What is Yield eAggregator?

Yield aggregators are platforms that implement multiple DEFI protocols/chains to provide users with an enhanced experience. They implement different protocols and strategies to provide users with maximum returns. The returns can be fixed or variable and require users to stake and lock funds.

They are different from other farming and staking platforms because they have multiple sources or mediums of investments. Conventional yield farming often comprises of a single chain, unlike Yield aggregators.

What is Autofarm?

Autofarm is a yield aggregator platform that facilitates users with staking options for the Binance Smart chain, HECO, and Polygon network. The TVL (Total Volume Locked) and the market cap of Autofarm at the time of writing is $1.00 Billion dollars.

Autofarm optimizes assets and their returns from different BSC platforms such as Venus, Pancakeswap, Bakeryswap, etc. You can also choose from Single Assets, Liquidity Pool Assets, Stable coins, Stable coin LPs.

Almost all of the assets locked consist of Binance smart chain assets. The TVL of the Binance Smart chain alone is $939.13M in autofarm vaults. Autofarm is also working on AutoSwap, which is a DEX service for BSC assets.

Auto swap is in public alpha mode, the platform has advised users to be aware of the risks before swapping assets.

How to deposit or exchange?

Autofarm is a really simple to use and intuitive platform from a user's point of view. There are no fancy sections, or unnecessary advertisements, the website is really precise and to the point.

Autofarm supports Binance smart chain wallet and Wallet connect. You can connect your wallet and stake assets based on the annual ROI or preference.

Autofarm Token

Autofarm has also developed a platform token called AUTO. It is a Binance smart chain asset with a market capitalization of $57M at the time of writing. You can check the contract here.

Code, Safety and Community

The platform has made its chain public on its official Github repository. It is written in Solidity. Autofarm has also been through a number of audits by different firms, such as CertiK and others. You can read the full reports here.

Community support and help is available on telegram, discord, reddit and official blog posts can be found on medium.

What is Venus?

Venus Protocol is an automated protocol designed to bring a complete decentralized lending and credit system onto Binance Smart Chain. Venus declares itself a money market and stable coin platform built on top of the Binance Smart Chain. Venus can be compared with Aave or Maker of Binance Smart chain.

Venus explained
Lending on Venus

 Venus enables users to earn interest on their assets by supplying cryptocurrencies as collateral to the network. These tokens are then borrowed by the process of collateralization. This ensures both safety and incentive to users and the network.

Venus aims to solve all the problems and remove the involvement of traditional finance in the DEFI world. They have developed features that are considered unconventional for most DEFI platforms. This excites a larger demographic towards Venus.

Stablecoin backed by Cryptocurrencies

Venus enables the world's first decentralized stable coin, VAI. This coin is built on Binance Smart Chain, backed by a basket of stable coins and crypto assets rather than actual US dollars. This ensures that it is completely decentralized and no monopoly exists in their protocol.

Decentralized and Un-Biased

A lot of stable coins are actually backed by US dollars which actually brings FIAT into the play. This process is stable as FIAT currencies are a lot more stable as compared to cryptocurrencies, but somehow eliminates the core concept of cryptocurrencies which is being decentralized.

The decision-making on most DEFI platforms is considered biased while there are stakeholders and private equity firms in play. These adversities are technically making them heavily centralized.

Faster and Cheaper!

Venus utilizes the Binance Smart chain for fast, low-cost transactions. This overcomes the conventional problem faced by the Ethereum blockchain, which is the heavy fees and slower transactions.

Incentivized on Demand and Supply

Users can supply cryptocurrencies and stable coins and earn a variable APY for providing liquidity to the protocol. The liquidity provided is secured by over-collateralized assets locked by borrowers. The interest rate, however, is not fixed but based on demand and supply of the particular assets, this can bring some ease for borrowers with lower collateral rates.

Minting stable coins

The block earns the interest for lending assets and can be used as collateral to borrow assets or to mint stable coins. These stable coins can be used on a platform called Swipe. This platform provides virtual and physical debit cards backed by cryptocurrencies. You can spend on more than 60 million locations worldwide.

vTokens?

The protocol-created pegged assets when collateral is supplied are called vTokens. Users that supply their cryptocurrency Venus receive a vToken. If you provide Venus BTC you will get vBTC token in return. vTokens are created and implemented by Governance processes and voted by Venus Token holders.

vTokens on Venus
vTokens are the only way of redeeming your supplied cryptocurrencies.

These vTokens can be stored in cold storage and can be transferred to other users.

