In the world of crypto money, there are many ways to earn passive income: Including staking, yield farming, and liquidity providing. As Cryptoshift, we have provided you with information about the protocols that you can use as a staking platform before. But today we will talk about a different platform: Beefy.finance.
Beefy.finance, unlike the protocols you are used to, such as Venus.io or Bakerysoup.org, does not provide you with direct staking services. Instead, it offers you a set of services to maximize your yield farming returns. Moreover, it does this automatically.
- Beefy Finance can be thought of as a kind of tool that is decentralized and works as a yield farming optimizer.
- Users can benefit from vaults, strategies, launch pools, and the barn of trust here.
- The most prominent feature of Beefy Finance is that it is not just a platform that offers staking to its user directly. Instead of it, it offers different protocols that offer farming, staking, or liquidity harvesting and creates profitable strategies that can be automated by vaults.
- It supports 14 different blockchains, including BSC, AVAX, Heco, Polygon, Fantom, Harmony, and Aurora.
Are you excited? In the continuation of the content, we will provide you with a better understanding of the services offered in beefy.finance, the convenience of the protocol, and what yield farming is. If you’re ready, let’s get started.
What is Beefy.finance?
Beefy Finance can be thought of as a kind of tool that works decentralized as a multi-chain yield farming optimizer. It is possible to say that the total locked liquidity and collateral ratio in this protocol, which is built on Binance Smart Chain (BSC), is approximately $ 463 million. With this feature, Beefy Finance is one of the largest platforms in the BSC network.
What the protocol does is develop complex investment strategies for crypto holders that include liquidity pools, automated market-making services, or yield farming options. These strategies allow users to create alternative patterns where they can earn maximum income with the cryptocurrencies they own. Users try to maximize the compound and interest rates they obtain by dividing their money at the right rate among platforms that serve as AMM, yield farming, or liquidity pools.
Quick Review: Advantages & Disadvantages of Using Beefy Finance
Before we get into the details and understand how the system works, let’s take a quick look at the pros and cons. In this way, you get a general review of the platform. If you have time, be sure to examine the details, you will find points that will be useful to you.
|– Through BeFi Finance, users can easily automate their DeFi investments to generate maximum income, thus avoiding recalculation and decision-making processes every time.|
– The platform is built as a multi-chain network. Therefore, users can easily switch between DeFi services built on 14 different blockchains.
– Unlike many other systems, Beefy is built on vaults. Vaults make users being able to earn money through dozens of different protocols from a single platform, including liquidity pools, yield farms, or staking programs.
– The platform’s presence on Binance Smart Chain and the announcement of the partnership with Trust Wallet has helped both increase market value and increase the perception of reliability.
– It is worth noting that as a result of being built on the scalable BSC blockchain, the transaction fees on this platform are quite low. You will be charged between 0.05% and 0.1% for deposits and withdrawals from Vaults.
– While using Beefy, users can get a staking chance for many projects in the decentralized finance world. This is made possible by the Barn of Trust. Launchpool also allows a developed portfolio.
|– Worried attacks on BSC-based protocols may also cause users to distrust Beefy Finance to a certain extent.|
Before Diving In: What is Yield Farming and Yield Optimisation?
Before going into further detail and questioning how Beefy Finance works, it may be helpful to better understand the concepts of yield farming and yield optimization.
Understanding Yield Farming
Let’s think about it this way: when you deposit money in a bank, if you are using a time deposit account, you will have a certain amount of interest-based on the money you deposit and the time you lock. Yield farming is a similar system implemented in the cryptocurrency world. This concept, which is also defined as liquidity harvesting, means that you lend your crypto money assets to the protocol linked with a smart contract for a certain period of time. In this transaction, the lender is called the liquidity provider, and the fund to which the money is lent is called the liquidity pool.
