Decentralized Finance (DeFi) applications on the BNB Chain represent a significant portion of the decentralized applications (dApps) that have made the Binance blockchain one of the leading players in the cryptocurrency space. In this guide, we will review the five most popular decentralized finance (DeFi) offerings, according to the ecosystem's own ranking, DappBay.
In this guide:
What are DeFi applications?
DeFi applications on the BNB Chain
Cake on PancakeSwap
TPT on PancakeSwap
RDNT on BingX
Pros and Cons of DeFi Applications
Frequently Asked Questions
What are DeFi applications?
Decentralized Finance (DeFi) applications on the BNB Chain, and any other blockchain ecosystem, are decentralized tools that enable users to operate in digital financial spaces without the intervention of a third party. They are peer-to-peer (P2P) operations related to trading, lending, or storage.
These decentralized applications are characterized by the empowerment they provide to users, who benefit from the automation of protocols via smart contracts on open, transparent, and decentralized networks and platforms. They possess immense potential due to interoperability and the diversity of tokens (including stablecoins).
DeFi applications on the BNB Chain
Among the DeFi applications available in the BNB ecosystem, we find popular decentralized exchanges (DEX) like PancakeSwap, as well as P2P platforms for generating passive income through liquidity provision in yield farming or storage or lending pools, as is the case with Radiant Capital.
Decentralized Finance (DeFi) applications on the BNB Chain with the largest number of users
PancakeSwap
PancakeSwap is one of the most popular Decentralized Finance (DeFi) applications in the BNB ecosystem, providing a platform equipped with tools for storing and trading BEP-20 tokens. This protocol automates liquidity pools and user transactions using an Automated Market Maker (AMM) model.
The token has a native token (CAKE), which is used for participating in governance operations and incentivizing liquidity providers. Binance's support led to its price rising to 40 USD in 2021 just a few months after its launch, although it has lost about 95% of its value since that peak.
Aster
This alternative to PancakeSwap on the BNB chain by user volume (also compatible with Arbitrum) offers decentralized trading, swapping, and storage services. It has its own stablecoin based on the US dollar (USDF), with a modest market cap of about 78 million dollars.
Like PancakeSwap, Aster includes a DEX that also allows trading using decentralized perpetual contracts, with liquid pairs facing the stablecoin USDT alongside high-volume cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), XRP, SOL, DOGE, LTC, ADA, DOT, or XLM.
Transfer Exchange
Another popular DeFi application in the BNB ecosystem for cryptocurrency trading is Transit Swap, a multi-chain platform that integrates over 30 different DEXs (including popular protocols like Uniswap, PancakeSwap, and SushiSwap) to enhance trading in terms of liquidity and cost.
Alongside the TokenPocket wallet, Transit Swap users can benefit from reduced transaction fees through TPT. This is the native token of the wallet associated with the platform, which also allows its holders to participate in project governance.
Radiant Capital
On the BNB network, we also find decentralized finance applications that go beyond decentralized exchanges, such as the multi-chain platform Radiant Capital, which allows the issuance of assets on different networks to expand lending capabilities. This allows deposits on one blockchain and loans on another.
This protocol is based on RDNT, a multi-chain token that enables transactions across networks. Its primary use is operational compatibility, but it is also used as a staking and governance token, granting holders the right to vote on decisions regarding the development of the project.
Brew Labs
As a decentralized finance (DeFi) application, Brewlabs offers extensive capabilities, providing storage, farming, trading, swapping, non-fungible tokens (NFTs) services, and even allowing the creation of indices for trading cryptocurrencies. Its transition to the core ecosystem has been discussed, but it retains the same services.
It also maintains its native token (BREW), which was relaunched on the L2 platform supported by Coinbase. By moving away from the BNB chain, the development team ensures that the project has reduced costs and gained scalability. Nevertheless, its functionalities remain the same and are available on Uniswap.
Pros and Cons of DeFi Applications
Among the advantages of decentralized finance (DeFi) applications, we highlight decentralization and user empowerment, as they eliminate intermediaries who may raise transaction costs and impose censorship or manipulate operations. DeFi brings a democratic nature to finance, enabling global access via the internet.
This freedom does not come without risks, such as the potential for vulnerabilities in smart contracts and the presence of scammers and hackers in the market. In addition to security issues, the lack of scalability remains one of the main challenges facing decentralized finance (DeFi) projects, especially those launched on Ethereum.