BSCDEFI Product Launch and Team Statement
PowerPool launches BSCDEFI — providing yield-bearing, diversified exposure to Binance Smart Chain DeFi protocols
What is BSCDEFI?
BSCDEFI is a diversified basket of leading BSC DeFi protocol tokens that captures both their price action and, crucially, their staking rewards. It contains yield-bearing governance tokens for most major BSC DeFi protocols — CAKE, XVS, MDX, EPS, etc.
BSCDEFI enables to effortlessly capture the BSC DeFi ecosystem growth and staking rewards using a single asset.
BSCDEFI composition (the tokens included and their weights/shares) will be maintained relevant in the future through active management by the PowerPool DAO. The changes to the index should be based on the evolution of fundamental metrics of included projects such as TVL, MktCap, user base, fees collected, liquidity, etc.
BSCDEFI Yield opportunities
Besides capturing price appreciation and auto-harvested yield* for selected projects in the BSC ecosystem, BSCDEFI holders can generate additional yield on their capital by participating in CAKE liquidity mining in the BSCDEFI/BNB PancakeSwap pool:
- For first 48 hrs of the program, 900 CAKE/day will be allocated as pool rewards
- After that, the reward will be 450 CAKE/day
*Currently, security audits for staking strategies are in progress. Once audits are completed, staking of CAKE and other tokens will be enabled automatically. Investors in BSCDEFI will not need to do anything…ever!
Team statement — BSCDEFI launch composition
The BSCDEFI launch composition was approved by the community in Proposal 46:
However, during live testing, we found out that two relatively minor tokens from the initial shortlist (SPARTA, CREAM) need to be zero-weighted for BSCDEFI launch due to currently insufficient secondary market liquidity not allowing users to supply liquidity via ZAP.
Rather than delay further, we decided to launch BSCDEFI with these tokens zero-weighted and re-distribute their initial shares in the pool to the other tokens proportionally. We will be able to upweight SPARTA and CREAM eventually based on their progress, and liquidity. The launch BSCDEFI composition is presented below:
Supplying Liquidity to BSCDEFI
Currently, liquidity can be supplied using the multi-asset deposit function. This requires the liquidity provider to have a basket of tokens in necessary proportions, make all approvals, and after that supply liquidity. Once the minting transaction is mined, investors supplying/minting liquidity will receive BSCDEFI tokens on their wallet.
Link to BSCDEFI liquidity deposit: https://powerindex.io/#/binance/0x40e46de174dfb776bb89e04df1c47d8a66855eb3/supply
In a few days we will release the ZAP function allowing anyone to supply liquidity using BNB or BUSD. The ZAP will buy all tokens on DEXs, supply liquidity and deliver BSCDEFI to the user’s wallet automatically. It will be a gas-efficient, 1-click experience — no manual approvals or trades.
Once you have BSCDEFI tokens and BNB, you can then supply DEX liquidity to the PancakeSwap BSCDEFI/BNB pool and receive CAKE rewards:
BSCDEFI functions not present at launch will be added soon:
- Staking assets in third-party contracts with auto-compounding: Staking strategies for BSCDEFI using underlying tokens in the basket to farm yield for token holders. Status: ready and awaiting security audits. ETA: several weeks
- BSCDEFI rebalancing mechanism via “swaps window”: At initial launch, BSCDEFI swaps are disabled to avoid IL risks for token holders. However, periodically whenever the DAO decides the basket composition needs to be updated (based on evaluation of fundamental metrics for the underlying protocols), the DAO will enable swaps with dynamic AMM weights to shift towards the desired composition by means of arbitrage deals. ETA: 1 month
- Synthetic BSCDEFI inverse token: There will be a synthetic version of BSCDEFI with an inverse token that will allow holders to fully or partially hedge via offsetting positions involving both [BSCDEFI + BSCDEFI synth short], all the while still harvesting all future staking yield. Launch of the synthetic version depends on third-party protocols. ETA: ~2 months
- Listing BSCDEFI on BSC Lending sites: will be pursued once feasible given TVL, trading volumes, and liquidity metrics.
Technology Platform & Security
BSCDEFI is deployed as a Balancer pool on BSC with some upgrades. First of all, it operates as a static basket of tokens without swaps, eliminating IL risks for its holders. Swaps are enabled only during periodic rebalancing windows when pool capital allocation is directed towards a new (community-approved) composition using Dynamic AMM pool weights shifting.
PowerIndex + Power Agent network supports managed exposure not only to the tokens themselves, but also to the underlying staking rewards. Using PowerPool’s Wrapper+Router model and Power Agent (an automatic agent calling contracts when necessary), BSCDEFI can harvest rewards and automatically compound them, adding to the pool’s capital. This functionality has already successfully operated for the ASSY pool (Sushi staking strategy) for the last 6 months.
The platform underlying BSCDEFI is audited and successfully operating with TVL at scale in other PowerPool products running on the Ethereum mainnet for more than 6 months. Additional security audits are in progress for tokens staking strategies and rebalancing mechanics.