Binance Chain is getting its own DeFi yield farms after Ethereum

Binance Chain is getting its own DeFi yield farms after Ethereum

Photo by Alex Wigan on Unsplash

For the past few months, decentralized finance (DeFi) has blown up. Coins pertaining to the space have rallied exponentially while the value of cryptocurrency locked in DeFi contracts has similarly skyrocketed.

The thing is, most of this growth has been relegated to Ethereum — and Ethereum only.

Other blockchains lacked the developers, users, and capital to go after DeFi, which is an industry inherently based on network effects.

But this is rapidly changing with the launch of Binance’s Smart Chain, which will enable Binance Coin and the Binance ecosystem to have its own DeFi bubble.

Binance goes DeFi with launch of “Binance Smart Chain”

For over a year now, crypto exchange giant Binance has had its own blockchain: the Binance Chain, whose native token was BNB. The issue was, that chain did not support smart contracts, only allowing BNB and other coins to be transacted.

This changed on Aug. 31 with the introduction of Binance Smart Chain, a blockchain-based on Binance Chain that can facilitate smart contracts in a manner that is Ethereum Virtual Machine compatible.

“Created to run parallel to Binance Chain, BSC enables the creation of smart contracts for tokens on the Binance-branded blockchain. It also introduces an all-new staking mechanism for BNB, one of the world’s top cryptocurrencies,” a press release read on the matter.

While nascent, Binance Smart Chain has already seen a strong uptick in users who are using the network’s first DeFi protocols.

First and foremost, there’s BurgerSwap, which is meant to be a Uniswap (a.k.a. the leading decentralized exchange) for the Binance Smart Chain. BurgerSwap’s team has asserted that it is not a fork of Uniswap. BURGER can be farmed by buying the coin, then staking it in the project’s governance module.

Secondly, there’s Spartan Protocol, which is looking to become the Synthetix of Binance Smart Chain. Spartan Protocol is aiming to offer decentralized derivatives, but will also integrate a decentralized exchange and money-market, similar to Aave.

And lastly, there’s Cream, which is operating on both Binance Smart Chain and Ethereum. As reported by CryptoSlate previously, Cream is a fork of Compound aiming to differentiate itself with a full-stack suite of DeFi products. The coin has seen success thus far, garnering adoption from prominent venture capitalists in the space and DeFi innovators.

There are likely other Binance-based protocols, but these are the three primary ones at the moment.

Will they succeed?

While Binance Smart Chain’s DeFi ecosystem is nascent, there is some thinking that it will succeed.

Andrew Kang of Mechanism Capital, who has been touting Cream’s launch of Binance Smart Chain, recently asserted that he thinks other layer-one blockchains will gain traction within DeFi in the short term:

“It’s pretty evident that DeFi will exist on other chains for at least the short term. Other Layer 1s will have their own unresistable pumps and 5000% APY yield farms. Not looking forward to bouncing funds from chain to chain using CEXs as bridges 20 times a day.”

Commenting on Binance in particular, Kelvin Koh of Spartan Group, a crypto hedge and venture fund, said that Binance Smart Chain could play a key role in DeFi moving forward.

Posted In: , Altcoins, DeFi

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