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Dot.Finance Review: Yield Farming Solution with Automated Compounding Protocol

Dot.Finance Review Yield Farming Solution with Automated Compounding Protocol
  • Dot.Finance provides more yields by automatically compounding/aggregating interests.
  • Dot.Finance has an excellent UI and UX which makes it easy for users to navigate its software.

Dot.Finance is proof of what the Polkadot ecosystem has in store for the DeFi crypto community. It provides investors with an effortless opportunity of investing their idle cryptos to generate more yields by automatically compounding/aggregating their interests.

Through this, the Dot.Finance team aims to project its yield farming proposition as well as increase the adoption of Polkadot in the crypto world. But there is so much more to Dot.Finance that meets the eye.

In this Dot.Finance review, we shall x-ray this solution to understand how the system works, what it offers, and how reliable it is. Let’s surf!

Ease of Access and Use

Dot.Finance has a simple and intuitive UI. Its UX is also excellent and makes it easy for users to navigate its software without needing prior information.

Joining the platform is also easy and does not require a KYC since all forms of transactions are recorded on the blockchain. All you have to do is connect your digital wallet to enable you to confirm and sign transactions easily.

Dot.Finance’s Yield Farming Rudiments

To participate in Dot.Finance’s yield farming, you need to swap your investable crypto with its supported cryptos. The cryptos are usually Binance Smart Chain (BSC) tokens such as BNB, USDT, Polkadot (DOT), and Chainlink (LINK), in any of its supported farms that include

  • BUSD-BNB Liquidity Pool
  • PINK-BNB Liquidity Pool
  • USDT-BNB Liquidity Pool
  • DOT-BNB Liquidity Pool
  • LINK-BNB Liquidity Pool, etc.

You can get these tokens through PancakeSwap, a decentralized exchange that supports a great variety of BSC tokens-pairs, thereby allowing you to get Dot.Finance liquidity tokens. Your first step to participating in Dot.Finance liquidity pool is to have hold of these coins. Here’s an overview of how to get your LP tokens:

  • Visit PancakeSwap. On the top right corner, click on “Connect Wallet” to connect your digital web wallet automatically.
  • Next, toggle to “farms” and select the liquidity token pair you need. You can use the search box at the top right to quickly get your preferred pair, then click “Details” to expand it.
  • Tap the link to “Get ‘pair’” to approve the transaction. Then click on “Confirm Supply” to the LP token to your wallet.

However, you can get a comprehensive guide in Dot.Finance’s FAQ section. After this, head to the Dot.Finance web application and become an active liquidity provider.

Dot.Finance Offering and Reward Breakdown

Dot.Finance major offering and selling point is the yield aggregator. As investing in yield farming can get tricky and risky, this feature uses the auto-compounding protocol to make it easier to find the best deals available for you to invest your crypto and also on time too.

By using smart contracts to enhance the compound interests of the liquidity provider, users can limit the high rate of gas fees experienced in Ethereum-hosted blockchain Decentralized Finance projects. Fees are also shared across, allowing users to participate in batched transactions on a daily basis, using this yield aggregator protocol.

Rewards are collected in a 70:30 ratio. 70% of the reward is collected in primary LP tokens, while the remaining 30% goes to Dot.Finance native token, the Pink token. In the subsequent section, the Pink token will be explained in detail.

The Pink Token and Staking in Dot.Finance

The Pink token is unique and native to Dot.Finance. It is used as an incentive to increase your earnings by allowing you to stake your tokens on the platform easily. You realize it when you earn CAKE rewards from your liquidity profits.

As a member, you also have the benefit of participating in DAO governed protocols, giving you the privilege of making innovative contributions to Dot.Finance’s contracts.

Staking in Dot.Finance

Staking and yield farming may look similar; however, there are other things that make them different. In yield farming, you’re locking your funds to be used as loans, usually in the long term. You do this in view of realizing an interest if it goes in your favor. This could come with some risks, unlike in staking.

Staking involves locking your funds to be used by a DeFi platform or protocol for mining, block transaction confirmation, or any other purpose the platform or protocol deems fit. In the end, you’ll receive rewards for contributing your crypto.

In staking, the risks are limited compared to yield farming. Nevertheless, staking is a great way to earn in Dot.Finance’s protocol. To enable you to gain access to this benefit, the team came up with a great solution of automatically earning Pink tokens. Hence, qualifying you for the incentive.

You earn the Bep20 Wrapped BNB (WBNB) calculated with an equivalent Annual Percentage Rate (APR).

Withdrawing and Collecting Rewards in Dot.Finance

It is effortless and straightforward to withdraw or collect your rewards in Dot.Finance; thanks to its intuitive UI with great user experiences. Collecting your rewards means you only choose to withdraw your profits rather than the total stake.

However, when you “Withdraw and Collect” your rewards, you’re withdrawing your earnings plus initial deposits. Perform both operations is as pretty easy as these steps:

  • On the homepage, choose your underlying farm pair, and click on it.
  • On the right section, you’ll find the “Earnings” box, toggle, and click on “Collect.”

Very easy, the rewards move to your web wallet. Next to the Collect button is the withdraw button. So the process is the same when you want to withdraw all your funds.

Dot.Finance Fees

One of the selling points of Dot.Finance is its fee structure. The project aims to reduce the huge gas fees affecting the crypto sphere, most significantly, Ethereum.

Also, the platform aims to ensure that investors get the most out of their investments, and usually, fees are recycled and shared amongst Liquidity providers. However, fees are sometimes charged to create orders on the platform, allowing you to choose between taking the leap or paying the fees. Here’s a breakdown of the fee structure:

30% of your profits are converted to the native Pink token. This is known as a performance fee and is usually used for staking. However, Dot.Finance will charge you a 0.5% fee if your staked fund is withdrawn within 72 hours.

Customer Support and Resources

The platform has different means of reaching out to users, including its social media channels, Github, and website. It also has a Medium account which users can visit and get tons of information on how to improve their yield farming experiences with the platform.

Dot.Finance Investors, Competitors, and Tokenomics

As a liquidity provider, you provide funds in the form of tokens to Dot.Finance’s liquidity pool. Instead of leaving your coins idly in your digital wallet, you can invest them in Dot.Finance’s yield farming project.

Since its inception, Dot.Finance’s native Pink token has grown considerably and has a market cap of over $99 million, over 46.65% Pink token staked, and a valuation of $1 at the time of writing.

On its website, Dot.Finance team lavishly displayed the list of investors backing up the project. They include, LC Capital, Kyros Ventures, Zokyo Ventures, etc.

In the same vein, Dot.Finance has a fair share of competitors, including BSC-run yield aggregator and auto-compounding platforms, such as Pancakeswap.Finance and Pancakebunny.Finance.

Conclusion

Dot.Finance is a nascent innovation to boost the blockchain ecosystem. Being an auto-compounder and yield aggregator, the protocol aims to provide speed and efficiency to Yield Farmers by giving them the best environment to make good financial decisions.

One of the key reasons for the project to thrive is the enthusiasm from the team and advisors who are formerly Bancor developers. Its partners are Chainlink, Polkadot, and STONE DeFi.

Disclaimer: The views and opinions expressed in this article are solely the author’s and do not necessarily reflect the views of CoinQuora. No information in this article should be interpreted as investment advice. CoinQuora encourages all users to do their own research before investing in cryptocurrencies.

A dedicated market analyst focused on the highs and lows of the cryptocurrency market. With a background in Business Administration, he tries to unfold his financial perspective to global readers.