Bao Finance The Next Big DeFi Unicorn?
Bao Finance - Yield Farming for Synthetic Assets from LP tokens
Yield Farming for Synthetic Assets from LP tokens
Yield Farming for Synthetic Assets from LP tokens bao.finance
Just another yield farming project? Or maybe not.
When Bao Finance was first released I thought it will be ‘just another yield farming project’ such as the previous shrimp, zombie, etc. which most of these projects resulted in endless dumps and declining interests from farmers. What turns me off from this project the most is the interface of Bao Finance was the same as these typical overhyped farming projects which made it feels like a lazily ‘copy-paste’ project. But its documentation says otherwise.
Bao Finance is sus but with promising future
According to Bao Finance’s documentation https://docs.bao.finance/, although its sus statement of its unaudited project and the one-person self-taught development team, it promises ambitious and promising features to be added to its existing system sounds too good to be true.
Some of the features are the creation of synthetic assets, margin trading and limit orders, Options/Perpetual Futures based on staked LP tokens, and lending pools. Basically, it’s like SNX + Aave but made for liquidity providers of Uniswap, Sushiswap, and Balancer.
Its highlight is the efficiency of synthetics creation compared to existing synthetics protocols (Synthetix, UMA) by allowing users to use their existing LP tokens to create synthetic assets instead of having exposure just only to the respective base token to be collateralized for the creation of a synthetic asset.
What attracted me the most and eventually led me to ape into one of Bao Finance farm is its crazy high APY percentage. One of the farms has even a few million APY percentage but apparently, some of the farming pools are from dead projects. However, I instantly regret farming in the Bao farms as the fees were absurd, and that later on when I harvest $BAO did I realize that 95% of $BAO earned will be locked on to a 3-year vesting cycle that is 1 year delayed and eventually distributed day-by-day for 3 years! But I am not complaining now as $BAO is pretty delicious for the past weeks even for the 5% earned upfront.
The game changes
I knew right away, in the long run, Bao Finance’s overreaching goals might be achievable after reading about the Sushiswap integration with Bao in the Sushiswap 2021 roadmap (https://sushiswapchef.medium.com/2021-3e1f45cf86a2) released at the beginning of January.
More details of the partnership were released in Bao V2-The Journey medium article (https://thebaoman.medium.com/bao-v2-the-journey-86dab5a203de) by thebaoman basically stating that their synthetic issuance infrastructure will be built solely in using Sushi LP tokens. So I will be anticipating more partnerships and integrations with the Sushiswap team. If thebaoman is able to pull through these and with more experience developers building this project together, Bao Finance could be able to stand up against big players in the space in the future perhaps.
Besides, in case you are not following the crypto market, L2 projects will be the talk of the town in DeFi 2021, just bid on any projects that are built on L2, chances are you are set for the rest of 2021. I don't know though, maybe its psyops?
And guess what, the Bao Farmer contract will be deployed on the xDAI network which is an Ethereum L2 sidechain any time soon from now.
With new additional pools and more collaborations and partnerships with big players in the DeFi space, I'm sure Bao Finance will continue to build farmers’ and newcomers’ confidence in this project. The promising features in the roadmap ahead definitely provide stickiness to its users to continue to participate in the farms and hodl onto their yields creating users’ curiosity and excitement for what is ahead for Bao Finance.
Finally, these are not financial advice, and there is still a potential risk of food poisoning. You might end up puking, your funds of course. Consume $BAO responsibly. If you are participating in the Bao farms, feel free to check out the site https://baoboard.com/ for more detailed lookup that lets you sort all the Bao pools, filter between Sushiswap and Uniswap pools, look up APYs (including on non-ETH pools), and see the pool RoI which is developed by one of the Bao community members.