There is a lot the liquidity pool can do with loaned cryptocurrency assets. First of all, funds are provided for the sustainability of the project. Also, the consensus mechanisms used to secure transactions within the network will be more secure the more cryptocurrencies are locked. That’s why protocols want to encourage their users to become liquidity providers. The incentive is often offered as a percentage of transaction fees, as the protocol’s governance token, or as an interest rate.
Understanding Yield Optimization
Yield optimization aims to maximize revenue with owned crypto assets. For this, the optimizing platform uses a number of data analysis and optimization techniques. To make a more appropriate definition for the DeFi world, let’s say the following: The most logical strategies to achieve higher APYs are to perform algorithmically and optimize between platforms such as different staking and liquidity pools.
Sound familiar from somewhere?
Yearn.finance (YFI), which runs on the Ethereum network, does exactly that. The system actually works like a “Smart Saving Account” that brings together the best opportunities to benefit users. Beefy.finance is just its Binance Smart Chain version.
Well, of course, with lots of differences.
Great, isn’t it?
Explaining its principle of operation, Beefy Finance underlines that it is a system that ensures that the best actions are taken for investors or farmers without the need for constant manual actions or new decisions. This system calculates all opportunities algorithmically and therefore minimizes the possibility of human mistakes in any manual calculation.
A more profitable investment opportunity not only for whales and those who know almost every tool in the industry but also for small investors. That’s what yield optimization means.
How Do Beefy Finance Optimize Yields?
Beefy Finance, which aims to find the shortest path to maximum profit with algorithmic calculations and a series of comparisons, uses a number of methods for this. The platform, which optimizes revenues through a vault system, provides security with strategies based on smart contracts.
Besides Vault, things you can leverage on Beefy Finance include Beefy Launchpool, Barn of Trust, and Strategies. We will talk about each of them one by one.
Beefy Finance Vaults – What They Do and What Are the Benefits
Beefy Finance vaults can be defined as investment instruments that use strategies determined to realize yield farming. In order to avoid the need for users to constantly make decisions and take manual actions, vaults use automation technology. This technology aims to maximize the compound interest obtained. The automated and algorithmic optimization process is repeated several times a day so that vaults add value to assets with the best strategy.
The main advantage of Beefy Finance through vaults is minimizing gas costs during transactions and saving your personal time. In other words, you will not be doing the transactions, and if you did, the transaction fees would be much higher.
Vaults working with high transaction speed can buy tokens for you, perform reinvesting, find the best investment vehicle with an algorithm based on Beefy Finance’s smart contract, and collect and sell rewards manually.
In general, what Vaults can do can be summarized as:
- They can actively apply the determined yield farming strategies.
- They can use any deposited crypto asset as a source of liquidity.
- They can use the deposited asset as collateral for lenders and borrowers in the ecosystem.
- By reinvesting earned profits, they can speed up the earning process.
- They can process any asset for a profit.
- They manage collateral securely to reduce the possibility of liquidation.
The Role of Vaults on Beefy.finance
In the Beefy.Finance ecosystem, the safes work like a kind of system core. Users regularly earn income from their safes where they load liquidity pool tokens or single assets into their safes, and the amount in their safes increases. Although its name is answered by users, in fact, Beefy Finance does not keep user assets locked in a certain vault, users can withdraw their stakes whenever they wish.
You can see the APY and TVL values of each Vault in the Beefy Finance dApp. Transacting through Vaults causes you to be subject to a transaction fee between 0.05 percent and 0.1 percent. Each Vault can have a different amount of liquidity.
- For example, the BUSD/USDT/USDC/DAI Vault has more than $84 million in liquidity, providing investors with more than 30 percent APY.
- Another Vault named SDUMP-BUSD LP offers users $95 million preposterous and on top of that, it promises a percentage return.
Each vault can work for any of the following:
- Any token parity deposited into liquidity pools (for example, CAKE-BNB LO tokens used in BSC)
- Single tokens deposited into lending platforms or single stake reward pools
Users deposit their tokens in the vault and start earning income from them. Meanwhile, users are given mooTokens to match their stake in the vault.