Governance Token (Venus Token (XVS))

The Venus Protocol is governed by the Venus Token (XVS), which is designed to be a “fair launch” cryptocurrency. There are no founder, team, or developer allocations, and the XVS can only be earned through the Binance Launch Pool project or through providing liquidity to the protocol.

Code and Security

The source code for the platform is public including the smart contract and can be found on GitHub. Venus has been audited by CertiK with an overall score of 93%. You can read the full report here.

Conclusion

Venus is overall a great platform with still a lot to come. The zero FIAT involvement, protocol governance, better rates, and algorithms allow venus to embrace the definition of decentralized in DEFI.

Mark Cuban has always been a huge fan of the cryptocurrency revolution. He is in the list of very few capital investors who actually like cryptocurrencies and show their support towards this cause. This love is not unrequited and communities consider Mark a favorite with people like Elon musk.

In a recent interview with a popular YouTube channel Bankless, mark shared his views on open finance, DeFI and NFT's. Here is a breakdown of what the popular American entrepreneur had to share with the world about crypto revolution.

Why the sudden support?

Mark shared his views on bitcoin, calling it a "store of value" instead of a technological advancement comparing it with traditional finance. He said that it still isn't an alternative for the US dollar despite being so popular amongst masses. It cannot be seen as a regular currency although it is better.

"I've always compared it (Bitcoin) to Gold"

The popularity and prices of

An Ethereum FAN?

Mark shared that he was fascinated by the Ethereum network and smart contracts. He also admitted to minting an NFT on Mintable (A popular NFT platform). He explained the royalty process and ability to sell with freedom and ownership.

He identified the flaws of traditional trading and royalties where once sold the owner doesn't get revenue share on reselling. There is no process or accountability for resale as compared to trading on block chain where every record is immutable so every resale can be linked back to the original creator.

Mark also told that he is learn solidity to understand Smart contracts better.

"That is the first thing that got me started on NFTs".

Interaction with Mintable and digital royalties

Thoughts on Decentralized Finance?

Mark started research on DEFI upon hearing terms like Yield farming, API, token binging, and collateral lending. He identified the problems with tradition finance and stated that even if you are over collateralized you still have to go to a bank fill out paperwork and it is a multi-day process to borrow money.

He shined his knowledge on Decentralized finance and how it is changing the lending and borrowing market, with no pedigree, no background checks and fair play. DEFI is also a good investment for investor with great yields and APY as compared to investing in banking.

What got me excited is really understanding that DEFI turned Bitcoin and Ethereum into personal banking"

Mark on DEFI

I can borrow or anybody can borrow regardless the size in seconds

Mark on lending

Regulations?

"I have met senators trying to explain blockchain"

Mark on regulations in blockchain

He said that as generation z become more aware, smart capital will find its way. He is optimistic on DEFI to be success as more institutions will eventually realize and adapt decentralize models.

Gas fee?

He stated that most people see the APY, but not actually do the math and calculate the transaction fee for their investment or deposit. He said that if someone invests a $100 at an APY of even 60%, they should know that you have to hold it long enough to get break even.

This thing should be addressed as it can back fire on the whole industry. He said that platforms and networks should always keep this in mind, this can break the goodwill of the industry.

you gotta take care of the little guy

Mark talking about smaller investors

He said that even platforms like Aave are not taking this in consideration. A lot of people yield farming on a smaller level and trying to figure out are losing money.

What is a Collateral?

Collateral in DEFI is similar to traditional finance. While acquiring a loan a borrower goes to a lender for a certain amount of funds. The lender agrees to provide a loan once they both agree on the interest rate, this rate is based on the amount and the time of repayment.

The lender asks for the security of his loan by taking something of value from the borrower. The valuable asset that is being kept for security against the loan is known as collateral. They both agree that in case of failure of payment the ownership of the collateral is transferable for recovery.

The value of the collateral is more than the amount of the loan most of the time. The collateral allows the lender to guarantee the safety of funds if the borrower is insolvent. Sometimes in the case of insolvency, the collateral recovers both the original value and interest rate for a loan.

Lending in DeFI?

Lending in Defi is similar to traditional finance but the type of collateral is different. In traditional finance, collateral can be provided with assets like property, cars, gold, stocks, etc. In DEFI lending if you borrow a cryptocurrency you have to provide another cryptocurrency against it as collateral, this is known as collateralize lending.

For example, John is the lender and Mike is the borrower. John agrees to provide mike with $1000 worth of Ethereum against collateral that is 150% more than the lending amount. They both agree on a repayment time of 30 days with an interest rate of 10% above the amount.

