Feb 192021
DeFi on BSC yield farming

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.

Pancakeswap overtakes Uniswap DeFi on BSC

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:

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.

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.

Feb 132021
DeFi Guide BTC

Introduction to DeFi to BTC Hodlers

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.

Getting Started

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.

Centralized Exchanges

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.

Pros: Cheap

Cons: Lack of privacy, need trusted intermediaries

Decentralized Exchanges

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.

1inch renBTC to ETH

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.

For a more in-depth guide on exchange, check our guide on buying DeFi tokens without KYC.

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.

Other Ecosystems

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, etc. There are also primitives on arguably lower quality blockchains like BSC (Binance Smart Chain), Tron, and EOS as well but we do not recommend them as such.

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.

Feb 092021

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 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.

Buy TORN with YFI on 1inch

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

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.

Jan 292021
how to buy opium token from opium finance

This is a guide on how to buy OPIUM token from Opium Finance project founded by Andrey Belyakov and team.

What is Opium Finance?

Opium finance or opium protocol is a general purpose derivatives protocol built on Ethereum. The protocol allows investors and traders to create new positions, settle existing positions, and trade them with other traders and investors.

Opium finance’s first financial product is an insurance product. This helps investors in the DeFi ecosystem hedge some of their risks. This is mostly protection against smart contract exploits, defaults, stablecoin insolvencies, and other risks inherent in the system.

Since the opium protocol is general purpose, the insurance product can be specified to contain custom logic. A good example of a general insurance use-case with Opium would be to protect against a USDT collapse if you are heavily exposed to Tether. Other protocols will have a harder time getting the data to settle this type of position.

To learn more, check out the opium protocol docs.

How to Buy Opium Token

If you want to buy the opium token, which is the native governance token of the opium finance protocol, follow these steps:

Step-1: Go to 1inch OPIUM/ETH pool. Note that 1inch pool currently has the highest liquidity, but that might change in the future. The good thing though is 1inch is also a liquidity aggregator, so it can route liquidity to get you the best execution for OPIUM.

Step-2: Connect your MetaMask or another Web3 wallet.

Step-3: Execute the trade. That’s it! You should have the OPIUM in your wallet after the transaction is confirmed.

If you are starting out with a non-ETH token, e.g. say YFI or LINK, then you don’t need to convert to ETH first. Instead, let 1inch figure out the route that gives the best price natively. Just change ETH to your token in the dropdown on 1inch.

If you don’t yet have any ETH or other ERC20 tokens, you can buy from Binance. Note that sometimes trading on Binance could be preferable over DeFi exchanges if the gas fees is very high and your trade size is not too large.

For the month of February 2021, there is a liquidity mining program for OPIUM along with 1inch. You will earn both OPIUM and 1inch tokens during this time. Check out this post from 1inch for more details.

Jan 282021
Buy DPI, the DeFi Index

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.

Jan 212021
How to buy BADGER from Badger DAO

This is a guide on how to buy the BADGER token from Badger DAO. Badger DAO is a very interesting community driven Decentralized Finance (DeFi) project with the aim of bringing Bitcoin into DeFi.

Bitcoin of course is the OG of crypto. However, Bitcoin is also slow to move when it comes to making changes on-chain. “Smart Contracts on Bitcoin” is a meme we have been hearing for over 5 years now, and more recently, “DeFi on Bitcoin” has become a meme with some Bitcoin maximalists who don’t understand anything other than “number go up”.

For good reason perhaps, Bitcoin should remain conservative. The way forward then is to bring Bitcoin to the DeFi ecosystem instead of the other way round. This is where Badger DAO comes in, with its governance token BADGER.

What is BADGER?

BADGER is the native governance token of Badger DAO. The goal of Badger DAO is to build tools that bring Bitcoin into DeFi and Ethereum. Badger is not a single product – instead, it has multiple products and tokens.

