Introducing BEPSwap — Binance Chain’s First DeFi Application

Alex Lielacher

Published on 20 Nov 2020

Binance is making a strategic push into the burgeoning DeFi market to provide alternatives to the Ethereum-only applications that have dominated this new market so far.

The newest addition to the Binance DeFi ecosystem is Binance Chain’s first decentralized finance application, BEPSwap.

In this article, you will learn what BEPSwap is, how it works, and how the cross-chain liquidity network, THORChain, makes decentralized trading possible for BEP2 tokens.

What is BEPSwap?

BEPSwap is a decentralized exchange that enables Binance Chain token holders to convert one BEP2 token for another and stake their assets to earn trading fees for providing liquidity to the market.

Like Uniswap on Ethereum, BEPSwap allows for the seamless and secure conversion of digital assets. The key difference, however, is that BEPSwap is dedicated exclusively to Binance Chain tokens.

The DeFi app’s four key features are:

Instant asset swapping
BNB and BEP2 token staking in liquidity pools to earn trading fees
Pool price monitoring via API or interface to earn by trading the pools to correct prices
Connecting BEPSwap to swap tokens for your DApp and staking your treasury for deep liquidity

In light of Binance Chain’s low transaction fees and fast confirmations, BEPSwap provides a superior decentralized trading experience than many of its peers on Ethereum.

How to Use BEPSwap to Swap Binance Chain Tokens

BEPSwap provides a user-friendly, web-based trading application that you can access at chaosnet.bepswap.com.

Currently, you can swap an array of popular BEP2 assets, including but not limited to Binance Coin (BNB), Binance USD (BUSD), Bitcoin BEP2 (BTCB), Travala.com Token (AVA), ETH BEP2 (ETH), and Trust Wallet Token (TWT).

To swap a BEP2 token, you first need to connect your wallet to the application.

You have the choice between uploading a Keystone file, connecting your Ledger, or using WalletConnect to connect a Binance Chain-supporting mobile wallet such as Trust Wallet.

Once your wallet is connected, you are ready to trade.

To swap one asset for another, choose the asset you want to buy and check that its trading pool has sufficient liquidity for you to conduct your trade.

Let’s assume you want to convert BNB to TWT. In that case, you scroll down on the dashboard and click on ‘Swap’ next to Trust Wallet token.

Then, you decide how much BNB you want to convert into TWT and type that into the box.

Finally, you drag the button at the bottom from left to right and confirm the transaction using your wallet to complete the conversion.

And that’s it! You have now successfully swapped one BEP2 token for another.

In this case, you have swapped 1 BNB for 292.62 TWT tokens. The trading fees incurred amount to 0.000375 BNB ($0.01) and 1 RUNE ($0.92), which was subtracted from the BNB value of the transaction.

How to Stake Assets on BEPSwap

If you are looking to generate yield on your Binance Chain assets, you can act as a liquidity provider on BEPSwap.

To deposit tokens in a trading pool to earn fees, you simply click choose an asset on the dashboard and click on its name. Next, the asset’s pool information will appear.

For example, if you click on Trust Wallet Token (TWT), you will see that the pool has around $264,000 in liquidity, with 787 users taking part. At the time of writing, the APY that liquidity providers earn for contributing assets to the pool stands at 388.09%.

To deposit tokens, you need to click ‘Add’ on the top left and then enter the amount of the token you would like to deposit to the pool.

You have the choice between only depositing TWT or between depositing both TWT and RUNE. RUNE is THORChain’s token and the base settlement currency of BEPSwap.

To confirm your deposit, you drag the button from left to right and sign the transaction using your Binance Chain wallet.

And that’s it! You will now start earning yield on your TWT tokens for providing liquidity to the token’s trading pool.

What is THORChain and Why Should You Keep An Eye On It?

BEPSwap is built on top of THORChain technology and powered by a Cosmos-SDK statechain.

THORChain is a decentralized cross-chain liquidity protocol that enables asset swapping across blockchain in a secure, non-custodial manner.

The project’s mission is to alleviate the need for insecure centralized exchanges by providing a secure, decentralized alternative that enables seamless and secure asset swapping directly from the user’s wallet.

As part of this mission, THORChain did not only provide the software for Binance Chain’s first decentralized exchange, but it also contributed funds — in the form of its native token RUNE — to one of the platform’s most exciting trading pool: Trust Wallet Token (TWT).

THORChain deposited 33,333 RUNE tokens (worth $20,000) into the Trust Wallet Token pool to drive yield to TWT liquidity providers. As a result, TWT liquidity providers were earning 3,000% APY following the deposit.

Currently, the APY has dropped down to ~300%, which is still 300 times more yield than your average savings account will earn you.

In addition to providing the tech stack for BEPSwap to power decentralized trading in the Binance ecosystem, THORChain is also working with other chains to create similar solutions that could further decentralized the broader cryptoasset trading ecosystem.

Bitcoin DeFi Powered By THORChain

Bitcoin is primarily known as digital gold and for being the closest thing we have to sound money.

What bitcoin is not known for, however, is DeFi.

But thanks to THORChain, that may change soon.

Through its cross-chain decentralized exchange, called ASGARDEX, THORChain enables Bitcoin holders to swap BTC for RUNE or BNB (and vice versa) without creating pegged or wrapped tokens.

Additionally, users can provide BTC and BNB liquidity in the cross-chain liquidity pool to earn trading fees.

ASGARDEX is still in beta mode and runs on testnet, so the THORChain team does not recommend users to swap or deposit a large amount of funds. Nonetheless, the innovative cross-chain trading application gives us a glimpse into what decentralized cross-chain bitcoin trading could look like in the future.

If THORChain succeeds in its mission, it will not be long until you will be able to seamlessly and privately swap BTC for ETH, BNB, or any other leading digital asset in a secure and decentralized manner.