In the new age of decentralised finance (DeFi), there are new and inventive ways to use the blockchain as opposed to dinosaur/legacy financial instruments that are clunky, slow and yield non-existent returns.
Cryptocurrency and in particular the DeFi revolution that is currently ongoing, with plenty of fuel left to burn, is creating a financial system that is fair, quick and with bountiful returns. Did I mention its decentralised?
Instead of interacting with the bankers, insurers, brokers and any other person in a suit, DeFi is you, interacting with a contract, and a smart one at that.
Smart contracts built on the blockchain are digital tamper-proof agreements, which as mentioned above, allow you to conduct regular, and sometimes not so regular, financial tasks with ease and with no requirement for trust whatsoever. Code is law, and it’s also open-source for everyone to see. No ambiguous contracts around here…
The product of all this coming together has led to over $40 billion locked in DeFi smart contracts, this number is up 4000% from the same day of last year.
So now we understand why it is better than the regular financial system, what can it do for you and your crypto and money.
Well, in the middle of last year a guy called Andre Cronje released a protocol called Yearn Finance (YFI). You may have heard of it. The reason you may have heard of it is that it went from around $40 to over $40,000 in less than 2 months… I know ridiculous.
Getting back to DeFi, there is a practice called yield farming. “It’s not much but its honest work”. This is when the ‘farmer’ deposits stable coins like USDC USDT, BUSD, DAI etc. into liquidity pools. By depositing their funds into these pools, the farmers are rewarded in interest for doing so. This can be in form of more of the same coin, or a different coin.
Where are the interests coming from you ask? Well the money that is put into the liquidity pools, provides liquidity to other people who want to use or borrow that particular coin. Think of it as lending your money to someone and you get back a little on top. But in yield farming, lots of farmers come together and put their funds into a smart contract which can then be accessed by others who wish to use that particular coin. You, following?
The genius of yield farming is that the farmers will actively seek the best paying interest liquidity pools. As you can imagine the tokens that have the highest demand will effectively pay the highest returns. So it pays to move our money around.
But, as you should know by now, a lot of these smart contracts are deployed on the Ethereum network. What does that mean… All together now… “High gas fees!”
Each time you interact with a liquidity pool you pay for it in ETH, which is currently a very expensive transaction indeed, because of congestion on Ethereum.
Cronje, was one of these yield farmers, although he also has an extremely strong background in computer science. When we say strong, we mean, finished his 3-year degree in 5 months, type of strong…
So as you can imagine, Cronje sought to fix the problem of constantly having to find, move and then pay to get into the best-paying pools. Just like that Yearn Finance was born.
A yield optimiser as the name suggests, optimisers your funds to generate the best yield. Automatically seeking out the best returns for your money, whilst removing the need for constant removal and reentering and consequently removing excess transactions and gas fees. Win, win, win.
So why are you talking about YFI, the Ethereum blockchain and farmers…
Well… Beefy finance builds upon the yearn finance protocol, but with a few key differences.
Beefy Finance or BIFI, is built and deployed on the Binance Smart Chain (BSC).
As BIFI uses the BSC, the fees to use their vaults are tiny… like, less than $0.10
Beefy automatically compounds your daily interest! Reinvesting the interest. AMAZING STUFF.
The recent rise in the price and value of BIFI is quite remarkable. Since its launch in late 2020, the lowest price we saw it at was $75 and for full disclosure, we jumped in headfirst. Not financial Advice.
It is now about $1500 per BIFI less than 2 months after the fact.
Tokenomics of Beefy
There are 80,000 BIFI tokens, so yes, a very low supply. There are a few kept for the developers to help progress the project and for their own incentives, although these are time-locked, meaning they can’t just cash out their funds as and when they feel like it. Very very fair and transparent.
Remember YFI? They have a 30,000 supply of tokens… do the math.
What is it?
In its most basic form, Beefy allows all for very easy access to seemingly complex DeFi protocols, allowing users with little-to-no experience to get in on the amazing yields from their vaults and pools.
Trust me when I say, little-to-no experience. If you knew my friends, you’d understand… if they can do it, you definitely can too.
Let’s take a look at some of their vaults in action. Oh, and how great is the user interface. I really love Beefy Finance, if you haven’t guessed already. Their goal aligns with our own goal here at blocmates. Remove that barrier to entry for investors of all capabilities.
The top vault is the Beefy Maxi vault.
