As mining crypto becomes less profitable in the coming months and years, people are looking for alternative methods to make money while holding their tokens and coins. The introduction of decentralized finance swapping exchanges has exploded as a result, leading to users having cheaper options to swap coins or adding to the liquidity pool themselves.
This is where BEPswap comes into play. They’re one of the many DeFi swapping exchanges taking the field, but do have a twist that will attract a number of different users.
Here is your BEPswap Guide to getting started on the platform.
What Is BEPswap?
BEPswap focuses on the Binance Chain tokens for their decentralized exchange. This means that for you to swap or add liquidity to the chain, you’ll need to utilize their BEP2 token. This token will include Bitcoin BEP2, Binance USD, and ETH BEP2.
The reason why you have to use these tokens over the normal Bitcoin or Ethereum is that those assets occur on different blockchains. Until platforms like Cosmos take off, it will be hard to transfer the straight token from chain to chain without paying high gas fees or having to convert to an ALT token that follows the same pattern.
The entire swapping system works on the THORChain, which is a platform connected to the Cosmos-SDK. Rather than having to burn ETH to perform transactions, you instead burn a RUNE, which significantly decreases the transfer fees.
BEPswap offers the ability to make money by trading on the platform. You help stabilize the price of coins where they’re supposed to be and you get a fee for helping that stabilization.
What Is the RUNE Token?
The RUNE token is the token that the THORChain uses to settle transactions. Every time you swap, withdraw, or deposit money into the pool, it requires that a transaction occurs. For this transaction to occur, you need to pay the fee associated with it, which requires a portion of the transaction (which is normally small) and then 1 RUNE.
While these transactions used to be cheap, around $0.20 or so, the recent bull market on cryptocurrencies has drastically raised the price of a single RUNE. The price currently sits at around $5.30, which means you’ll now be paying close to $5.50 USD for a single transaction.
You’re still going to pay less than you would on the Ethereum mainnet swapping sites like Uniswap because the cost of gas fees on that platform is closer to $30 USD.
What Are the Benefits of THORChain?
The THORChain resides on the Cosmos-SDK. The Cosmos-SDK plans to create a platform where you can swap tokens between different dapps located on the platform without having to pay high fees.
The goal of THORChain in particular is to provide a centralized exchange platform while still remaining decentralized. The benefit of centralized exchanges is their liquidity and the ability to convert cryptocurrencies into fiat dollars to pull out as cash.
By utilizing THORChain, you’re gaining access to true Bitcoin swapping. Through ASGARDEX, which is THORChains cross-chain platform, you can swap Bitcoin for RUNE or Binance Token without needing to wrap the token.
How Do You Use BEPswap?
To use BEPswap, you simply head over to the website and connect your Binance Wallet. Once you’re connected, you can start the process of swapping, adding liquidity, or trading.
You’ll need to either convert a portion of your coins into RUNE or buy RUNE separate to have enough tokens for the settlement process once you have started.
To add or swap tokens, you click the name of the asset you want to make the transaction on, to which you’ll be brought to that pool. In the top right corner of the pool information will be two buttons that say “ADD” and “SWAP”. If you choose to add, you’ll have the option of just adding the token of your choice or the token plus RUNE.
How Does Adding Liquidity Make You Money?
When you add liquidity to the pool of your choosing, you’re giving up your tokens so that when someone wants to do transactions, there are enough tokens in the pool to complete it without any hassle. You then make a fee off of every transaction that occurs between those two tokens. The fee you make is based on how much liquidity you’re adding to the pool, so the more you add, the better the return.
Think of adding liquidity as the same thing as adding your cash to a savings account in a bank. The bank then has cash on hand when someone makes a withdrawal from the bank and the bank pays you interest, which on average will sit at around 1%.
When you add liquidity to a pool, rather than the bank just thanking you for adding cash to the pool, you’re making money every time a transaction occurs. This means that the APY can be upwards of 1000%, but that directly depends on the pool and the amount of activity going on. A more realistic number would be around 40% APY, but it comes down to the pool itself.
How Does Trading Make You Money?
Trading allows users to capitalize on moments where the pool price doesn’t directly reflect the market price of a token.
In these instances, you can buy the token cheaper than the market price and then sell at the market price to make money. You also have the option to sell the tokens that you’re holding at a premium in the event that the pool price is higher than the current market price. You can then buy back in once the pool price reaches the market price again.
Use This BEPswap Review To Maximize Your Crypto Gains
BEPswap is a great place to swap tokens and make money off of adding liquidity without paying insane fees. People are slowly moving away from Ethereum and that makes other chains like the Binance Chain that BEPswap operates on more appealing.
Be sure to check out the rest of our DeFi guides on the blog to find out which platform is right for you. Subscribe to our newsletter to gain the latest insights and news on everything related to cryptocurrency.