- MoonFarm Contributing to Centralized Decentralized Finance (CeDeFi).
- Optimizing Yield Farming with MoonFarm.
The crypto world continues to revolutionize itself along with blockchain technology. This article demonstrates how MoonFarm, the worlds’ first CeDeFi (Centralized Decentralized Finance) aggregator, and blockchain technology make a big difference in the world of cryptocurrency.
We’ve seen decentralized finance (DeFi) take off in recent times. But, the world of crypto didn’t always operate this way. Before DeFi came into existence, centralized finance (CeFi) was used for trading cryptocurrencies.
In CeFi, a centralized exchange is responsible for handling all crypto trading. Users don’t have access to their private keys or in other words, they don’t really own their crypto. They are subject to the terms and conditions induced by these exchanges. Besides, these exchanges are also in full control of the prices and gas fees that users need to pay.
In DeFi, however, things are different. Here users have complete control of their funds. There is no exchange that handles transactions. Instead, a protocol deployed on a blockchain network handles all trading. So, we trust a protocol instead of a centralized authority.
Both DeFi and CeFi have advantages and disadvantages of their own. CeFi makes it easy for users to convert fiat currencies to crypto which DeFi is not very good at. But, DeFi is completely permissionless and does not require a KYC process.
Now, wouldn’t it be great to have the best of these two worlds on a single platform? Well, this is exactly what MoonFarm – the worlds’ first CeDeFi (Centralized Decentralized Finance) aggregator aims to achieve.
How Does MoonFarm Contribute to CeDeFi?
CeDeFi is a term coined by Binance CEO Changpeng Zhao while introducing the Binance Smart Chain. It is a solution that combines the best features of CeFi and DeFi on a single platform. CeDeFi provides the transparency and scalability of DeFi while keeping intact the flexibility of CeFi. It is the latest trend in the world of blockchain and industry experts have shown keen interest in this new technology.
Now, as mentioned before MoonFarm is the first-ever CeDeFi aggregator deployed on the Binance Smart Chain (BSC). The platform aims to bridge the gap between DeFi and CeFi and also eliminate their shortcomings. It also aims to remove all the entry barriers and boost the mainstream adoption of cryptocurrencies. But, most importantly it aims to provide “market-leading yield farming optimization.“
Problems With Present Day Yield Farming
For those of you who are not aware, yield farming is the backbone of DeFi. In simple terms, it is a way of generating rewards with your cryptocurrency holdings. From the platform’s point of view, it is a way of providing liquidity to its users. Therefore, it is also called “Liquidity Mining.”
There are a set of users called liquidity providers who lock their crypto assets in smart contracts called liquidity pools. Borrowers on these platforms can borrow from these liquidity pools. The liquidity providers are rewarded with ERC-20 tokens. They can lock these rewards in other liquidity pools to earn more rewards and the cycle goes on.
As rewarding as this may sound, there are some problems users face while yield farming. For starters, they need to own a non-custodial wallet and have a good understanding of how transactions work on a blockchain. Apart from this, they need to know how to store their private keys and have a knowledge of high-performing farming pools. Not to forget the gas fees that are associated with all this. This is where MoonFarm comes into the picture.
Optimizing Yield Farming with MoonFarm
MoonFarm is an emerging platform that combines DeFi’s transparency and high APR (Annual Performance Rate) with CeFi’s flexibility and ease of use. By doing this, it creates a robust protocol that makes yield farming rewarding as well as user-friendly.
MoonFarm uses a custodial wallet for all these transactions because it is easy to use and store. The protocol also identifies high-performing farming pools and DeFi platforms such that users get a higher APY (Annual Performance Yield) with lower risk. In addition to this, users who deposit their crypto assets are rewarded with MoonFarm’s native MFO token and can participate in MFO farming. The rewards are harvested automatically every single day and deposited into users’ wallets. Here are some benefits of MoonFarm over DeFi DEX aggregators.
- Lower gas fees.
- MoonFarm can be deployed on multiple chains, unlike other DEX aggregators that operate only on a single chain.
- Highly beneficial for beginners who have little to no understanding of blockchain transactions.
- The process is much easier and users need only a single digital asset to start farming.
- Overall better capital utilization.
In addition to this, MoonFarm also has its own AMM (automated market maker) called MoonSwap. MoonSwap essentially allows users to swap coins/tokens across chains in a hassle-free way with low slippage. It combines liquidity from exchanges such as Binance, Houbi, and 1Inch to give users the best possible deals.
CeDeFi is the latest new trend in the world of blockchain. Experts believe that CeDeFi could push for mass crypto adoption because of its ease of use and convenience. And, a platform like MoonFarm that optimizes yield farming and reward harvesting will only contribute to this success.