This is where you can deposit your BIFI tokens and earn interest, in BIFI. A quick maths refresher now… Currently, the daily interest on the Beefy Maxi vault is 0.02% daily. Although, as we mentioned, this is compounded.
So for a $100 deposit in BIFI, after 1 day you would receive 0.02% interest on your deposit. The following day you would then earn 0.02% on your new balance, hence the compounding. All this is done automatically, which is the beauty of Beefy Finance. Over a year, this would equate to 8.15% APY.
People exiting the vault pay a 0.1% fee on their withdrawal, the fees are then distributed to the rest of the people in the vault. This creates an incentive to stay in the vault, as you will get more rewards if people leave.
The maths wizards amongst us will have guessed that this also means, the more people in the vault, the more people the spoils has to be shared by. Nothing gets past you now does it…
But overall, the compounding gains on an already increasing price of BIFI, is a no brainer.
So what about the other pools, with the two coins joined by a ‘-’ and have an LP on the end?
These are liquidity pools (LP).
In this example below, you could provide ‘liquidity’ by adding SOAK and BNB. We will go through how to do this later in the article. The ridiculous APY and daily interest will immediately jump out at you. They are hilariously great and yes you might have guessed, they come with a slight risk…
Impermanent loss. This will be fun trying to explain…
Keeping with the SOAK-BNB LP example, you deposit a 50:50 ratio of SOAK and BNB in the pool and in return you get a SOAK-BNB LP token. Think of this as a receipt for the time of the deposit. If the receipt was real, it would say the price of SOAK and the price of BNB at the time of the deposit.
The SOAK-BNB LP token amount reflects your contribution to that overall pool and is proportional. More contributed? Well, you get more SOAK-BNB LP tokens.
Keep the receipt in mind. The best outcome is for the price of both SOAK and BNB to stay the same as when you deposited. You can remove your SOAK and BNB from the pool at any time, which we will show you how to do below.
Why do we want the price to stay the same? If the price stays the same for both SOAK and BNB then you can happily earn the lovely LP daily returns and make a pretty penny. 8% a day on $10,000 is $800, not too shabby.
But, if it was that easy, I wouldn’t be writing this blog…
If the price varies on one or both tokens then your receipt (SOAK-BNB LP token) may now be worth less than if you were to just hold them and not provide liquidity. It’s like you’ve bought something in a shop, go to return it and find it has been discounted and now they can only refund you the discounted amount. Hopefully the interest you’ve made offsets this and it often does!
Apologies if that still doesn’t make sense. As a rule of thumb, stability in LP tokens is good. Fluctuations aren’t great but high APY/daily interest can offset this. Yieldwatch.net can help you track your impermanent loss. We will show you how to use this below.
It is worth noting if you only stake an individual token, you will not be subject to impermanent loss. It is when you start with the CoinA-CoinB-LP tokens when you can be exposed to impermanent loss. So don’t worry if you are putting your BIFI in the Beefy Maxi vault. It’s all good.
So if you can deposit other tokens on beefy finance, where does the value of the BIFI token come from? As with a lot of tokenised assets in cryptocurrency, they tend to serve a purpose.
The BIFI token is a governance token, which means that holders of the token can vote on the future and direction of Beefy Finance. How cool is that? This creates an obvious incentive for the holders to act in the best interest of the project as, if the project succeeds the value of the governance token will naturally increase. Power to the people.
The Beefy Cowmmunity is also a very accepting and not extremely emotional one. This is a huge bullish sign (pardon the pun). When you enter a projects Telegram and Discords etc. and their community is very emotional, non-accepting and constantly arguing, it is not a good sign.
Cryptomarkets are highly emotionally driven. Pumps and dumps are built on emotion and sometimes not a lot of logic and reasoning come into it. So a stable and mature community is a big tick in my book.
Shut up and tell me where and how to buy it!
Right, here we go, strap in.
If you have MetaMask configured to Binance Smart Chain skip to the Pancake Swap section.
As we mentioned above, we don’t want to use the Ethereum blockchain as the fees are too high at the minute. So we need to configure the MetaMask wallet to work on the BSC.
So, go to the top, click ‘add custom chain’.
In the corresponding boxes fill in these fields:
Network Name: Smart Chain
New RPC URL: https://bsc-dataseed.binance.org/
Block Explorer URL: https://bscscan.com
Once you fill this in you should select the newly made Binance Smart Chain instead of Ethereum. I repeat. You need to ensure you are on the Binance Smart Chain and NOT Ethereum. If you send funds to Ethereum you may lose your investments. Check and double-check.