APR vs. APY of the Vaults
As you review each Vault, you will see the APR value as well as the APY value the Vault offers. APR stands for Annual Percentage Rate. What APY does is calculate the rate with compounding factored in and present it to the user.
Let’s think about it this way: when the compounded daily rate is 2 percent, its equivalent to annual income will be 7356.68 percent. Well, we don’t need to tell you what a big difference this is between these two values.
Let us share with you the formula presented in the Whitepaper of Beefy.finance.
In this formula, the letters mean:
P = principal amount (initial investment)
N = # of compounds per year
R = annual nominal interest rate (Decimal)
T = number of years
As you can see in the formula, the equation that enables the calculation of the return is constructed exponentially. This causes Beefy to promise much more returns than other yield optimization tools in DeFi. The equation allows a standard Beefy user to double their initial investment in the vault in as little as three years.
- Note: Users see not only the APY and APR values for each vault but also the total amount invested by users in vault. This is also referred to as TVL.
Active Vaults in Beefy Finance
There are currently more than 700 active vaults on Beefy Finance. Among these vaults that users can choose, the most popular ones can provide returns of up to 1 percent per day. When this rate is calculated annually, you will encounter a rate of almost 200,000 percent. This is an extremely powerful result.
What are MooTokens in Beefy Finance?
Imagine you go to a bank and make a deposit. The bank will issue you a receipt showing the amount you deposited. This is exactly what mooTokens does at Beefy.finance. The fact that users receive mooTokens at a rate corresponding to the money they deposit in the vault means that they have an asset for them that sort of shows their transaction history.
Let’s take an example: let’s say you log into the platform and decide to deposit BIFI in the BIFIMAXI vault. In this case, you will receive mooBIFI, which is defined as a receipt for your transaction. This token you receive may not be exactly the same as the amount of deposit you made. But don’t worry, the token value is a symbol of your proportional share in the vault. As the vault, which operates within the framework of Yield optimization formulations, earns you money through interest rates, your profit rate increases. However, the amount of mooToken sent to your wallet will remain constant. So the mooToken you receive refers to your initial deposit.
When we reviewed mooToken in general, reading user reviews, we realized that it has a number of advantages:
- First of all, each user can withdraw their own share of the funds they deposited through mooTokens whenever they want. This means financial freedom.
- Secondly, if you want to store your mooTokens in a more secure area that cannot be accessed online, it is possible to transfer them to a supported cold wallet.
- Also, good news for users who care about privacy and security: You are completely anonymous for Beefy. So how much money you have in the safe is not matched with your wallet address. Your information and the management of your funds are protected and visible only to you.
Here is the one-month chart of mooToken price (the screenshot is captured in 2022, April):
Beefy Finance Strategies – How They are Created & Work
Beefy Finance hosts a set of strategies created for vaults to use. The working algorithm of the safes is completely based on these strategies. Strategies are secured by connecting via smart contracts.
What these assets do is determine which assets are to be farmed and where the farmed assets should be sold to obtain maximum profit. Of course, this determination is fully automated, with no manual calculations or decision-making required by the crypto holder. Automation provides compounding and reinvestment of assets with regularly recalculated algorithmic equations.
- Well, can a regular user make a strategy of Beefy Finance? Don’t think of strategies as some algorithms imposed on you by others. Each user can also determine their own strategy by making conversations on the Beefy Finance Discord channel. Designing strategies also allows users to generate additional revenue.
- But what about the credibility of the strategies? Beefy Finance says each strategy is hardcoded. This means that existing code cannot be changed in any way. Stragies linked by smart contracts become untouchable once they are released. In short, not even Beefy Finance itself has the right to make any changes to these contracts, and the decentralized nature of the project demands it anyway.