The first product is the much awaited DIGG from Badger. DIGG is an elastic supply token similar to Ampleforth (AMPL). It tracks the price of BTC by expanding or contracting the token supply with a 24 hour rebase period. DIGG can be earned via farming, which has become a great way to get wide distribution of token these days in the DeFi world.

Other products might follow suite depending on the success of existing products and the community that has gathered around Badger.

How to Buy BADGER

Step-1: Go to 1inch (a DeFi aggregator) and check the best price of BADGER for ETH (or any other ERC20 token).

Step-1b (optional): Buy ETH with your BTC or local fiat at Coinbase or Binance or another local exchange.

Step-2: Connect your MetaMask or another Web3 wallet and execute the transaction.

Step-3: Just wait for the above transaction to confirm and you’ll have the BADGER in your Web3 wallet.

Remember to use an aggregator like BADGER so you get the best price, instead of going to a single exchange like Uniswap of Sushiswap. This is especially true if you want to convert a non-ETH token into BADGER.

For example, here is a path shown by 1inch to buy BADGER with YFI instead of ETH. As you can see, 1inch will automatically split the order and then route it to the best DeFi exchange for you to get the best price execution.

Buy BADGER with YFI on 1inch order routing

(the PMM1 in the above is a private market maker. These contracts source liquidity from centralized exchanges like Binance in addition to DeFi exchanges).

Jan 102021
buy BAO token from BAO finance

This is a post on how to buy BAO Token from Bao Finance but also how to farm BAO token instead of buying and why it has been quite attractive for DeFi enthusiasts.

BAO Finance is an interesting DeFi project that describes itself as a synthetic asset and lending platform, kinda like a combination of SNX and Aave. However, more immediately the reason it has caught the imagination of a lot of people and projects is its somewhat unique take on yield farming.

The broader product idea from BAO Finance is to use Uniswap, Sushiswap, and Balancer LP (liquidity provider) tokens to collateralize synthetic positions. Think of this as SNX but instead of SNX being the collateral, the LP tokens will be. To that end, it made sense for BAO Finance to first release a yield farming product.

Per their site,

The BAO token acts as a governance token for the fully community run project. It is also backed by the insurance fund where all Bao fees go.

How to Farm BAO Token

Before you decide to buy BAO, it might make sense to first look at how to farm BAO token instead since this could be more profitable with lower risk. This is especially the case if you have any Uniswap LPs sitting around doing nothing. Instead, you can stake them in BAO Finance and earn some BAO tokens immediately.

The most interesting thing about BAO yield farming is that there are hundreds of LP pairs available to yield farm.

However, one thing to note upfront is that you will only get 5% of the BAO tokens that you farm upfront. The rest will vest over a period of 3 years with a 1 year cliff. Therefore, if you are looking for a short-term farm, make sure to figure out if these numbers work out for you or not.

This is also why the advertised APYs are so high, since only 5% of this is “real” at the moment.

Also, make sure to read the docs, especially around fees and penalties before you start farming. There is both a deposit and withdraw fee.

BAO token APYs

The good news though is there are hundreds of LP pairs available so there are a lot of options. Check out all the BAO Farms here.

How to Buy BAO Token

BAO token has been one of the top performing DeFi tokens the last few days.

BAO token price coingecko bot

If you want to directly buy BAO token, make sure you buy via 1inch so you can get the best possible price. 1inch will automatically aggregate all of DeFi liquidity sources for you including Uniswap and Sushiswap. Uni and Sushi have the largest BAO pools of liquidity since they are incentivized with BAO farming currently.

You can also easily convert non-ETH ERC20 tokens into BAO via 1inch automatically via the best price execution and by splitting your order the right way.

YFI to BAO token on 1inch

If you want a more centralized exchange experience especially when gas is high, you can always go to Binance. If you need to buy ETH via USD, Coinbase is best.

You can also find the information on BAO/ETH pairs on Uniswap and Sushiswap. This is the BAO token on Etherscan.