Decentralized finance is the hot new industry for would-be millionaires, ready and waiting to accept your precious crypto monies in return for immeasurable returns beyond belief. But with the regular instruments of investments such as liquidity pools and market-making programs now getting more crowded, is there a better way for you to optimize your gains even more? For that, we have yielded farming optimizers such as what we're going to delve into our Beefy Finance review.
These optimizers make the tedious task of investing in DeFi all that much easier and more worry-free, with clever strategies to help automate your vast portfolio of assets. With services such as the likes of Beefy Finance, your already appreciative cryptocurrencies can be put to work to maximize their profitability even higher. So, what exactly is Beefy Finance, and how do these yield farming optimizers work anyway? Well, read our Beefy Finance review if you'd like to learn more.
What is Beefy Finance?
Beefy Finance – or sometimes known as Beefy.Finance – is decentralized, and thus wholly trust-less and permission-less yield farming optimizer. Natively built on the Binance Smart Chain (BSC), they have a total value of liquidity and collateral locked of around $463-million within its protocol, making it one of the largest platforms built on the BSC as of writing this Beefy Finance review. They are a multichain network, bridging with HuobiEco, Avalanche, Polygon, and Fantom blockchains.
As a yield farming optimizer, Beefy Finance's goal is to design and create a series of investment strategies powered by smart contracts, which then utilize various liquidity pools, automated market making (AMM) services, and other yield farming opportunities together. These strategies would essentially find the best place in which users can invest while also offering the ability for your funds and returns to be compounded and reinvested without you having to do it yourself.
How Does Beefy Finance Work, and What Makes It Special?
By automating those investments – i.e., letting the smart contracts automatically manage your gains and assets – Beefy Finance is able to help its users maximize their returns, as manual interaction with the fast-moving world of DeFi can be risky. It requires you to properly time and plan your stakes in these investments, whether it's a liquidity pool or yield farms, in order to gain the most from them. Beefy Finance's first investment strategies, The Vaults, went live on October 8th, 2020.
The creators behind Beefy Finance were purportedly inspired by Yearn.Finance. That said, Beefy Finance is by no means the only yield optimizer within the blockchain space right now. So, what exactly does Beefy Finance do differently in how it programmatically strategizes its pools and farms to optimize the best returns for its users?
In our Beefy Finance review, here are a couple of noteworthy specialties that Beefy Finance has over its competitors.
1. Flexible Multi-Chain Networking
While many yield optimizers today operate within a single chain, mostly either Ethereum or the Binance Smart Chain, both of which are the top for DeFi-based applications. Some others may offer dual-chain support between these two blockchains, respectively. However, Beefy. Finance can seek out the very best and most lucrative investments out there because it exists across five unique blockchain networks, as we mentioned earlier, which opens up more opportunities for its users.
2. Specialised and Unique Investment Strategies
Aside from the fact that Beefy Finance can find a diverse variety of investment chances across a large multi-chain ecosystem, it too offers unique and distinct strategies of its own that you can't get elsewhere. For example, there are some liquidity pool pairs, and vaults that boast very high returns compared to rivals'. This is made more attractive thanks to Beefy's own native cryptocurrency, BIFI, which we'll discuss later.
3. Greater Security and Accountability
Just as important as offering users a platform that can make them a lot of money, is first trying to get them to trust you. As such, Beefy Finance employs more than 10 smart contract developers – at the time of writing this Beefy Finance review – who carefully test and review each vault and feature.
Not to mention its open-source code is made widely available for testing and bug fixes, as well as an official partner of the Trust Wallet which is also the official wallet app of Binance.
4. Fast and Cheap Investment Strategies
On top of how Beefy Finance works, they are quite efficient at it, too. Their yield optimizer can repeat the process of reinvesting or compounding your assets as many as thousands of times per day, rapidly moving assets to maximize your potential returns. Moreover, all the compounding fees within the network and its vaults are amortized among all of those vault participants, thus making Beefy Finance a lot cheaper to use than some of its rivals.
In all, the fee charged by default for using Beefy Finance's Vaults is a performance fee. Each Vault will have its own fee, which takes 4.5% of the harvested rewards. This 4.5% fee on the profits earned is then divided: 3% is distributed back to the reward pool, and subsequently awarded to all BIFI token holders; 0.5% to Beefy Finance's treasury fund; 0.5% for the strategist that designed the particular Vault; and the last 0.5% to the person calling the harvest function.
What Can You Do to Earn on Beefy Finance?
Now that we understand more about Beefy Finance and what they are and what makes them unique over other yield optimizers, we should have a look through what they offer to its users and what you can do with them. Here are their four main products, accessible through the Beefy Finance dApp
The way Beefy Finance works is quite simple. Its main offering, the Vaults, each has its own strategy, which involves best optimizing – or farming – for returns based on your assets. This could either be farming the rewards from your staked assets and reinvesting them back into a liquidity pool or compounding the amount of interest gained to effectively increase the number of assets you have staked and thus allowing you to increase your potential yields.
