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Although the blockchain and cryptocurrency industries are still relatively young, no one can doubt that they are full of potentials. They offer almost endless possibilities, and evidently, they are revolutionizing nearly every industry out there. Even at that, the most exciting thing is we’ve barely scratched the surface.
As the DeFi has been rapidly gaining traction over the past few years, we witness a vast range of new possibilities every month. More and more people are now locking their values in the DeFi protocols, and several innovative technologies are coming into existence. Indeed, the BiFi token holders will not miss out on the versatile functionality this ecosystem has to offer.
In case you are still wondering whether or not to give BiFi a trial, you’ll definitely have no doubt anymore at the end of this review.
What is BiFi?
Simply put, BiFi is one of the most comprehensive, transparent, and flexible platforms you can find out there in the DeFi space. It is a platform that allows its users to lend, save, and invest in multiple digital assets — Tether, Ethereum, and even BTC inclusive.
In short, BiFI is a platform that offers three primary services; lending, pooling, and staking. You can deposit the BEP-20 and ERC-20 assets which can serve as collateral for you to borrow more assets. At the same time, you also decide to become a liquidity provider for BiFi-ETH and BFC-ETH pool on Uniswap and stake LP tokens. Also, you may stake BFC tokens on this platform and more.
BiFi is a project powered by Bifrost multichain technology. It promises to serve as a platform that facilitates interoperability and connects any blockchain to another blockchain. As mentioned before, its capabilities are not limited to the Ethereum ecosystem; it is an innovation that can easily connect the ETH network to BTC, Binance smart chain, Klatyn, TRON, Polkadot, among others.
Although ETH is already as significant as it is, of course, the entire cryptocurrency industry is significantly bigger. BiFi services as a medium to connect the industry into a network through multichain connectivity. Thus, with this innovation, the decentralized ecosystem would no longer be tied to ETH only. In essence, BiFi is quite a promising innovation, as obviously, it is walking through the paths of solving the fundamental societal challenges of CeFi.
This project is earnest about revolutionizing and transforming the cryptocurrency and blockchain industry into the best versions they can be. And evidently, more people are aligning with the innovation, as we can see in the partnerships with multiple reputable stakeholders in the industry, such as Chainlink, Tokamak, among others. So it’s definitely one you might want to give a trial.
Features and Options
Lending protocol
The BiFi lending protocol unveils a universe of open financial applications with its algorithmic and autonomous money market protocols. The principal objective of any DeFi lending platform is to offer loans in the form of digital assets and a trustless manner i.e., without a need for intermediaries. As a user, you can enlist your crypto coins on the platform primarily for lending purposes. And affirmatively, BiFi is doing this pretty fine.
The most common approach to lending in the crypto space is peer-to-peer. However, BiFi is taking a step away from the norms with its pool-based approach. This approach is a proven technique to improve liquidity, ensure transparency in interest rates, minimize risks and handle the entire lending process without needing a counterparty. As mentioned before, this approach will eventually let users deposit the assets of a particular blockchain and borrow another, all these in the absence of a centralized intermediary.
BiFi interest rates are pretty reasonable and transparent. It determines this via a set of algorithms using the relevant asset’s demand and supply. Provided that that asset’s market deposit increases, then the interest rate will go down. This makes borrowing more beneficial for you. Again, if the amounts borrowed increase, the interest rate goes up. Thus, the rates are one of the best you can find in the market today.
Deposits on BiFi
Anytime you deposit your assets to the lending protocol, BiFi aggregates it into a pool where others may borrow. Any asset you deposit will keep generating interests according to its interest rate determined by demand and supply. In contrast to p2p pending, you can withdraw your assets anytime you deem fit. Besides, this also works similarly to traditional banks as you can earn interest on your idle assets while taking almost no risk.
Borrowing
Once you deposit your assets, you can also use them as collateral to borrow another asset. Sounds interesting, right? Like deposits, any asset you borrow accrue interest according to the interest rates determined by the market demand-supply. Again, another thing that differentiates this approach from p2p lending is this collateralized method lets the users borrow funds without specifying some terms, such as the maturity date.
The platform calculates your collateral ratio to determine the amount you can borrow with your deposit. For instance, if you deposit an asset worth $100, with an 80% collateral ratio, you can only borrow up to $80. This implies that you cannot borrow more or withdraw deposits if it makes the collateral value exceeds this ratio. However, if you still want to borrow more, you must deposit more or repay the previously acquired loans to lower the ratio.
As this collateral borrowing signifies, you will agree that it is a smart approach to borrowing. Besides, it also gives way for more financial flexibility for individuals and strategies for cryptocurrency traders. For instance, if, as an individual, you wish to hold USDT but need ETH for some purposes in the short term, this platform enables you to borrow ETH while using your USDT as collateral. On the other hand, suppose you are a long-term trader, there are also strategies you can adopt to get the best of your digital currency.
