The world of Decentralized Finance (DeFi) is perhaps one of the most innovative places in the entire blockchain industry. With so many projects coming up every day, it is difficult to keep a track of everything. And that only goes to show just how many people are flocking to DeFi to make profits.
While Ethereum is still home to most of the innovation going on in the DeFi space, things are picking up the pace on the Binance Smart Chain (BSC). In this article, we’re going to discuss one such innovative platform that has come upon BSC, ApeSwap.
Are you farming on ApeSwap? Then we recommend you to use Defimax.com to track your portfolio and LPs on ApeSwap.
But before we get into it, here’s everything you’ll find in the article. As always feel free to skip to any section of your liking if you know what ApeSwap is and are just here for some specific piece of information. If you are, however, new to the platform, make sure you read through all of it.
- What is ApeSwap?
- What is the BANANA Token?
- What are BANANA Farms?
- How to use ApeSwap?
- What are Initial Ape Offerings?
With that out of the way, let’s jump right into it!
What is ApeSwap?
ApeSwap is a multi-purpose DeFi platform that you can use for Yield Farming and Staking. The platform is built on the Binance Smart Chain and has been forked from PancakeSwap.
For those of you who don’t know what PancakeSwap is, it is a decentralized exchange for swapping BEP-20 tokens. The platform is quite similar to Uniswap and SushiSwap since it is also built on the same principles that all automated market makers (AMMs) are built on. We’ve written an article about it that covers the platform in detail and guides you on how you can use it. Feel free to check it out if you want to know more about it.
ApeSwap works similarly since it is also an automated market maker. For those of you who don’t know what automated market makers are, strap on because this is going to be a lengthy explanation.
To understand AMMs, we need to begin by taking a look at how traditional trading works.
Traditionally, trading has relied on humans creating order books and entering prices in them. Since the order books are public, they can be accessed by all of the traders on the platform. Amongst those traders there would be some who would be willing to make a purchase at the price asked for by the seller. They can then put their bid and make the purchase.
But what if none of the traders agree to buy the said product at the price quoted by the seller? When that happens, there’s a mismatch between the expectations of the buyers and the seller. And ideally, there shouldn’t be any trade happening in this case—unless one of the parties decides to compromise.
But in reality, everyone looks for a profit—be it the buyer or the seller. That is why a person trying to sell anything would want to sell it for as high a price as possible. And someone looking to buy something would want to buy it for as low a price as possible. With neither party willing to budge, there wouldn’t be a market.
This creates the need for a trader who is willing to buy the said product at the rate demanded by the seller. And in traditional markets, this role is played by the market maker.
Market makers in traditional markets are traders who only trade in certain items but are ready to buy or sell those items at any given price. This helps them trade with both buyers who are seeking low prices for the said items as well as the sellers who are seeking high prices for it.
While this sounds like a perfect strategy, technology has come a long way. And to not use it to reform how we trade would be foolish. So the developers in the DeFi space created Automated Market Makers that work with the help of lines of code called smart contracts to set a price for all the cryptos being traded on the platform. And since we’re using automation for it, the users get the prices in the market at all times.
To know more about Automated Market Makers, feel free to check out our article about it. It is packed with a lot of useful information for you to understand AMMs better.
Coming back to ApeSwap, the platform was built on the Binance Smart Chain. If you don’t know what the Binance Smart Chain is, perhaps now would be a good time for you to find out.
The Binance Smart Chain (BSC) is a blockchain developed by Binance that runs in parallel with the Binance Chain. It has a few functionalities that the Binance Chain doesn’t have (like smart contracts) which makes it great for developers looking for a new blockchain.
We all know that Ethereum has a high GAS fee that cuts into your profits. And that isn’t the only problem people face on the platform. Since there’s so much going on in the Ethereum blockchain, there’s a lot of network congestion. For both of these reasons and more, a lot of developers are looking for alternative blockchains to build their DApps on.
And that is where BSC shines out. Being relatively new, the network congestion on the blockchain is low. Moreover, it doesn’t cost a lot to make a transaction on the platform. It is even compatible with the Ethereum Virtual Machine (EVM). So if you’re comfortable working on EVM, you could easily port your DApps to BSC.
The fact that it runs as an independent blockchain and not as an off-chain scalability solution for the Binance Chain inspires confidence. What that means is, if in the future, the Binance Chain goes offline for some reason, BSC would be unaffected by it. It would function as if nothing ever happened to the Binance Chain. That said, the two, more or less, share the same design.
What is the BANANA Token?
The BANANA token symbolized by $BANANA is the native currency for ApeSwap. For doing just about anything on the platform, you would require it.
So if you’re planning on participating in any liquidity pool or in some other activity on the platform, make sure you have some $BANANA with you.
What are BANANA Farms?
Once you’re on the ApeSwap platform, you’ll realize that you need $BANANA—and you need a lot of it. One way to do so is to go ahead and buy a lot of $BANANA. But that is something you can do only when you have a lot of money to spare. What if you don’t have that kind of money?
In that case, you can try to farm more $BANANA. And there are plenty of opportunities for you to do so on the platform. Back when the platform had only just started, it had 5 farms, namely BANANA/BNB, BANANA/BUSD, BNB/BUSD, BTC/BNB, and ETH/BNB. The platform has since added a lot of new farms for both well-known projects as well as new partners.
How to use ApeSwap?
Using ApeSwap is pretty easy. All you need to do is find a Binance Smart Chain (BSC) compatible wallet and head over to ApeSwap.Finance.
Once there, you can choose to swap, stake, or participate in liquidity pools. Upon choosing to do either, you would be asked to unlock your wallet.
When you click on “Unlock Wallet”, you would be asked to choose between the different supported wallets. Once you choose your wallet and connect it with ApeSwap, you are good to go!
What are Initial Ape Offerings?
An Initial Ape Offering (IAO) is a fundraising activity that ApeSwap uses to launch new tokens and to bring liquidity to those tokens. To participate in the IAOs, you would mostly need BANANA-BNB LP tokens.
To get BANANA-BNB LP tokens, all you need to do is add some of your BANANA and BNB tokens to a liquidity pool. Upon doing so, you would get BANANA-BNB LP tokens in return.
Finding an IAO to participate in is pretty easy as well. All you need to do is go to ApeSwap.Finance/IAO and take a look at the different IAOs out there. Should you find an on-going IAO that you’d like to participate in, you can commit your BANANA-BNB LP tokens to buy the IAO tokens.
When you trade your LPs for the token being launched, you’re basically giving BNB to the project and burning the $BANANA.
Once the sale is complete, you can claim the IAO tokens you’ve bought during the sale. Any unspent funds would be sent back to you.
Before You Go…
ApeSwap is an interesting concept that is a lot more than a bunch of ape-related puns thrown here and there.
Looking at the support it already has and that it is garnering, it would be apt to expect the platform to go big soon. That said, when it comes to investing your money into anything, it is always advisable to do your own research.
Don’t invest just because some influencer said “moon” or “lambo”. Invest because you resonate with what the platform stands for.