Did you check you are on Binance Smart Chain? Okay, cool.
Once you are on the smart chain on your MetaMask. Click the address at the top to copy the address. This is the address you will receive your BNB from Binance on.
Go to Binance and click ‘withdraw’ on BNB. Select the BSC(BEP20) to withdraw your BNB to MetaMask. Again, ensure you have clicked BSC and BEP20 or you will potentially lose your funds.
Paste your MetaMask address into the recipient’s address in Binance. Select BSC and send the desired amount of BNB to your MetaMask. You may find it easier to do this using your phone (Binance) and MetaMask (browser).
This should take less than a minute to receive BNB into your MetaMask.
TIP- As you are now using the BSC all transactions will use BNB to pay for fees. Always keep at least 0.01 BNB if you wish to trade, stake or transact on BNB. These will pay for the fees.
Let get those coins! This walkthrough will go through:
How to buy Beefy Finance using pancake swap and MetaMask.
Open Pancake Swap and click trade, then exchange.
Connect your MetaMask using ‘connect wallet’ at the top left on Pancake Swap.
BNB should be in the top box.
A lot of coins will be able to freely trade if you open the bottom box you can select them by typing in the coin name.
Now you can type in the top box, how much BNB you want to swap for BIFI.
Remember to keep at least 0.01BNB for trading on BSC/Pancake swap.
Click approve trade and MetaMask will ask you to approve and then confirm the transaction, giving you a gas fee in BNB.
Note – Whenever you see the words ‘ETH’ whilst you are using the newly configured Binance Smart Chain on MetaMask, forget it and imagine it says BNB. All transactions are using BNB on the Binance smart chain, it is just leftover text from the Ethereum main net which is the default on MetaMask.
The final step is to go to your MetaMask, click add a custom token.
Paste the Beefy Finance address in the custom token box. You get from BSCscan.com
Search Beefy Finance to find the correct token address. You can always cross-check this with the beefy finance address from their website.
Paste this address into the custom token box on MetaMask.
Now you should see your newly bought BIFI tokens in your MetaMask wallet.
You are now a fully competent DEX trader well done! It wasn’t that hard, was it?
Keep reading for how to deposit Beefy into the Maxi pool and earn interest!
This process is the same if you want to use Uniswap or Sushiswap to get ERC-20 tokens which are built on Ethereum. But what do you need to remember? That is correct, switch to Ethereum main net if you want to purchase ERC-20/ETH built tokens using DEX and MetaMask.
Just remember to switch back to the smart chain when you come back to the smart-side and avoid those high ETH gas fees.
Now you are competent at sending, receiving and trading on a DEX using MetaMask, you could consider donating to our MetaMask address in BNB. It helps to support the channel by allowing us to focus more on generating content for you to be able to become more and more crypto-competent. It is a big help.
Our BSC – MetaMask address is
No worries if not, this service is free and always will be.
How to use the vault is below…
You can use this same procedure to buy any tokens on BSC. Use pancake swap or bakery swap as the DEX and connect your MetaMask.
Get in touch with us via the Telegram if you need any further information, we are here to help, no strings attached. As always DYOR before any purchase.
Ohh… How did you say you deposit it in the Beefy Maxi vault again?
So now you are a BIFI holder…
Go to app.beefy.finance and click launch app.
At the top, you will see the Beefy logo and a vault saying “BIFI Maxi”.
Click connect wallet and select MetaMask.
Following this, you will be able to see your BIFI balance in balance section in the Beefy Maxi vault.
TVL is total value locked in all Beefy Vaults! Impressive for a protocol that only launched in late 2020!
As you may expect, you can then select how much you want to place in the vault.
Be sure to approve AND confirm the deposit. This will be twice MetaMask pops up and asks you to confirm.
To confirm this is correct you will see your balance go to zero whilst your deposited balance will be your BIFI amount.
You are now done. Sit back and watch your returns roll in.
You can track the yield by using yieldwatch.net and paste your MetaMask address in the search box.
I will write a follow-up article to this show you how to deposit LP tokens for the other vaults on Beefy Finance so be sure to turn the notification bell on or join our Telegram
This post will go hand-in-hand with our How to find a 100X gem post if you haven’t already read that, you can access it HERE.
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