Beefy Finance Barn of Trust: How It Works
Did the name surprise you? This feature, which Beefy Finance introduced in a very exciting way, attracted great interest from investors. Barn of Trust is a system that supports third-party dApps and users can earn substantial income on a given project by staking a maximum of 1000 TWT or BIFI Token. Yes, not only BIFI Token but TWT too. Because Binance Trust Wallet and Beefy Finance are partnering in this business. According to the statements made by the platform, a total of $25,000 worth of dApps tokens will be distributed to Beefy users.
Beefy Finance Launchpool – What It Is and How It Works
Then, when you examine the Barn of Trust, you now know that Beefy has a promise to support other projects in the decentralized finance world. As an indication of this, there is a “Boost” symbol right next to some Vaults. This symbol means that certain projects are vaulting their own liquidity pools, tokens, or programs that offer yield farming to users in collaboration with Beefy Finance. Called Launchpool, these vaults are primarily useful for protocol-signing related projects. Because people who earn high income from the vault related to Beefy Finance assurance will be convinced of the reliability of these projects. In addition, Beefy users meet new generation projects in a safe environment and earn income from them.
What you need to do to use a Launchpool is basically very simple:
- Enter the main app and find a boosted vault.
- Then check which cryptocurrency your chosen vault wants for staking.
- If your holdings meet the requirement, perform the staking.
- The system will give you moonToken as a receipt of the asset amount you have provided.
- Go to Beefy Launchpool, find the launch pool you staking, and take your receipt from here.
- Your transaction is complete. Now you will start earning within the framework of the APY and APR rates determined by the protocol.
How to Use Beefy Finance? – Step by Step Guide
When you enter Beefy Finance’s site, you will see a minimal design. This image may confuse you a bit and you may not be sure which of the iconic buttons to click. That’s why we have prepared a detailed guide for you. Let’s examine the details of trading on Beefy Finance step by step together.
Step 1: Choosing the Blockchain
Go to Beefy.finance and first decide which blockchain you prefer among the icons in the middle of the homepage. If you click on which one, you will see the yield farm vaults of that platform. Let’s say you prefer Fantom.
Step 2: Reviewing the Vaults
A much more detailed page will appear and you will be able to view the vaults related to the relevant project. APY values, daily values , and TVL values of each will be written on the right side of the box. You can move your cursor to the question mark next to the names to instantly examine their meanings.
In addition to the above, you will also come across some vaults with “Boost” next to them. As we said earlier, these are different projects supported by Beefy Finance that offer their liquidity pools, farms or other similar projects to users here. You can also choose them if you wish.
|What Did We Love About Vaults of Beefly Finance?|
It’s a good advantage when you’re at this step that you can see next to each vault name on which exchange it’s being used. In addition, the link you see right next to the staking vaults takes you directly to the exchange platform of the relevant token. This provides a quick and easy way to study the token’s market movements. Finally, when you browse the liquidity vaults, you see that there is a button that allows you to buy the relative token in the vault, as well as a button that allows you to add liquidity. We loved this functional structure of the system and the features that set it apart from other DeFi & yield farming optimization platforms.
Step 3: Connecting the Wallet
Now you have chosen the vault you like, it’s time to stake the requested crypto asset by making a wallet connection. To do this, you need to click on the “Connect Wallet” button. Then simply connect one of the supported wallets.
Here is the list of supported wallets of Beefy.finance:
- Trust Wallet
- Binance Chain Wallet
- Clover Wallet
- Coinbase Wallet
- Wallet Connect
- Math Wallet
- SafePal App
Step 4: Adding Liquidity or Buying Tokens
If you have the corresponding token in your wallet, you can proceed to the staking stage. For this, you can click on the “Add Liquidity” button. But if you do not have this token, you will have to buy it first. To do this, first, click on the “Buy Token” option. In this way, the system will guide you to the purchasing area. If you are trading with SING and BOST tokens, the system will automatically direct you to the Apeswap DEX. This action takes your tokens from your wallet and gives SINFG-BUST LP instead.
