How BoC Generates Yield Simplified I: The Ecosystem.
What is BoC?
Bank of Chain (BoC) is a multi-chain yield optimiser with a goal to become the first decentralised bank (DeB). The BoC protocol enables users earn the best long-term “risk-free” rewards by employing mulitple strategies to generate sustainable interest on stablecoins and other cryptocurrencies.
By taking away the burden of interacting with multiple DeFi protocols, BoC simplifies the process of automating earnings and facilitates the integration of a number of lending protocols, automated market makers, yield aggregators, among others.
The Architecture of the BoC System
The architecture of the BoC system is designed to be decentralised, secure and automated. Leveraging a number of highly functional smart contracts, the BoC system which enables automated yield optimisation.
A. Custody & Transaction
The system is designed as a self-custodial solution, which enables the use of cryptocurrency wallets such as Metamask and Wallet Connect. By not requiring KYC, the system design significantly eliminates time required to sign up and undergo identity verification, unlike a centralised finance platforms.
B. Smart Contracts
Smart contracts are integral to data and assets exchange within the system. Not only are the smart contracts are central to processes within the system, they also interact with other third party smart contracts. A list of BoC protocol smart contract addresses are available to view on the documentation page.
The Components of the Ecosystem
A. Stablecoins & USDi
Unlike a number of yield generating platforms, BoC offers no restrctions on stablecoin deposits or withdrawals. This means stablecoins can be deposited and withdrawn at any given time. The stablecoins available on BoC currently are USDT, USDC, DAI, BUSD, among others. The protocol performs due diligence and has strict conditions for stablecoin selection.
B. The Vault
Vault are mechanisms that use algorithms to grow crypto investment by reinvesting profits. By pooling crypto-assets from multiple users, BoC vaults lower transaction costs and enhance returns by allocating funds to strategies. Two vaults are available to users of the protocol; a USD vault and an ETH vault.
C. The Strategies
By taking away the burden of interacting with multiple DeFi protocols which can be highly frustrating for the user, BoC automates interest on assets in a user-friendly way with smart contracts called strategies. These strategies employ pooled assets to generate yield by interacting into third party protocols.
D. The Oracle
Oracles are data sources that connect the blockchain to off-chain, real-world information in order to query data in smart contracts. The BoC smart contracts can make executions based on pre-defined conditions following data retrieved from the Chainlink, an ecosystem of decentralised oracles.
E. The Third-party DEXes
The BoC protocol interacts with DEXes to enable the exchange of deposited stablecoins for desired tokens. BoC interacts with decentralised exchanges such as Uniswap, Balancer, Aura and Curve.
F. The Third-party Loan Protocols
PLFs are leveraged by the BoC protocol to enable yield optimisation through lending or borrowing crypto assets. BoC has the Aave protocol currently incorperated into the ecosystem.
G. The Third-party Yield Aggregators
Yield Aggregators are also incorporated into the BoC protocol. The aggregators incorporated include Convex and Yearn Finance.
All third party protocols play an significant part in the overall ecosystem, as they enable BoC generate sustainable yield on crypto-assets.
To conclude
BoC has currently established two secure vaults, built multiple strategies, incorperated several protocols, and is now operating on the Ethereum blockchain. With significant development scheduled for the future, the protocol plans to introduce aditional services to users, which will include instiutional services.
In 2023, BoC plans to launch a governance token, layer-2 blockchains, incorporate alt-coin farming and commence smart contract insurance.
Further Reading
- For more information on the ecosystem refer to the BoC Documentation.
