you can also “create” a token of DPI by supplying the underlying assets.

If you want to supply all the assets and get DPI tokens, we refer you to the tokensets page of DPI. This may be a good play for DeFi whales who may get better pricing and even find arbitrage trades in volatile markets and make a profit off of price discrepancies.

If you’re a smaller investor or don’t want to deal with the creation and redemption process, then buying DPI off an exchange is the easiest way to gain exposure to this DeFi index.

To buy DPI, follow these steps:

Step-1: Go to a DeFi aggregator like 1inch to find the best pricing for DPI.

Step-2: Connect your Web3 wallet like MetaMask.

Step-3 (optional): Make sure you have ETH or another ERC20 token in your wallet. If not, you can buy from exchanges like Binance or Coinbase.

Step-4: Select which token you want to convert to DPI, or just stick with ETH.

Step-5: Execute the trade and you should have DPI in your Web3 wallet.

This should route your order through the best DEXes on Ethereum even for pretty complex paths. For example, here is a sample routing to convert from RLC to DPI.

If you are an investor DPI, let us know your thoughts in the comments below and what tokens you would like to see added to DPI.