BiFi’s single transaction flash loans boost profitability
BiFi X, the exchange and lending subsection of Bifrost Finance, has pushed DeFi lending into a new era of accessibility and profitability. Thanks to single transaction flash loans, investors can make the most of their staking and loans without the need to switch their assets around different pools.
Bifrost Finance revolutionized the DeFi space by allowing crypto enthusiasts to interact with both the Bitcoin and the Ethereum blockchains easily. BiFi X is the natural progression of this revolution, bringing a new age of lending to the DeFi community.
There is a tangible divide between the BTC and ETH communities. The reasons behind it are numerous, however, one of the main factors in this separation is the lack of interoperability between the two. Bifrost Finance’s main goal is to bridge this gap, and give users an efficient way to use both BTC and ETH on the same platform.
How does BiFi X work?
The BiFi X platform is separated into two main functionalities – Earn and Bet. With Earn, investors get the opportunity to maximize their yield farming rewards in a single transaction. With Bet, investors maximize the profit potential on margin trading positions in a single transaction.
BiFi X Earn allows users to combine a normal deposit with several flash loan deposits in order to leverage the maximum possible earning potential. For example, an investor has 1 ETH and puts it into a yield farming pool. Earn allows that investor to borrow a further 3 ETH and put it towards the same pool, boosting the whole stake to a total of 4 ETH. In this scenario, the investor ends up with 4 ETH in deposits and 3 ETH in borrows — earning BiFi rewards for 7 ETH worth, instead of the 1 ETH they started with. In this sense, the BiFi X Earn functionality allows for seven times better leverage.
BiFi X Bet functions similarly, however, instead of only solid capital, investors deal with margin trading as well. Margin trading is an interesting way to leverage profits, even though it’s riskier than simply yield farming. Imagine that the price for 1 ETH is currently 1000 USDT, however, you believe that it will go up. With BiFi X Bet, you can place a bet of 1 ETH. Importantly, you can boost it with a flash loan of a further 3 ETH by borrowing 3000 USDT. In this scenario, if the price goes up to 2000 USDT, you will only need 1.5 ETH to pay back the borrowed 3,000 USDT. This means you will still have 2.5 ETH left, which would be worth $5,000. If you just held on to your initial 1 ETH, that would be worth $2,000.
Of course, it is important to note that these are simply hypothetical scenarios outlining the best possible turn of events. With both margin trading and yield farming, there is a degree of risk of losing your whole investment. Traders should be aware of the risks involved in borrowing and lending.
BiFi Tokens
Before you get a chance to use the BiFI X platform, you need to load your wallet with some BiFi tokens, as the platform uses them to cover gas fees.
You can get some BiFi tokens through a swapping service on Ethereum or on Binance Smart Chain. You can find a full list of the exchanges supporting BiFi here. Another convenient way to get your hands on BiFi tokens is through the native MetaMask swap service. It also supports the BiFi token.
What is Bifrost Finance?
Bifrost Finance, or BiFi, is a decentralized finance solution aiming to bridge the gaps between different blockchains. BiFi is built on the Bifrost multichain middleware platform. This allows investors to easily use all of their holdings regardless of the chain. The Bifrost multichain also enables developers to use multiple blockchain protocols simultaneously and seamlessly when creating decentralized applications.
The Bifrost Finance ecosystem continues to grow, and BiFi X is just the latest addition. By smashing the barriers between different chains, Bifrost Finance aims to make DeFi more accessible than ever. Their services allow both BTC hodlers and crypto enthusiasts interested in altcoins to participate in DeFi through the same platform.