This entire process is automated and repeated several times a day for every single Vault to try and harvest returns from those liquidity pools, money markets, and yield farms. Without yield farming optimizers, this process would've been done manually. However, this can result in inefficiencies such as having to spend a lot of time, costing plenty in transaction fees, not being able to maintain collateral to debt ratios, and not being able to quickly optimize and reinvest those returns in a timely manner.
The first thing you see on Beefy Finance's dApp is the Vaults, where you can see their respective APY and TVL values, however, do note that a fee of between 0.05% to 0.1% is charged when depositing or withdrawing for all Vaults. Some Vaults, such as the ‘BUSD/USDT/USDC/DAI,' have more than $84-million in liquidity, offering still high 30+% APY in returns. Others, such as the ‘SDUMP-BUSD LP,' offer a seemingly preposterous 95-billion+ % in gains. Note, high returns always signal high risks.
The bedrock for how those Vaults are able to work is dependent on things called Strategies. Strategies are immutable and hardcoded smart contracts designed to essentially tell what assets to farm and where to sell those farmed assets. With automation, this is then compounded and reinvested. Regular users can make their own Strategies by first communicating with the Beefy Finance Discord channel. With this, those users who design the strategies which vaults rely on can earn a portion of the fees.
3. Barn Of Trust
Apart from just their own dApp, Beefy Finance is also keen to invest and incubate other projects as well. As a partner of the Trust Wallet by Binance, Beefy Finance allows users to stake a maximum of $1,000 TWT or BIFI tokens in the Barn Of Trust – or Barn Trusts – which will help to support third-party dApps. In return, those users can get a proportional return in the tokens from that particular project, with a total of $25,000 worth of said dApps tokens being distributed to Beefy users.
A continuation of Beefy's commitment to helping other projects, you might notice a “BOOST” symbol next to some Vaults. These are, in fact, protocols that are partnering up with Beefy Finance to list and promote their own pools, tokens, and farms. These Launchpool vaults can aid new projects to gain better credibility as Beefy Finance remains one of the most popular yield optimizers on the BSC, while users can equally earn a lot from the high returns that these Vaults offer.
What Is Beefy Finance's Native Cryptocurrency Token?
The main cryptocurrency of the Beefy Finance network is BIFI, which is built as a BSC-native BEP-20 governance token. As such, users can stake these BIFI tokens in governance pools or the BIFI MAX Vault to put forward proposals and vote on network-wide changes. Other than decision-making, we've highlighted earlier in our Beefy Finance review that BIFI token holders can earn a portion of the performance fees that are collectively paid out for the Vaults.
The tokenomics of Beefy's BIFI tokens are meant to be deflationary, with a supply cap of just 80,000 BFI. 72,000 BIFI tokens were distributed amongst the community, with the remaining 8,000 BIFI locked for the founding team. Since their inception, BIFI tokens have soared to their current price as of this Beefy Finance review, standing at $724.36. With a market capitalization of $52,154,026, this makes BIFI the 474th-most valuable cryptocurrency.
Beefy Finance Review – Conclusion
Altogether, our Beefy Finance review has had a very glowing reception of its network, and the overall diversity of the Vaults it has on offer, mesmerizing profits for its users, as well as the myriad of smaller touches here and there that perfectly complete the experience on Beefy Finance. The only criticism we can make, and it's through no fault of Beefy, is whether the BSC as a whole has flaws following a recent major flash loan exploits against fellow yield optimizer, PancakeBunny.
Otherwise, there's a lot that you can do on Beefy Finance if you'd like for an easy way to automate and maximize your returns across DeFi as best as possible, without having to worry about lofty fees or taking up precious time to manage your cryptos. Being able to swap between blockchains at a click is quite a handy bonus too. Our Beefy Finance review can conclude with the thought that this may very well be one of the best DeFi yield optimizers out there.
Beefy Finance Review
- Ease of Use
- Project Values
- Tokenomics Model
- Long Term Sustainability
- Users can very quickly automate their DeFi investments and asset management, such as compounding or reinvesting returns.
- Built as a multi-chain network that can instantly switch between DeFi projects – liquidity pool, AMMs, farms, etc – on 5 different chains.
- Offers a huge variety of different Vaults with lucrative returns, and specially designed Vaults are made exclusive on Beefy.
- Added credibility and trustworthiness following a partnership with Binance's Trust Wallet, and an active team of developers.
- Offers lower fees by comparison with other rival platforms, and lower overall network fees as Beefy is built on the more scalable BSC blockchain.
- Users can easily take part in investing in other projects outside of Beefy through Launchpool and Barn Of Trust.
- Concerns over security following several major exploits like flash loan attacks against BSC-based protocols.