Step 5: Staking
Once this is done, go back to the relevant vault and click on it to see the details. There is a slider and stake button here. Decide how much of the SING-BUSD you want to stake and mark it on the percentage slide here. When you click on the stake button, your transaction will be completed.
Step 6: Receiving mooTokens
After the transaction, moonTokens will be sent to the wallet you are connected to. You can think of the moonTokens sent to you in numbers to represent whichever cryptocurrency you deposited, as a receipt document. If you wish, you can deposit moon Tokens into the pool and earn extra income. If you wish, you can use moon Tokens for your other needs.
What is $BIFI?
$BIFI tokens are known as the main asset in Beefy Finance’s system that distributes voting rights in particular. This asset, which can also be called a Divident-eligible token, allows its holders to earn additional income at determined rates.
The $BIFI supply is capped at 80,000 tokens. All existing $BIFI is available on 1inchexchange, PancakeSwap, and Binance. Users can earn $BIFI, $ETH, $BNB, $FTM, $MATIC, $AVAX, $HT, $ONE, $CELO or $MOVR using the BIFI Maxi vault. For this, it will be enough for them to stake $BIFI to the safe.
What is Beefy Allowance?
It would be wrong to say that all Beefy Finance does is maximize users’ profits. The platform also aims to increase the security of Binance Smart Chain, which it is in. Beefy Allowance platform is allows users to share projects/addresses that have an allowance to spend their tokens with Beefy.
The main convenience provided by this type of identification is this: When users want to disconnect their asset from any platform at any time, they do not have to go to the website of the platform for this. Instead, they have the ability to define or revoke permissions directly on Beefy. Token Allowance, which offers an easy formula for investors to manage their assets divided into multiple platforms, was created by forking Ethereum’s Token Allowance Checker. Explore more about Token Allowance Checker.
Is Beefy Finance safe?
Beefy Finance is currently a platform audited by Certik. When we took a look at the Certik reports, we saw that there are only 14 vulnerabilities of the platform. Neither of these was considered a critical vulnerability. These vulnerabilities, 1 of which are in the category of major, one of them in the minor, and 11 of them in the informational category, contain some fixable problems. Moreover, 7 of them have been resolved after the audit.
The security measures implemented by the platform, which is marked as “secure” by 91 percent of Certik users, and the transaction processes that keep the network strong are extremely high.
How Do Beefy Vaults Work?
Each vault represents another project that users can use for farming, staking, or liquidity provider. Each vault may be requesting a different cryptocurrency for staking. In addition, the boosted vaults on the platform are external projects supported by Beefy Finance and presented here through a protocol.
How to Disconnect My Wallet From a Project That IJjoin on Beefy Finance?
All you have to do is use the Allowance tool. Thanks to this tool, it is possible to cancel the protocols and dApps that allow the use of your tokens on Beefy without having to go to the website of the relevant project.
Which Wallets Can be Used on Beefy Finance?
Users can use Wallet Connect, Binance treacherous Wallet, Math Wallet, Trust Wallet, or SafePal App while using Beefy Finance.
What are the Different Vaults on Beefy Finance?
It is possible to say that there are two types of vaults.
-The first of these is known as the money market, and it provides users with higher earnings by using lending platforms such as Venus. Such vaults are valid for BUSD, BNB, LINK, DOT, DAI, USDT, ETH, or BTCB coins.
-The second is called native token farming and involves investing the local reward token into another asset. Users can make earning, selling, and compound profits thanks to this depositing process.
Is Beefy Finance Non-Custodial?
Users have full control of their funds when trading on Beefy Finance. No one, including the Beefy Finance platform itself, can access these funds or modify a protocol once approved and processed. In addition, the assets that users stake are not stored in a locked way. Each user has the freedom to withdraw their share of the vault at any time.