3 Most Popular Vaults in Binance Smart Chain Ecosystem
additional benefits depending on the chosen blockchain. For instance, if you use a Binance Smart Chain vault, you can not only store but also earn tokens. In this article, we will take a closer look at vaults in the Binance Smart Chain Ecosystem. First, let’s consider Binance Smart Chain itself in more detail.
What Is Binance Smart Chain?
Binance introduced its Binance Chain in 2019, and this blockchain has proven to be a great tool for quick decentralized trading, with Binance DEX being one of the most popular decentralized exchanges. Binance Chain, however, had certain limitations. This blockchain lacked smart contracts because they would congest the network in the system created for fast trading. To solve this problem and address scalability issues, Binance created a parallel, independent blockchain called Binance Smart Chain (BSC).
Created as a fork of Ethereum, BSC is compatible with the Ethereum Virtual Machine (EVM). This way, Binance managed to add the smart contracts functionality to its ecosystem while also keeping the high throughput of Binance Chain. BSC is different from so-called off-chain, or level two scalability solutions because it’s a completely independent blockchain that will work even if Binance Chain goes offline. Given that BSC is EVM-compatible, developers can easily port their Ethereum-based dApps to BSC. Besides, it means that BSC users can also use apps like MetaMask.
Binance Smart Chain is based on a Proof of Staked Authority (PoSA) consensus algorithm, which requires participants to stake their BNB tokens to become validators. Those who offer a valid block receive the fees from its transactions. The key difference from other protocols is that there is no block subsidy of BNB that has just been minted, and this coin is not inflationary. In fact, the Binance team conducts coin burns on a regular basis so the total supply of BNB decreases.
The Binance team launched BSC as a part of its ambitious plans to join the decentralized finance revolution. More and more people choose blockchain-based financial solutions as an alternative to the traditional ones. BSC became a strong basis for many DeFi solutions that offer faster transactions and lower fees than their Ethereum-based alternatives. Such dApps as PancakeSwap, BurgerSwap, and others enable users to exchange their crypto assets, vote on proposals, and participate in yield farming.
Such popular assets as BTC, ETH, LTC, XRP, EOS, etc., are already available on BSC as so-called peggy coins. These coins are pegged to the corresponding assets on native blockchains. For example, you can lock up 5 BTC and get 5 BTCB, being able to trade these coins back for BTC at any moment because the price of peggy coins closely tracks the price of native assets.
What Is a Vault?
Crypto vaults are solutions aimed to optimize yield farming strategies. Many blockchains have their vault solutions, and all of them are different. However, crypto vaults also share some basic common features. Users provide liquidity for vaults, and then vaults use these funds to increase returns, redirecting liquidity from users to yield farming strategies. This way, vaults generate rewards for liquidity providers and also deliver income in the form of trading fees and interest returns.
Binance created its BNB Vault as a part of its Binance Earn investment solution. BNB Vault works as a yield aggregator that enables users to not only deposit and withdraw their crypto assets but also earn tokens. You can get Launchpool tokens by staking your BNB and also get additional income from DeFi staking offerings, as well as other rewards. This becomes possible because BNB Vault combines income benefits of savings, Launchpool, BSC, and DeFi staking. Therefore, you can use the vault to maximize your income from both decentralized and centralized products in just a few clicks.
As the BSC ecosystem continues to grow and developers create new DeFi projects based on this blockchain, users get an opportunity to choose from among different vaults, each of which has its own specific features and advantages.
The Most Popular BSC Vaults
Autofarm is a whole set of DeFi products that focuses on yield farming aggregation and DEX aggregation on various blockchains. Created on BSC, Autofarm has also introduced cross-chain functionality with Huobi ECO Chain (HECO), and the team behind the project is planning to introduce more cross-chain features in the future.
Autofarm vaults socialize gas costs and automate the compounding and yield generation process. Autofarm was designed as a balanced solution that offers reasonable gas costs and optimal compounding frequency. To use Autofarm vaults, you don’t need to have any knowledge of DeFi so it can be a good passive investment solution even for beginners.
Autofarm doesn’t hold funds in its contracts. You can check contracts at any moment and see that they don’t hold significant amounts of funds. Your funds always either earn you more yield on the farm or are safely stored in your wallet. Autofarm also doesn’t support vault migration because of the associated risks. If some of the vaults offered by the company become less profitable, it suggests that users withdraw their funds and switch to other vaults.
This is a yield optimization tool aimed to maximize earnings from yield farming. The whole return optimization process is completely automated and based on a vault system. beefy.finance uses vaults as investment instruments that rely on smart contracts to implement strategies. Vaults perform several functions: they provide crypto assets as collateral, use them as liquidity, and manage collateral to minimize the odds of liquidation. In addition, vaults use assets to generate compound and yield profits.
Vaults are a better alternative to direct yield farming because they enable you to save on gas, reinvest earnings automatically, and maintain a healthy collateral to debt ratio. You can use beefy.finance vaults for such coins as ETH, BUSD, BTCB, USDT, DOT, and DAI. If you get a high yield on some of the popular farms, this system can also help you deposit another asset to compound, sell, and earn profits from the native token.
ACryptoS Vaults is a solution that was designed as a BSC-powered Yearn clone with the addition of SushiSwap mechanics of farming. ACryptoS has seven vaults that are farming on PancakeSwap. You can deposit CAKE or Cake LP tokens, and the vaults will compound and farm CAKE automatically. Your CAKE tokens can also be automatically swapped for Cake LP.
If you deposit your tokens in these vaults, you will also be able to stake Vault LP tokens and farm a native ACS token. Therefore, liquidity providers are able to get yields from both PancakeSwap and ACryptoS farms. As for the PancakeSwap yield, it gets automatically compounded in the vault. The company not only distributes ACS tokens across its farms but also shares a stake in the protocol with liquidity providers. Tokens that are staked in ACS vaults enable you to earn fees and rewards.
Crypto vaults enable you to optimize your yield farming strategies, maximizing your returns. Vault solutions based on Binance Smart Chain enable you to earn additional income in the form of fees and rewards. BSC offers a great ecosystem, while its transactions are faster and fees are lower than those of Ethereum-based solutions. BSC vaults can be a great choice for everyone who’s looking for secure long-term token storage and passive investments.