This means that Mike has to pay $1100 to John within 30 days. If Mike defaults on the payment his collateral will liquidate to cover losses. This financial operation is automatically run through a smart contract. Different lending platforms have different smart contracts. The smart contract is written to lock the collateral release them if the borrower is able to repay the loan.

Security and Risks

The biggest issue is over-collateralization. This means that the borrower will often default loan as the locked collateral is more than the actual loan amount. This means borrowers can lose their private keys or the smart contracts that hold their collateral can be hacked.

Over-collateralization is associated with impermanent loss to ignore losses. To ensure no future losses most platforms have really high collateral ratios for nonstable coins. For example, if your collateral is $150 Ethereum for $100 DAI and the value of Ethereum drops below $150 it will result in a penalty. To ignore these most platforms have an average collateral ratio of over 300%.

This collateral ratio is really huge and discouraging for borrowers. This can be ignored if the borrower collateralizes stable coins, they are less likely to see a price drop. The interest rates associated with stable coins are also less compared to major cryptocurrencies.

To determine the share of a liquidity provider in a pool, platforms generate a new token for the pair. This token is known as a liquidity pool token or LP token. They generate in accordance with the pair and share of the pool.

For example, if a trader contributes $40 worth of KMD and USDT to a Binance smart chain pool with a total value of $200. They will receive 20% of that pool’s LP tokens. This means that they own 10% of the crypto liquidity pool. On most platforms, the name of LP tokens varies with the trading pairs.

In the example above the LP token for the trading pair is KMDTUSDT. The number of tokens varies on the price difference for a said pair. For example, 1 KMD and 3 USDT will make 1 KMDUSDT token. The same goes for every asset you provide in the liquidity pool.

Why Liquidity Pool Tokens?

The purpose of LP tokens is to ensure there is no custody of your funds in a liquidity pool. They are the key function of an automated market maker in a liquidity pool. To ensure that a pool is really automatic, decentralized, and fair, LP tokens come into play.

The non-custodial feature of AMM platforms is key to being part of the decentralized finance ecosystem. You remain in control of your assets by receiving LP tokens in return for providing liquidity to the pool. This ensures a fair play providing you with something of value for providing the pool something of value.

Benefits of LP tokens?

These LP tokens also ensure network security. This means they are highly lucrative and crucial for a liquidity provider or platform. The more the coins stay inside the same ecosystem, the more secure, stable, and scalable the network becomes. To achieve this DEFI has introduced users with more incentives such as yield farming,

The Liquidity pool tokens generated are ERC-20 standard. This means they are a token like Ethereum or Binance smart chain tokens. Traders can also trade LP tokens outside their platform of origin. This means stakeholders can use them for further operations.

When you are investing assets to earn interest or profit this is the first thing that comes to mind Impermanent loss refers to the price change in your asset when invested vs now. In other words, it is temporary.

The difference between the original price (at the time of investing) of your asset vs the current market value is called Impermanent loss.

This means less dollar value for the number of assets invested. Cryptocurrencies are the most prone markets to impermanent losses.

Impermanent Loss In Liquidity Pools

The most prone type of markets for suffering impermanent losses are AMM markets. When you provide liquidity to liquidity pools and the price changes you suffer impermanent losses. These losses are temporary but affect the interest rates and face value of assets.

The bigger the change in price, the bigger the impermanent loss. This means that the amount of profit you earn on trading fees for providing liquidity can also change in some markets.

How to repulse

If you are a long-term investor, there is not a lot to worry about. Impermanent loss is temporary due to market unrest and once the market is on the bull run again, the impermanent loss can become profitable in the long term. So fixed deposits and safe assets are welcome.

Impermanent loss can be somewhat covered back in trading fees. For example, uniswap provides a 0.3% fee directly to the liquidity provided. If the value of the asset has decreased it can be covered to some extent with profit earned. This depends on the number of trades for a specific token or coin.

Stable Coins

Stable coins and penny coins usually have a stable price range. Stable coins are really stable, most of these coins remain at $1 value for months. Huge market unrest may decrease the value only by 2 to 3 cents. These coins are always backed by most investors and considered really safe approach for both long and short-term investors.

This is one of the fundamental concepts that anyone willing to invest should know. Always look for tried and tested Automated market makers. The increasing number of DEFI platforms also bring increasing flaws in their contracts, due to lack of originality or urge to launch uncatered product.

What is a liquidity Pool?

Liquidity pools are a collection of coins and tokens locked in a smart contract. These liquidity pools facilitate decentralized trading and lending. The ever expanding world of DEFI is generating new ideas such as yield farming, etc. All of these models have adapted liquidity pools as their backbone.

