Beefy Finance is a yield farming protocol on the Binance Smart Chain. According to information from defistatio.io there are currently around 50 million USD locked in the beefy finance protocol.
The protocol offers a variety of vaults that can be used for yield farming. A vault is implementing an investment strategy that maximizes the yield for a given token. It automatically reinvests all the profits that it obtained from following the strategy.
The strategy pursued by a vault is specified in the code of the underlying smart contract and is not subject to any human interference. It can be compared to an ETF operated by algorithms that reinvests all profits. Strategies can be discussed and proposed in the Beefy Discord Channel.
Among the cryptocurrencies supported for yield farming are the following:
- BTCB (Bitcoin tokenized as BEP-20 token on the BSC)
- A variety of stable coins (USDT, USDC, DAI)
Users can deposit into Beefy vaults through any of the supported wallets on Binance Smart Chain such as MetaMask, Binance Chain Wallet and Wallet Connect. If for example you would like to yield farm with your Bitcoin you could exchange it to BTCB and convert it this way into a BEP-20 token which is a native asset on the BSC (Binance Smart Chain). Thereafter, you could deposit it on one of the supported wallets and then deposit it into the BTCB vault on app.beefy.finance – the current APY for BTCB is around 38%.
On the Beefy App you can see all the projected APYs you can obtain from different vaults. The APY describes the rate of return you are expected to obtain from an investment considering the fact that all profits would be constantly reinvested and you therefore would benefit from compound interest.
Bear in mind that these projections are based on the annual return you would obtain if the current market circumstances would remain constant. However, the market circumstances constantly change and therefore the actual yield obtained can vary. As long as the BSC remains popular and growing you can expect that the APY will remain high.
Besides the BSC Beefy also is implementing vaults for HECO. The HECO chain is a public blockchain which is supported by the Huobi exchange in a similar way as Binance supports the BSC.
Using vaults for yield farming has the advantage for users that they do not need to worry about finding the protocol which is paying the highest yield for them. Instead this is all automatically taken care of by the vault. However, the protocol has not yet passed an external security audit. The risk of certain vulnerabilities in the smart contracts therefore remain present. The code is as always open source and the repositories are published on Github.
The native token of Beefy is called $BIFI and has a supply of 80,000 tokens. The entire token supply was premined. The price of $BIFI increased from around 70 USD at the beginning of the year to more than 1,200 USD by the end of February 2021.
$BIFI investors have the right to govern the Beefy ecosystem and obtain a share of the vault performances. In order to obtain the profits investors need to stake their $BIFI tokens in the Governance pool. Profits are paid in wrapped BNB proportionally to amount of tokens staked in the pool.
10% of the token supply was distributed to the team members. The team tokens are vested and gradually unlocked.
Beefy is one of several yield farming applications on the BSC. Other protocols that were covered by FrontierProtocols include: