Bagels Finance Comparison: Leveraged Yield Farming Aggregator Platforms
DeFi is exploding! New opportunities to lend, yield farm and provide liquidity are appearing every day, and it can be hard to compare and contrast all of the different options available. One of the biggest areas of opportunity for DeFi enthusiasts looking to make the highest yield is in Leveraged Yield Farming.
Leveraged Yield Farming allows participants to stake their assets to different liquidity pools (mainly used for liquidity to decentralized exchanges) to receive a rate of return in a given asset. Yield farmers can leverage their staked assets to borrow more tokens that they stake for an even higher return. While there are many yield farming aggregators that allow users to enter several different yield farming pools on multiple blockchains, there are only a handful of leveraged yield farming aggregators in operation today due to the risks that taking leverage poses to both yield farmers and the platforms themselves.
Yield farmers take a big risk with not only losing significant value on their staked assets, but also on their borrowed assets. Leveraged yield farming platforms need to find a network of lenders to pair with the borrowers on their platform, while maintaining a high amount of liquidity. We’ll explore how Bagels Finance stacks up to some of the popular leveraged yield farming aggregators such as Rabbit Finance, Alpha Homora and Alpaca Finance in areas such as Token Metrics, Leverage, Lending and Ease of Use.
Key Features and Ease of Use
Usability and the ability to enter a yield farm is slightly different across Alpha Homora, Alpaca and Rabbit Finance.
Alpha Homora is the original yield farming aggregator and has several great advantages. Yield farmers only need to deposit one asset to enter a pool instead of two, their platform automates the swapping process for users. Additionally, users only need to do a few clicks to open up a yield farming position; they need to connect their wallet, select a pool and desired leverage, deposit one asset into the selected pool and confirm. When they receive farmed tokens the platform automatically reinvests them, increasing user’s position value. They have pools available from SUSHI, mStable and IndexCoop.
Rabbit Finance has several yield farming pools open for MDEX and PancakeSwap built on BSC. They provide 2 key differentiators in Security and Reinvestment. The Rabbit platform participates in position liquidation itself, instead of leaving this job to Bounty Hunters and liquidators, preventing attacks on the platform. Other safety features include a maximum limit for borrowing within the platform and two price verifications to protect users on the platform. Additionally, their auto-reinvestment strategy invests the MDX rewards users earn into the MDEX boardroom, while selling the CAKE rewards that users earn and reinvesting into the LP token position. Overall, opening positions in Rabbit is similar to Alpha Homora and does not take long to open up a position — users need to deposit tokens into their platform from a Web3 wallet, such as MetaMask, on the BNB network and confirm transactions on their wallet. One drawback is that users do need to deposit both assets to the pool- there is no auto-swapping on Rabbit.
Alpaca Finance was started to bring the leveraged yield farming boom to the Binance Smart Chain. They offer a wide range of leveraged yield farming options for WaultSwap and PancakeSwap. Alpaca Finance’s main draw was lower fees on leveraged yield farming transactions compared to yield farming protocols built on Ethereum. (Rabbit on BSC enjoys the lower fees as well). Opening a yield farming position in Alpaca is exactly like on Rabbit Finance as well.
Bagels Finance takes advantage of many of the key features of the yield farming protocols above, but with some major added upgrades. Ease of use is high with Bagels; just like on Alpha Homora, users only need to deposit one asset into a pool to begin the yield farming process- the protocol does the token swapping for the user. From there, the deposit and position opening process will be very similar to Alpha Homora. Bagels is built on HECO first, so fees for yield farming transactions will be lower than other protocols built on Ethereum just like Alpaca or Rabbit.
The major upgrade that Bagels Finance offers is their cross-chain protocol Dokodoa. Dokodoa creates a bridge between blockchains so that Bagels Finance can be used to farm pools on multiple chains. Bagels will be operating on HECO, BSC and Ethereum to start, and users will be able to yield farm pools on each chain from one platform. Even more importantly, yield farmers will not need to change network settings of their assets to deposit into pools on different chains. They can deposit whatever asset they have on the Bagels list, and Dokodoa will swap it for a corresponding asset that will act as their value for the pool. This means a yield farmer can have ETH on BSC, and deposit it to an ETH pool without having to swap it first. This is a game-changer that will save yield farmers on fees for participating in Ethereum pools, while also getting more users onto the BSC and HECO chains.
