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Polkadot Gets DeFi Building Block as DEX Aggregator Dot Finance Migrates From BSC
The project will first launch on Moonriver, Moonbeam’s canary network on Kusama, before jumping to Moonbeam proper.
Updated May 11, 2023, 4:45 p.m. Published Jan 4, 2022, 1:55 p.m.
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.
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“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 release. “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.
Read more: Polkadot Parachains Go Live, Capping Yearslong Tech Build for Ambitious Blockchain Project
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.
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