Beefy Finance (BIFI) is a DeFi protocol built to generate compound interest through Multichain Yield.
They call Beefy Finance the Multichain Yield Optimizer.” A yield optimizer is an app that tries to generate the maximum potential return on crypto assets for its users. Multichain means that Beefy Finance operates across many blockchains.
Beefy Finance contains smart contracts that implement a set of investment strategies. Using those strategies, they claim “Beefy Finance automatically maximizes the user rewards from various liquidity pools (LPs), automated market making (AMM) projects, and other yield farming opportunities in the Beefy Finance DeFi (decentralized finance) ecosystem.”
They claim Beefy Finance allows users to earn what they stake from either a liquidity pool or a single asset. They claim the Beefy ZAP app automatically builds liquidity pool (LP) tokens from a base deposit asset such as Binance (BNB). Beefy ZAP lets users withdraw liquidity pool tokens as a base asset, such as Binance.
How Beefy Finance Generates Compound Interest from Cryptocurrency
The main Beefy Finance products are vaults that stake crypto tokens. Each vault offers an investment strategy executed by a smart contract that automatically increases deposited token amounts by compounding arbitrary yield tokens. Hence, Beefy Finance claims to offer compound interest on cryptocurrencies.
They claim Beefy Finance can stake cryptocurrencies in 14 blockchains. Those blockchains include the Binance Smart Chain (BNB), Avalanche (AVAX), Heco Chain, Polygon (MATIC), Fantom (FTM), Cronos (CRO), Harmony, Arbitrum, Celo, Moonriver (MOVR), Fuse, Metis, Aurora, Moonbeam, and Oasis.
Users stake the tokens in the Beefy Finance vaults in the hope of generating tokens. They claim Beefy Finance gives users 100% control over the crypto in their vaults.
They claim the Beefy Finance (BIFI) ecosystem delivers compound interest through its mooVaults. The mooVaults are Beefy Finance vaults built to deliver compound interest.
Beefy Finance boasts the mooVaults deliver a growing annual percentage yield (APY) that grows. mooVaults compound APY by compounding or reinvesting the interest into the principal regularly.
Hence, the mooVaults allow for yield farming. Yield farming is a DeFi practice in which a platform harvests the yield from growing APY each day.
What is the Beefy Finance (BIFI) token?
Beefy Finance (BIFI) is the Beefy Finance revenue token. They claim BIFI holders can earn profits by staking tokens.
BIFI holders will receive platform revenue. Beefy Finance generates platform revenue from a small percentage of all vault profits. Beefy distributes the vault profits back to all Beefy stakers.
The Beefy Finance platform’s revenue sharing mechanics allow users to earn more BIFI by staking through a BIFI Maxi Vault. A BIFI Maxi Vault lets holders earn more BIFI or blue chip cryptos such as Ethereum (ETH), Binance (BNB), Fantom (FTM), Polygon (MATIC), and Avalanche (AVAX). They are limiting the supply of BIFI to 80,000 tokens to limit its value and prevent inflation.
What Value Does Beefy Finance (BIFI) offer?
Mr. Market thinks Beefy Finance (BIFI) offers some value. For example, CoinMarketCap listed BIFI as the fifth most trending cryptocurrency on 16 May 2022.
CoinMarketCap named Beefy Finance, the 401st largest cryptocurrency, with a $749.90 Coin Price on 17 May 2022. CoinMarketCap gave Beefy Finance a Market Cap of $53.993 million, a Fully Diluted Market Capitalization of $59.992 million, a $24-Hour Market Volume of $7.687 million, and a Total Locked Vlaue of $377.227 million on 17 May 2022. They based those numbers on a Circulating Supply of 72,000 BIFI, a Maximum Supply of 80,000 BIFI, and a Total Supply of 80,000 BIFI.
In contrast, CoinBase gave Beefy Finance (BIFI) a Coin Price of $751.44, a $54 million Market Cap, and a $7.8 million 24-Hour Market Volume on 17 May 2022. They based those numbers on a Circulating Supply of 72,000 BIFI.
If you are seeking a DeFI protocol with a high price, I think Beefy Finance is worth investigating. However, I am leery of some of Beefy’s claims.
Originally published at https://marketmadhouse.com on May 17, 2022.