$PINK: Dot Finance, A DeFi Project With A Difference
As cryptocurrencies continue to make headlines across the globe there is an untapped section that is waiting to be explored and exploited, although OGs are firmly placed within the sector and what makes it ingenious is the ability of this sector to save humanity from the problems currently associated with the financial systems as they are currently wired.
What is DeFi?
Decentralized finance is an emerging ecosystem of financial applications and protocols built on blockchain technology with programmable capabilities, such as ethereum and solana. The transactions get executed automatically through smart contracts on the blockchain, which includes the agreement of the deal.
“Anyone can actually build businesses on top of these protocols and using them the same way as we can today build an internet business on top of the HTTP IP protocol,” said Stani Kulechov, founder of a DeFi protocol called Aave.
Decentralized finance has captured only 5% of the crypto space, according to CoinGecko, but it has seen massive growth recently.- CBNC
What is $PINK (Dot Finance)?
Dot.Finance is building a suite of DeFi products for the Polkadot ecosystem. Dot.Finance was developed to spur Polkadot’s growth trajectory by reducing barriers to participation while maximizing the performance and efficiency of assets and tokens that are deployed to different DeFi products.
Dot.Finance is designed to bring DeFi to a wide range of users and will help increase user exposure to the many benefits of the Polkadot ecosystem. This will help grow adoption of not just the Polkadot framework but the many new DeFi products and services that Dot.Finance is building on top of Polkadot’s safe, secure, and resilient architecture.
What is Dot Finance bring to the ecosystem?
- Yield Farming: Anybody that has been in Decentralized Finance (DeFi) long enough has heard about yield farming. At its core, yield farming is the practice of using DeFi protocols to make your money work for you. Instead of having funds stashed in a zero-interest account or a hardware wallet hidden under your mattress, you can use them to lend, borrow, trade, or provide liquidity. DeFi platforms incentivize user participation by rewarding them with native tokens and/or a portion of the transaction fees. Keeping up with the fluctuating rates and ever-changing market conditions takes a lot of time and energy. If you make a mistake or miss the optimal compounding times, your APY drops significantly. If you farm on Ethereum, you also must worry about the crazy high gas fees eating into your yields with every transaction. Ethereum yield farming has become a space where only whales turn a profit. Dot Finance helps farmers avoid these issues and earn the highest returns possible with our yield aggregator. By working on Binance Smart Chain (BSC), the transactions are fast, and the gas fees remain low. Our smart contracts automatically compound your returns at the optimal frequency to increase your APY and the already low fees are shared across farms by batching the auto-compound transactions. We give farmers automation and compounding at scale. It’s like farming with a tractor instead of pulling a yoke on your shoulders.
- Vaults: Normally, after providing liquidity to a pool on PCS and receiving LP tokens, you can stake those to earn CAKE. The CAKE rewards incentivize people to add liquidity to the PSC pools but it takes a little more time and effort from the farmers. That CAKE can be converted to more LP tokens for compounding returns, or can be staked in pools to earn other tokens. PCS mostly doesn’t have auto-compounding pools or farms, so funds have to be manually converted and restaked. The 30% for which is minted PINK is the performance fee that goes to the PINK stakers. Because PINK is issued instead, and PINK is unlikely to go under the IDO price, you will get more yields with the PINK Distribution as compared to the value of receiving just BNB.
- Pink Staking: There is a separate PINK Staking farm that will allow you to stake your tokens and receive a share of PINK Distribution profits. These profits come from the vaults performance fee — the original 30% that were converted to newly minted PINK tokens. This is an automatic process that happens with every withdrawal, e.g., a user takes profits, the smart contract executes and 30% of those profits are converted to BNB and given to everyone with staked PINK tokens. Simply put, when you stake PINK tokens in the PINK farm, you receive a share of the PINK Distribution for the entire community.
What About Dot Finance Team? Can they be trusted?
One of the factors that made a believer out of me for the Dot Finance Project is the simple fact that most of the team members are formerly Bancor guys, most importantly the Lead Tech Contributor.
What is Bancor?
Bancor is a blockchain protocol that allows users to convert different virtual currency tokens directly and instantly instead of exchanging them on cryptocurrency exchanges like Coinbase. BNT is the Bancor Network Token, which is the primary token used within the Bancor network.
It is also worthy to note that Bancor is one of the first DeFi projects and BNT remains a huge success hence i am banking on a replica and improved success with Dot Finance.
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