No financial advice.
Developers has spoken, Soar.fi integration into the BSC network is imminent and it will be here before you know it.
A lot has been discussed about the use case of the products developed for the Soar.fi ecosystem, but the integration in the BSC net is one of the most important and expected features to boost the project adoption.
*If you are still not familiar with the project and their products, Eth mainnet, Uniswap and liquidity pools, I recommend to read this article first:
Why and how SOAR.FI Liquidity Migrator works?
·What does BSC cross-chain implementation really mean?
- Soar token will be available to buy and trade in Binance Smart Chain.
- Liquidity migrator and other products will be compatible.
There are some obvious reasons why BSC integration will benefit the soar environment in the short and long term, but we are also going to get a deeper insight about its functionality and how they will actually make the project start to soar thanks to the momentum it will generate.
But first, we must to clear out some concepts:
·What is BSC?
Binance smart chain or BSC is a centralized Eth fork created by Binance which is validated through “proof of stake” and not “proof of work”, as the Eth mainnet does. This method facilitates lower fees and a higher rate of transactions per second, which is very attractive for people who don’t want to pay the exorbitant fees that Eth mainnet has at this moment, at least until Eth2.0 implementation.
The similarity between the Eth mainnet and the BSC also enables that Dapps (Decentralized applications) can work in both chains with almost no change in code giving that both use the same solidity structure.
Low fees of the BSC net and the compatibility with the Eth Dapps has recently brought a lot of traders, developers and investors into this ecosystem, which has grown exponentially in the last months, making the interoperability of tokens a must for projects that intend to grow in the DeFi space.
·How cross-chain interoperabitily works?
Giving that Eth and BSC nets are two different blockchains, this means that one chain can’t know what’s happening in the other. So, how is this problem, solved?
Pegged tokens and bridges.
Binance and other developers have implemented services to swap tokens between chains called “Bridges”, this tools allow people to swap ERC20 tokens for their equivalent in BEP 20 and vice versa.
Since ERC20 can’t exist in the BSC net, equivalent tokens with pegged prices must be issued to facilitate these bridges. That’s what we know as “wrapped tokens”
A wrapped token is just an equivalent that represents another chain token. This is done by locking the original token into a smart contract custodiam that issues the equivalent token and sends it to the same address, but in its chain.
For example, if I want to swap my ERC20 USDT into BEP20 USDT, I will need to send my USDT into the bridge and I will receive the same amount of USDT equivalent; this also can be done in the opposite way. For doing this swap, you must pay fees in both nets.
·Would I be able to buy Soar in BSC?
Yes, but you are going to buy the BEP20 version of Soar. Don’t worry, the price will be pegged so that means you will still go to the moon.
What will be the differences, advantages and disadvantages of owning one or another? As dev 0xSoaR said:
There will be no frictionless rewards on BSC network and we are letting it as it is on Eth. By doing so we will remove the entry barrier to boost adoption on BSC, and then users can swap their tokens on Eth to start receiving rewards.
BSC will be used for trading, Eth for holding and rewards.
·Will the ERC20 and BEP20 soar price be the same?
Yes, mostly, both prices will be pegged, but there could be a very little variation from time to time between them since the crypto market is really dynamic.
How is this done?
Through price arbitrage between both tokens, which is done mostly by the liquidity pool wrapping and arbitrage bots.
·Wouldn’t rewards for holding ETH decrease since all the volume will go to BSC?
The answer is the exact opposite.
The “real” tokens are the ones that are in the Eth mainnet, so no new tokens will be issued into the BSC, this implies that every time an ERC20 Soar is wrapped into BEP20 Soar, the 1% tax will be charged. When the demand for Soar starts in BSC, the price arbitrage between the pegged tokens will force the increase of constant demand and wrapping of ERC20 soar as well, this will traduce in a volume increase for both nets, resulting in more yield rewards for the Eth Soar and making ERC20 holding viable.
·Where and how can I get BEP20 Soar?
There will be two possible options to do it:
SoarSwap: If you already have ERC20 soar but you want to trade it in the BSC, Soar.fi will launch its own bridge to wrap and unwrap Soar. (Consider the fees in the Eth side before doing it).
Pancakeswap: Think of Pancakeswap as the very exact copy of Uniswap, but in the BSC and without high fees. Here you will be able to swap your BNB or any other BEP20 token for Soar and vice versa.
·Will the liquidity migrator work in BSC?
To be aviable in pancakeswap, a BEP20 Soar Liquidity pool with a SOAR/BNB pair must to be done. In this case, the process for using the liquidity migrator will probably be the same as in Eth mainnet, but you will receive BEP20 SOAR LP Tokens.
There’s still no information about soarx farming in this pool, one possibility is that you will receive the BEP20 version of soarx, so this could also imply a BSC version of novapad.
·Since lower fees is one of the main advantages of the LM, won’t it be useless in chains with low fees?
The liquidity migrator will not make the rug pulled projects get into soar by itself, LM is a tool to make the LP swapping easier for individuals who are looking for more profitable investments and also enable DAOs to execute massive LP migrations seamlessly and without any troubles nor risks, which is something that couldn’t be done before Soar.fi LM.
The real incentive to get a share in the soar LP will be Soarx farming since it will be the only way to get it. You will also be able to get loans with your LP tokens as a collateral and use the tokens to farm even more yield.
Soarx will be the utility token of the nova pad, which is the star product. The value of soar is not a specific product, but the interaction of all of them working together
·Why BSC integration will boost soar adoption?
- It has already been said that BSC is growing exponentially at this moment. A big bunch of small investors have gone there in the search of lower fees to trade their tokens and a lot of them are just waiting for the possibility to buy soar from pancakeswap to invest in the project.
- Since the price entry barrier is now broken, the real marketing will now start.
- BSC has a dead sea of failed projects Soar could absorb.
- Other projects in the past had boosted their adoption thanks to the cross-chain interoperability implementation.
- LM will now have a starting use case in the BSC since the low fees will attract people who wants to test the project.
·Conclusions:
Soar.fi is a project whose value falls not only in just one product, but in the interaction of all of them, making it its own black hole ecosystem. This critical mass will absorb all the failed or inactive projects around the DeFi space, and BSC implementation will mark the beginning of it.
If you want to know how to buy Soar in Uniswap before it is launched in pancakeswap, check this article.
Telegram: @Walitz
