Binance’s new yield farming platform has breathed new life into its token, BNB. And it could bring DeFi principles to a wider audience.
Since the launch of Binance Launchpool last Monday, dozens of additional DeFi projects have flocked to the platform, attracting hundreds of millions of dollars of investors’ money. And Binance’s own token, BNB, rose from $19 to $30 in about a week, a 57% increase.
That’s what happens when the world’s largest cryptocurrency exchange (by most conceivable metrics) gets into decentralized finance, the umbrella term that comprises non-custodial financial services, such as lending protocols and synthetic assets. In its endeavor, Binance is taking on Ethereum, the blockchain that currently houses almost all of the top DeFi projects.
How is Binance Launchpool taking on DeFi?
Specifically, Binance Launchpool brings yield farming, a lucrative DeFi mechanic popular on Ethereum, to its website.
Here’s how yield farming works: stake cryptocurrency within a DeFi project’s smart contracts and the protocol will perform some action, like lend it out or use it to fund a liquidity pool. This will generate some interest on your investment, and on top of that you’ll get the smart contract’s native token—that you can sell for a profit. Read More