Polkadot Gets DeFi Building Block as DEX Aggregator Dot Finance Migrates From BSC
Decentralized finance (DeFi) tool Dot Finance is launching on separate parachains on the Polkadot and Kusama blockchains, moving away from its previous deployment on Binance Smart Chain (BSC).
Dot Finance automates and maximizes rewards for its users and helps them earn fees from other DeFi services, such as lending, trading, and borrowing. Similar to other DeFi applications, Dot Finance uses smart contracts instead of third parties to provide financial services to users, such as lending, trading, and borrowing.
“Bringing our yield aggregation products to Moonbeam is pivotal for Dot Finance’s growth trajectory,” said Nir Rozin, Dot Finance’s co-founder, in a press statement. “Merging Dot Finance’s tools for DeFi with Moonriver’s safe, secure, and resilient architecture will help spearhead Polkadot adoption while reducing participation barriers for users.”
Polkadot and Kusama are blockchains that allow developers to build entire blockchains – not mere applications – atop their own networks. These blockchains are referred to as parachains and canaries, respectively, in the Polkadot and Kusama ecosystems.
Moonbeam was the second parachain to go live on Polkadot. It brings Ethereum-like smart contract capabilities to the Polkadot network, allowing for the likes of Dot Finance to build out DeFi services for users.
The first part of the migration process will involve taking Dot Finance’s yield aggregation contracts and adapting them for Moonriver, on Polkadot canary network Kusama. The initial yield strategies will focus on liquidity pools on Kusama-based decentralized exchange Solarbeam.
Liquidity pools are a collection of funds locked in a smart contract used to facilitate decentralized trading, lending and similar DeFi services. Users earn a cut of all fees generated via such services, in a process colloquially known as “yield farming.”
Dot Finance plans to integrate with the multichain exchange Sushi to maximize the users’ returns for yield farming, in addition to many other protocols in the future, according to a press release.Source