BiFi staking protocol
Over the years, staking cryptocurrency has become a well-received method among crypto investors to earn some interest in their assets. With this approach, you can lock up your digital assets by staking it. It is a means of contributing to the growth and maintenance of the platform, as low liquidity may ultimately denote instability.
The staking protocol creates a liquidity pool that proportionately distributes pools of staked earned rewards to the stakers/liquidity providers. You can sell these rewards for a financial profit or use them as payments for the multichain DeFi products and services.
As a staker, your asset will be the foundation for setting up a decentralized exchange, which allows the automated trading of various cryptocurrencies. With this process, you should be rest assured of safety. Unlike the centralized, you can carry out the whole operations without a third party, hence, eliminating associated risks, such as wash trading, hacking, and fraud.
The Token: BiFi, And Its Use Cases
BIFI token is BiFi’s governance token. As a holder of the BIFI token, you have the right to vote on proposals to improve their services. Besides, you will also be able to use this token for several financial activities such as insurance, trading, and investment. The token will also serve as a fee whenever you use the multichain services. Because the platform is built on the multichain middleware platform, Bifrost, it must pay a particular amount of BFC (Bifrost Token) when using Bifrost.
How Can You Earn BIFI?
There are three primary approaches to earning BIFI tokens:
1. Earn them by staking (BFC) or liquidity pool mining (BFC/ETH) on BiFi
2. Earn as an incentive for using the service lending (deposit, borrow), staking (BFC), pooling (BFC/ETH or BiFi-ETH), which is a reward for its service users who lend or borrow assets.
3. Buy BiFi tokens on exchanges
Where Can You Buy BIFI?
BiFi has listed its token on multiple crypto exchanges. However, unlike several other main crypto assets, you cannot directly purchase them. You need to do so via exchanges. This token is available on several major exchanges like Uniswap, gate.io, among others.
How Does BiFi Work?
In essence, BiFi allows you to deposit your digital assets and get reasonable interest rates than the traditional bank. As it is in the DeFi space, it will enable you to borrow cryptocurrencies instantaneously and repay interests on the loaned assets with the corresponding crypto coin.
You get to generate interest in several ways. For instance, you may decide to deposit USDT and use it as collateral to borrow ETH. You can also use the borrowed ETH to borrow more and more assets, using them as collateral. Going about this process multiple times is called yield farming, which helps you leverage your initial capital several times to get a higher return if you look at the long term. Meanwhile, you are still earning interest on your deposited USDT. Besides these, as mentioned earlier, you may also earn tokens as a return of your investment on staking, pooling, and lending.
Why BiFi?
The DeFi space today exists as fragments. The services are available on multiple block chains, like Binance Smart Chain, Avalanche, and Ethereum. However, one primary issue is that they cannot interoperate between them. Powered by Bifrost multichain technology, BiFi is here to give you the best of all worlds. You can use multiple coins and tokens from various blockchain and protocols on it. Through this blockchain interconnectivity, BiFi tends to significantly reduce gas fees while improving accessibility and extending the ecosystem reach to make more innovative financial products available to more individuals. Besides, you get to enjoy the benefits offered by the blockchain integrated into the multichain. For instance, Ethereum provides security and reliability, while BSC provides high performance and cheap transaction fees. Now imagine getting the best of both worlds in an innovation. Interesting!
One of the significant issues facing the blockchain space today is security. We keep hearing and seeing more news about successful hacking attempts on various platforms. In essence, frauds and hacks have significantly tainted the ecosystem. However, BiFi has a team of professionals, like researchers, hackers, and security experts, who can maintain the maximum security standard and ensure that your assets are safe. So, with BiFi, there is no cause for alarm; you can securely put your assets to work. With the range of benefits and incentives BiFi has to offer, you should undoubtedly want to give it a chance.
Getting Started on BiFi
BiFi aims to connect every blockchain to create one uniform and coherent financial ecosystem. Gradually, it might even still extend the reach of its financial services to funds, insurance, derivatives and make an absolutely new set of DeFi services and products.
On exploring the features and options available on BiFi, alongside the benefits it has to offer, if you believe its vision aligns with your goal, you may want to give it a trial. Here’s how to get started.
Check out the BiFi guide here: https://docs.bifi.finance/guide/
*All content on this site is information of a general nature and does not constitute professional and/or financial advice. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information from the article before making any decisions based on the information in the article.
BiFi Review 2021: A Promising Innovation Solving Fundamental Societal Challenges of Cefi was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.