Beating the HODL by providing liquidity on BEPSwap

For those that don't know yet BEPSwap is BINANCE Chain's first decentralised finance application allowing BEP2 token holders to swap their assets, or stake them to provide liquidity to the market. To express it in a single phrase BEPSwap is UniSwap for Binance Chain and it is powered by THORChain technology. The pools are running over Binance Chain and use THORChain validators to maintain the security of pooled assets using threshold signatures.

Now let's take all of that information and translate it simple. Basically it is a Liquidity Pools aggregator where you can pair RUNE against other cryptocurrencies and get rewarded for that. Some of you might have played on Uniswap or Ethereum based Liquidity Pools while this one is the first public implementation of THORChain technology having at its core RUNE cryptocurrency. But what I like about it is the simplicity of using and the interface through which you can access different pools. And while I am using Binance for some of my cryptocurrency exchange it felt an easy translation to use this. And let's face it, the fees from here do not compare in any way with the painful gas fees from Ethereum based liquidity pools. This was another factor for me jumping in.

How I've become a Liquidity Provider? Pretty simple: I transferred some of the RUNE and BNB tokens from Binance to my Trust Wallet; I've connected my Trust Wallet to the BEPSwap application and I was able to see and access my funds this way; I've added the liquidity into the RUNE:BNB pair based on the available funds; I've watched my balance increase and decrease (impermanent loss) and let it flow and build up.

I am just 10 days into the RUNE:BNB Liquidity Pool and I can say that I've already beat the HODL by 0.38% for the mentioned period or by 15% per year. The rather small gain can be put also on the impermanent loss that will soon disappear once the pool gets balanced through the arbitrage operations. It is an interesting experiment to see how the APY % evolves and degrades based on the big movements of one of the paired token (impermanent loss) or improves once things settle and the pool gets balanced. I think at most I got to 0.80% gain or 25% APY per year, which is pretty good for now. I assume that once I hold more my assets in the pool I will gain more.

This is how I've beat the HODL and got some more rewards and experience within the DeFi space.

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