Ever since its inception, the blockchain industry has been a hub of innovation. With strong support from the community, a lot has been achieved over the years and a lot more is expected to come soon.
But out of everything the industry has been able to pull off, perhaps the most famous achievement is Decentralized Finance (or DeFi). And with that came a whole slew of tools that allowed people to use the blockchain as an investment vehicle.
DeFi enabled people to break free from traditional assets and instead build their portfolios using decentralized assets.
We’ve already covered multiple products from the DeFi industry in our previous blogs. Today, we have two more for you – bEarn.Fi and its protocol, bDollar.Fi.
For those into Yield Farming, bEarn.Fi is going to be just the right thing. In fact, for those just starting out, this is one of the safest ways to enter the world of Yield Farming (and to the world of blockchain at large).
But before we talk further about the two, let’s quickly take a look at everything we’ll be covering in the blog. As always, I would recommend beginners read through everything we have in the blog to have a clearer understanding.
For those who already know what bEarn.Fi and bDollar.Fi are – feel free to skip to the section that you’re interested in.
With that out of the way, let’s jump right into it!
What is Yield Farming?
We’ve already covered Yield Farming in detail in our blog about Yield Farming. So make sure you check it out.
But in case you don’t have the time to check our blog out, I’m going to brief you about it without getting into too many details.
It was back in May 2018 at the Decentralized Finance Meetup, the term DeFi came into existence. It is worth mentioning here that DeFi products have been around for longer than the term DeFi has.
In fact, some of the companies attending the meetup – such as Maker Foundation, 0x, Wyre, and Compound Labs – already had successful products.
As the industry grew, people started to look for more ways to get involved, and somewhere down the line, yield farming came into existence. The concept is simple, all you need to do is lock some of your assets for some time and reap rewards.
Think of traditional farming for a minute. How does that work? You sow seeds and take care of the nurturing. You keep on nurturing the seed (which becomes the plant) and harvest it when the time comes. Once harvested, you can sell it off for some profit.
Yield farming works in a similar way. The only exception is that you don’t need to actively nurture your seed (your crypto holdings). In most cases, the algorithm takes care of all of that. All you need to do is buy some cryptos and lock them in on a yield farming platform. And when you feel like it, take them back along with the yield it created.
Since it’s all on the blockchain your cryptos are safe. And if you’re lucky (which a lot of people have been) you can even earn 100% returns on your investment. Do you see now why people are flocking in large numbers to the DeFi space? Traditional investment vehicles can never provide you such returns.
Now that you know what yield farming is, let’s talk about bEarn and bDollar.
What is bEarn.Fi?
The Binance Smart Chain (BSC) has a lot of cross-chain products for the DeFi space. bEarn.Fi is one of them. At its core, the platform provides gaming aggregation, an algorithmic stablecoin, a treasury, governance on multi-chain (BSC and Ethereum), and the thing we’re most interested in—yield generation.
Let’s discuss each of these.
Gamers have been facing a lot of issues while playing real-time games on the Ethereum blockchain. The reason behind it is the fact that the Ethereum network is relatively slow. Moreover, the gas fees and network congestion can be high at times. All of these factors combined make the experience of playing real-time games an unpleasant one when you’re on the Ethereum network.
bEarn.Fi aims to fix this issue by allowing users to play a lot of the games present on both the Ethereum blockchain as well as BSC. This cross-chain functionality enables gamers to make the most out of real-time games.
They no longer have to deal with diminishing returns due to the high gas fees on the Ethereum blockchain since they can simply use BSC to play those games. And BSC has way lower gas fees.
Nor do they have to deal with network congestion (at least as of now) since BSC has relatively low network congestion. Of course, this might change in the future as more and more people flock over to BSC. But at least right now, the numbers look promising.
bEarn.Fi has a treasury that is controlled under governance. In case you face a financial loss on a smart contract or protocol on the Ethereum blockchain or BSC, this treasury would provide coverage for that.
This works especially well for those who have just started using the dApps in the DeFi space. For them, all of it is new and overwhelming. Having the reassurance of being backed by a treasury is a feeling that will build up much-needed trust in them.
While it is always said that the users should not invest any money that they can’t afford to lose, many people do it anyway. And they are more susceptible to losing their money in a dApp. For such users, the treasury could be their saving grace.
Algorithmic Stablecoin (bDollar)
While we’ll discuss it in a bit more detail later, for now, all you need to know is that bDollar is the first algorithmic stablecoin on BSC. What makes it so special is that through the algorithms, its supply is deterministically changed to adjust the price of the token to match its target price.
The way the bEarn.Fi ecosystem is governed is pretty much like how governance works in other blockchain ecosystems. The BFI token holders and the BFIE token holders submit and vote on proposals. These proposals, if met with majority support then govern the ecosystem.
There’s another requirement that these proposals need to meet and that is having more than 30% of the tokens staked in the governance contract. Once they meet both of the requirements, the proposals are processed and brought into action.
Yield Generation (Binance Smart Chain Vaults)
The BSC Vault is a decentralized app (dApp) on the Binance Smart Chain with a high annual percentage yield (APY). If you want to look at the contract code for it, we have good news – it’s open source.
The way it works is it looks at the opportunities present in the market and then automatically generates yield based on them. And it works splendidly being the first and most advanced yield-farming aggregators working on BSC.
One of the best things about BSC Vaults is that they reduce gas costs. This way, the depositors get maximum profit for their deposits.
BSC in itself has been growing in popularity for providing high speed and low gas costs. Users have benefitted from its interoperability and programmability. Now the users can further benefit from it by yield farming using dApps built on it.
What this means for an average person without rich knowledge of DeFi or the underlying protocols and principles is that they can have a passive income with minimum effort. Gone are the days when only the programmers could benefit from blockchain. Even beginners can make a decent passive income stream using this platform.
It is worth mentioning here that there’s also a cross-chain portal for users to transfer assets between the Ethereum blockchain and BSC. So you need not worry about having your money locked on BSC.
What is bDollar?
As mentioned earlier, bDollar is the first algorithmic stablecoin on BSC.
Taking inspiration from the predecessors of Basis and Basis itself, the bDollar protocol is multi-token. It consists of three tokens, BDO, sBDO, and bBDO.
BDO is the algorithmic stablecoin that most users are going to go for.
sBDO stands for bDollar Shares. It is for holders to claim BDO inflation when the network expands. It works pretty similar to how the traditional shares work.
bBDO stands for bDollar Bonds. When the network contracts, you can purchase them at discounted rates, and when the network deflates (and the price goes below $1), you can redeem them for BDO.
Before You Go…
The Binance Smart Chain is still in its early stages and we’re already seeing great dApps rolling in. With bEarn Fi, people now have a more compelling reason to start their journey into the world of blockchain here.
That said, whatever happens to it is something we would all witness together.