One of the first platform to integrate liquidity pools model was Bancor. They became widely popular with the launch of uniswap and later on Binance adaption. This model is not exclusive to large investors only. Anyone with funds can contribute to pools and earn incentives.

Liquidity Pools vs Orderbooks

The previous widely used trading model was orderbook model. In this model makers and takers used to settle on a price fair for both. Makers were those willing to sell their assets at the highest price. Takers were buyers willing to buy an asset at the lowest price. This model was good but with a few problems.

For every trade executed on an orderbook the maker had to pay gas fee to get converted funds in their wallet. This seems fair but Ethereum chain has a hefty gas fee even on transactions of pennies or a few dollars. Market monopoly was another problem for takers to buy illiquid assets at high prices. Finding assets that were illiquid on a good price was also a problem.

This was both a problem for makers and takers as on chain transactions on Ethereum chain were almost impossible. A two layered chain or pegged tokens is a method widely used but still unstable.

In liquidity pools there is no gas fee concept the liquidity providers have a pool of assets and price is automatically generated. Liquidity pools have trade fees as low as 0.17% which is better than many large scale centralized exchanges.

How does a Liquidity pools work?

Liquidity pools use Automated market maker (AMM) model. This comes as a game changer as a buyer does not have to rely on a seller but instead trade from a pool directly. We have mentioned previously that, assets stored in a smart contract are called liquidity pools.

This is called peer to contract trading. A buyer does not need a seller with an order of his/her matching. They only need enough liquidity in a pool to execute trade directly from the pool. An algorithm manages trades, prices and fees automatically.

In every liquidity pool the ratio of assets is always 1:1. For example, if there is a pool of KMD/USDT and the price of KMD is 3 USDT each. There should be 3 USDT for each KMD in the pool. If the pool has 1000KMD it should have 3000 USDT. This ensures a smooth trade execution with maximum asset utilization.

For each trading pair liquidity providers get LP (Liquidity pool tokens). 1 LP token means 1 KMDUSDT token for 1KMD:3USDT in liquidity pool. This represents the amount of liquidity provided for an assets. LP tokens are exchangeable but makes liquidity pool concept more complex and bloated.

Conclusion

The concept of Liquidity pools in DEFI world is a breakthrough and is being used in a number of cases. Some examples can be yield farming, governance projects, minting synthetic assets. DEFI is connecting traditional finance with more and more newer concepts such as tranching.

Liquidity pools are highly lucrative but comes with risks as well. You can read this article on impermanent losses, involving risks with liquidity pools.

What is pancake swap?

Pancakeswap is a decentralized exchange running on Binance smart chain. It is also the top spot category liquidity provider for Binance smart chain assets. The total volume is more than $2.15 billion with a circulating supply of 140 million cake tokens. The daily trading volume is more than $1.5 billion.

This platform recently surpassed the world's largest DEX uniswap in terms of trading volumes. Pancake became operational in September last year, despite being fairly new the platform has managed to reach a remarkable user-base with returns and incentives.

It is one of the rapidly growing communities in the Binance smart chain community which is providing users huge incentives, options, and personalized IPO's.

You can do the following on Pancakeswap:

Decentralized Exchange?

The token swap is as simple and similar to uniswap. This makes the exchange noob friendly, easier to understand for newcomers. To swap tokens simply connect a wallet, select to and from tokens, and exchange.

There is a flat 0.2% fee on a trade that goes to liquidity providers and reserves. The trade execution time is instant due to the block time in the Binance smart chain which is less than 5 seconds.

Adding Liquidity

The liquidity provided to the exchange comes from tokens that are stakes in Pools. In exchange, Liquidity providers get (PancakeSwap Liquidity Provider) tokens or FLIP tokens.

When a trader makes an exchange or swap they pay a 0.2% trading fee. The 0.17% of the fee earned goes to the liquidity pool as an incentive for the liquidity providers and 0.03% goes to the Pancakeswap reserve.

Once you provide liquidity to the example pair above, you receive an LP (Liquidity provider token) with the pair name. For instance, ADA/BUSD for providing BEP-20 Cardano and Binance USD liquidity.

Each token represents the number of tokens from the pair provided. One LP token would mean you have provided liquidity of 1ADA and 1BUSD. The interest earned on the token swap automatically adds up to the token 0.17% each.

Yield Farms

Another highly profitable option for liquidity providers to multiply their income is farming. Farming allows LPs (Liquidity providers) to stake their FLIP tokens received for providing liquidity to earn back CAKE tokens.