Leverage and Yield Farming Pools
The amount of leverage that users can take on Rabbit Finance, Alpha Homora and Alpaca is generally similar across farming pools.
Alpaca has 47 yield farming pools, 28 of which you can take 3x or more leverage on, with their USDT-BUSD pool offering the most leverage at 6x. Alpaca supports 6 base assets: ALPACA, BNB, BUSD, USDT, BTCB and ETH. APYs on their pools range from 3%- 1000%+.
Rabbit Finance is similar with 30 total yield farming pools, of which 22 you can take 3x leverage on and their highest leverage pools offer 9x leverage. APYs on Rabbit are similar to Alpaca, and they support similar base assets: RABBIT, BNB, BUSD, USDT, BTCB and ETH.
Alpha Homora offers the lowest amount of leverage on average of any of the protocols on their pools, capping at a maximum of 2.5x on their 22 yield farming pools. As the first leveraged yield farming protocol, the main barrier the platform currently suffers is that all the pools are based on ETH, limiting potential APY on their most rewarding pools, and limiting leverage.
One of the biggest advantages of Bagels over other leveraged yield farming aggregators is the amount of leverage that Bagels can offer. Let’s face it, users get into yield farming on leverage to earn the highest yields possible. On Bagels, yield farmers can take up to 10x leverage allowing them to potentially earn more compared to other protocols which only allow for 2–3x leverage on most pools. They are able to do this on our stablecoin farming pools with DAI and USDT, which is better than the competitors on these pools by a couple extra multiples; every extra “X” counts!
On other yield farming pools, Bagels anticipates being able to offer slightly more leverage than the above competitors as well. Supported assets include BAGELS, ETH, WBTC, USDT, DAI, BNB and HT, offering slightly different pairings. As the platform roadmap moves forward, the Bagels team anticipates having a wider range of supported assets, some of which will mirror other platforms. You can also expect APYs to be similar to other yield farming platforms.
Token Basics and Investment
Rabbit Finance received investment from over 11 institutional funds before its launch. The native Rabbit token is used for protocol governance and voting through staking, and rewards. The platform also has its own Stablecoin, CARROT, used to reward DAO participants. The platform uses 50% of revenue to buy-back and burn its RABBIT token to deflate the value, and uses a further 50% to provide liquidity for it’s dividend reward CARROT to DAO stakers.
Alpaca was built slightly different than Rabbit as a Fair Launch program with no pre-sale, investors or pre-mining. 87% of their supply will be distributed to the users of the protocol, with less than 9% of the tokens vesting to the team over a two-year period. Currently, they have a governance function in the works for their token so that will allow holders to vote on the future of the platform, and even capture economic value for participants in some way. As you can see below, all of their tokens are earmarked for development, community and the fair launch.
Alpha Homora’s ALPHA token also acts as a rewards, interoperability and governance token. Users who stake it to their Boardroom receive voting rights on the product level and finance level. The ALPHA token was initially launched with a circulating supply of 174.1 million tokens out of a total of 1 billion ALPHA. Their supply, according to Binance’s Alpha Finance Labs report was allocated as follows:
- Binance Launchpad Sale: 10.00% of the total token supply
- Binance Launchpool: 5.00% of the total token supply
- Private Sale: 13.33% of the total token supply
- Liquidity Mining: 20.00% of the total token supply
- Team & Advisors: 15.00% of the total token supply
- Ecosystem: 36.67% of the total token supply
Bagels has a wealth of backing from institutions and major players in the crypto and DeFi space. To date, Bagels Finance has received funding from over 20 funds, totaling more than $4.5 million USD. This is a clear belief in the game-changing nature of the Bagels project and the strength of the team, with experts from the US, Canada and China in mathematics, finance and crypto development. Even with such significant investment from institutions, the Bagels team has made sure to make the token accessible and readily available to all participants, with more than 75% of tokens earmarked for farming rewards, airdrops and market prizes.
Additionally, Bagels revenue model is built to provide the most value to Bagels users. Bagels has a Buy-Back and Burn initiative using 20% of revenue to help deflate the currency. 40% of revenue is paid back to BAGELS DAO members, of which any BAGELS holder who stakes to the DAO can receive a part of. The last 40% of revenue goes towards platform development and improvement.
Bagels DAO participants also receive voting rights to help shape the future of the platform including future interest rates, pools and supported coins.