Beefy Finance is among the many decentralized finance (DeFi) projects helping investors generate passive income. Continue reading this guide to learn how it works and how to get started.
Beefy Finance can be described as a yield optimizer that lets users invest their digital assets to earn compound interest. The protocol usually takes users’ earnings and then reinvests them into various liquidity pools to boost their gains.
As of July 31, 2023, the Beefy ecosystem’s total value stands at $400 million. All the funds are stored on BSC (Binance Smart Chain).
How to Get Started
As a yield optimizer, Beefy Finance employs a wide range of algorithms with the aim of finding yield farm projects that offer the best returns for its users. Here is what you need to do to start earning passive income on this protocol:
Step 1: Visit the Beefy Finance Platform (beefy.finance)
In order to begin generating income on Beefy Finance, you need to visit the project’s official website (beefy.finance). On the homepage, click “Launch App.” This button will direct you to an app that features a variety of information, including vaults, total value locked, monthly and daily yield.
Step 2: Connect Your Crypto Wallet
To inject funds into the liquidity pools and vaults, you must connect your Web3 wallet to the platform. Beefy Finance is compatible with multiple wallets, including the most famous ones: Trust Wallet and MetaMask. It also supports a good number of blockchains, such as Avalanche, Polygon, BSC, and Fantom.
After connecting your preffered crypto wallet to the protocol, you will be able to see the liquidity pools and vaults. As for the former, you need to add two tokens per pool. For example, to invest in the GALA-BNB Liquidity pool, you must add both coins. On the other hand, you only need BNB tokens if you want to invest in a BNB vault.
Beefy Finance displays the expected annual percentage yield (APY) for every vault and liquidity pool to help users make the right investment decisions.
Step 3: Add Tokens to Beefy Finance Pools
After selecting the pool that you would like to invest in, click “Add Liquidity.” In case you don’t have the tokens required, press “Buy Token” to purchase them. Once this is done, confirm the transaction, and the coins will be added to the liquidity pool. The stats and details will be available on your dashboard.
Step 4: Add Tokens to Beefy Finance Vaults
After depositing funds in a liquidity pool, you might also want to invest in vaults. To do this, select the token you want to deposit after checking the vault’s expected APY, total value locked, and safety score. Now click the “Deposit” button and enter the amount you wish to invest. Once you approve the transaction, press “Deposited” to see the rewards and fees.
How to Withdraw Your Rewards From the Beefy Finance Platform
Many DeFi projects get criticized for making the reward withdrawal process difficult. But that’s not the case with Beefy Finance. The protocol makes it easy for users to withdraw funds at any time. Moreover, it doesn’t have a locking period.
Once the generated rewards reflect on your dashboard, you can withdraw them simply by clicking the “Withdraw” option.
A Brief History of Beefy Finance
Beefy Finance was launched in September 2020 by developers that have chosen to stay anonymous, claiming that they want users to focus only on their project. Despite maintaining anonymity, the developers are always active on Beefy Finance’s Discord server and Telegram channel.
As per data on the protocol, Beefy Finance aims to build the future of decentralized finance. It was audited by the popular auditing firm DefiYield in December 2021.
The project was originally built on BSC due to its involvement with Binance. However, it has since expanded to other blockchains, as mentioned earlier.
Conclusion
While the team behind Beefy Finance is anonymous, the protocol’s security hasn’t been questioned since its inception. Therefore, the platform can be considered safe for exploring investment opportunities in DeFi. We, however, advise you to do your due diligence.
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