Go to the farm page to view available farms

The coins staked can be withdrawn back any time. There is not a fixed-term for staking your coins to earn profit. The multiplier represents the amount of cake a farm receives per block. If a farm is a 40x multiplier it means the cake received would be 40 per block (depending on the block reward).

Lottery

There is also a pancakeswap lottery for gamblers. The lottery pool is public and the reward comprises tickets bought by users. To participate users buy a ticket for cake. Each cake will get you 1 ticket consisting of 4 numbers from 1-14. If your numbers match the positions you win. The prize pool is distributed as follows.

20,000 cake injected by the platform once every 4 sessions.

There used to be 4 sessions in a day (6-hours a day). An increase in traffic changed the session timing to 2 sessions each day. Each session is 12 hours long and there are a total of 4 sessions. In every 3rd session, the platform injects 20,000 cakes into the lottery.

The lottery contract is public and audited by third parties.

The newer version of the lottery has 2 sessions in a day and 10,000 cakes injected every 4th session. The numbers have changed from 4 to now 6 and each number is from 0 to 9. Visit the site to know more

IFO (Initial Farm Offering)

This platform has a new and unconventional method of fundraising for new platforms. This fund offering allows investors to commit their LP (Liquidity Pool) tokens to an upcoming project. Investors can buy a token sale with flip tokens and claim at the end of the sale, simple.

You can launch your own IFO by filling out this form or going to https://pancakeswap.finance/ifo

Overview

There is a pancake swap info website to view analytics. The project was audited by Certik which is a blockchain security and auditing platform. They have public information and score of all major platforms. The audit reports are public and anyone can read and review them.

There is a docs subdomain for detailed information. The codebase is public and available on GitHub about the contract, voting, front-end, exchange, etc.

Decentralized Bridges to Connect Cryptocurrencies

Bridges in the verus ecosystem are a feature of Public Blockchain as a service. These bridges will allow other cryptocurrencies to flow in the verus ecosystem. Bridges will allow blockchain interoperability for the verus ecosystem.

Users will be able to freely trade coins from other ecosystems due to bridges. This includes sending, receiving, and storing coins and use of verus ID. These bridges will connect other cryptocurrencies in the form of tokens.

Bridges will be a key part of the verus DEFI system. They will ensure seamless transaction back and forth between blockchains. The liquidity provides will get transaction fee making sure verus remains a network economy.

Useful?

Different blockchains would have different bridges. This will ensure network reliability and security. The Ethereum bridge will be the first to get launched. Developers who are looking to develop their own bridges are welcome.

The verus DEFI system will provide liquidity in a form of an AMM with a reserve and fractional currency. Bridges will free users from the unreasonable gas fees on the Ethereum and native networks.

The tokens created on the verus ecosystem will be available on the Ethereum network. These tokens will be of ERC-20 type and will be available on the Ethereum network. This will provide incentives plus a chance to users looking forward to developing Ethereum tokens.

What is the Binance smart chain?

The Binance smart chain (BSC) is a blockchain developed parallel to the Binance chain. BSC is multi-chain and compatible with the Ethereum virtual machine and is designed mostly to inherit smart contracts. It is developed to bring programmability and interoperability to the binance chain.

The Ethereum network is known for being an extensive and expanding blockchain with a growing number of smart contracts. The previous binance chain was incompatible with the ethereum chain from a programmability standpoint.

Smart contract integration could've risked the binance chain. The binance smart chain allows users to build their decentralized apps and digital assets on one blockchain and take advantage of the fast trading to exchange on the other.

Speed and Liquidity?

Binance smart coin uses Automated market makers and Proof of Staked Authority. This consensus allows BSC to reach a 5 second block time. Users stake BNB coins to validate blocks and receive transaction fees as incentives. BSC profits both stakeholders and liquidity providers.

The automated market maker allows liquidity providers to get their fair share as well. The liquidity providers reserve original assets and traders or takers swap them for a specified fee. This fee is calculated atomically using an algorithm depending on the price movement in the market. Binance smart chain has a minimal fee structure to overcome the Ethereum gas price problem.

Binance Pegged Token (BEP-20)

The smartest move played in the development of BEP-20. These are similar to ERC-20 tokens but with lower fees. They can be received in the Binance exchange. These BEP-20 tokens can be easily converted into any asset without converting them to the original form.

In the image above you can receive BSC based DAI for a minimum fee. This DAI can then be converted to any other asset without converting it into its original ERC-20 form. The Binance smart chain is not restricted to only Ethereum but has multi-chain assets.

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