Before starting talking about the projects let me make it clear that this, not financial advice nor is it an endorsement of any of the projects I'm about to mention. While I've used all of them personally, I suggest you take the time and do your own research on those projects before investing. I'll also urge you not to invest money you're not prepared to lose, I know you hear this every day but a little reminder won't hurt.
A quick intro to BSC
Binance Smart Chain or BSC for short is a blockchain created by the engineers at Binance Exchange one of the biggest centralized exchanges out there. There are two main attraction points to BSC:
- Compatibility with the EVM (Ethereum Virtual Machine) so any smart contract written for Ethereum will work with minimal changes on the Binance Smart Chain
- Small Gas fees that range between $0.15 and $1 depending on the transaction. The last time I used Ethereum, two weeks ago, the transaction fees were between $75 and $100.
You might be right to ask what's the catch and the truth is that there are two catches which depending on how much you value your privacy and anonymity they might be a total deal-breaker for you.
- There are only 25 validators (or at least that was the number last time I checked) and they are appointed by Binance. So even if they are not Binance they have some sort of relation with the exchange behemoth. A lot of people had accused BSC of not being decentralized and they're right. Binance Smart Chain is not decentralized, but it never pretended to be.
- The bridge between Ethereum and BSC is controlled by Binance and has been down for quite some time. The only way to extract the funds out of the BSC is to pass them through the Binance Exchange itself.
As you can see there are major benefits and downsides to using something like BSC, but we'll leave this discussion for some other time. I just wanted to give you an idea of what BSC is and why some people are using it and some don't. I for one don't like BSC, but I also can't use Ethereum with the money I have right now and unfortunately, BSC has probably the second most vibrant DeFi ecosystem out there which is why as much as I like decentralization I have to admit that Ethereum is a poor implementation in its current form.
Binance Smart Chain DeFi
There are probably hundreds of DeFi projects launched on the BSC with many more launching daily. Because of the low fees a lot of people transitioned from Ethereum to BSC, I included, in order to take advantage of this new DeFi ecosystem. The APRs that are achievable on BSC are unimaginable compared to those on Ethereum and they are made possible exactly by those low fees and low transaction confirmation times.
I think the most popular project on the BSC is PancakeSwap by a big margin since it's one of the first launched projects, it's well done and many Binance engineers are involved in it from what I've heard (the team is officially anonymous though). PancakeSwap went on to surpass Uniswap as the exchange with the most daily transactions and that's understandable. I made 40 transactions on Ethereum all my life, but more than 600 on BSC and I know I'm not the only one.
With $4 Billion under management, PancakeSwap is surely not at the beginning of the road. It's an established exchange already and while growth is possible there are other projects with much more room for expansion meaning there might be an opportunity to invest in the next PancakeSwap before it booms. While many of the projects launching on BSC are PancakeSwap clones, I'll present to you one of them that has the potential to become more than that and innovate on top of what Pancake already offers.
Cafe Swap
The team behind CafeSwap is one of the most active ones out there and I check on them every day to see what new stuff gets brewed in the Cafe backyard. While they started as a Pancake clone they are soon going to release their own exchange meaning they won't rely on PancakeSwap for doing trades on their platform and they could use the trade fees to further the development of their ecosystem.
Update: Since I started writing this article they went through and released the DEX as promised, creating many new exciting opportunities for the platform.
Cafe pros:
1. Audits
There are so many good things about this project that I don't know where to start. From the active and responsive team to the Certik Skynet that gave this project a security score of 92/100, this project is one I'm very excited about. By the end of the month, they'll also have some audits done for their upcoming DEX contracts.
They also partnered with Beefy Finance another big player in the BSC ecosystem which usually curates only top quality projects. Take it for what it's worth, but I haven't heard of any project that got listed on Beefy to rug-pull.
Update: Since the DEX got released before I released the article (damn the Cafe guys move fast 😂) the audit was also released. This was conducted by HashEx and you can take a look at their notes here https://docs.cafeswap.finance/cafeswap-audit-reports/dex-audit.
2. Innovation
Among other things, the most exciting product that will come out from the Cafe backyard is the Mocha token. This token will have a fixed supply unlike the main token of the platform BREW. This token will be earned through something called Dual Farming which means you're going to receive both BREW and Mocha when you're using the Cafe Smart Vaults.
Speaking of Smart Vaults this is another new thing yet to be introduced to the platform. Those vaults are supposed to compound your gains automatically saving you a lot of gas fees. While this might not seem like much, there's no other AMM that I know of on the BSC that does that on its own, usually relying on projects like Beefy or Autofarm.
Another great thing coming soon to CafeSwap is NFT staking. NFTs are all the rage these days and every project is jumping aboard this ship. Whether you like them or not, on CafeSwap they're not just aesthetic JPEGs that you can brag with on the internet. They'll be used to farm partner project tokens and earn Mocha at the same time. Check out this nice explanatory illustration they put together for more info:
A lot of those things are due by the end of April and with $3/BREW entry price I think it's a great time to explore this project. However, I wouldn't wait too long, the team behind Cafe Swap is moving very fast and a lot of things were already delivered ahead of schedule.
3. Partnerships and Listings
The BREW token is listed and recognized by big projects like Coin Gecko, Coin Market Cap, Dapp Radar and is listed on 1inch Exchange. This, along with strategic partnerships with established BSC projects such as Ditto Money and Beefy Finance make BREW an especially attractive token for me.
By the end of the month, we will also see BREW listed on Bithumb one of the most popular exchanges in South Korea which is in itself a booming crypto market.
4. Bonus
Due to the tons of coffee that keep the Cafe Swap developers awake all day and night, they also started preparing a freshly roasted UI(the image is blurred on purpose) to make the platform stand out from the crowd of Pancake clones out there.
This is a very nice thing to see especially since most other clones have the " set it and forget it" kind of mentality, not trying to come up with anything original.
Ending thoughts
While the BSC ecosystem is growing at an exponential rate, it's hard to find projects that try to bring something new to the table. From the hundreds of AMMs out there all pretending to be a better Pancake Swap it's tough to find those few projects that innovate and build upon the Pancake foundation.
Right now I believe Cafe Swap is one of the rare projects trying to distinguish itself, trying to do things their own way. The community is very supportive of the project and the general atmosphere surrounding it is one of trust and positivity regarding the future.
In the future I'd like to see the team address the inflationary nature of the BREW token (this is nothing to be scared about, this is the original Pancake tokenomic). Having your own DEX for collecting fees and hosting liquidity pools is a great step in this direction, the lottery they implemented recently is another, but I'd also like to see a reduction in rewards (new BREW per block) over time.
Overall I'm very happy with the way things are going at the Cafe and I hope this project succeeds in becoming an independent, strong player on the Binance Smart Chain.