It’s getting harder and harder to keep up with all the new jargon in crypto and DeFi in particular. This innovative industry comes up with new products and services at an incredibly fast pace, and today you’ll learn about something that makes this innovation even easier and faster – money legos.
Money legos, as their name indicate, resemble the popular block-building toy Lego. Like the Lego toy blocks fit with each other and allow a wide range of possibilities, so do the money legos. Compared to CeFi, where the majority of products come as stand-alone products, in DeFi, the projects are designed to allow integration and composability with each other. This allows different DeFi projects to compose products based on already existing projects by combining the different “lego” blocks.
The advantage is that you don’t have just to combine single blocks (products), but you can also take advantage of existing lego structures. Composability allows projects to use the existing infrastructure and build on top of it by adding extra services or products.
What are the benefits of DeFi legos on BSC?
The first and most important advantage is that on BSC, you have a diverse selection of innovative DeFi legos that come with naturally low transaction fees and just a 3-second block time. BSC allows you to maximize your returns while minimizing the costs and avoiding long transaction times associated with other blockchains.
As the network traffic shows, the BSC ecosystem is bustling with activity and innovation. Millions of daily transactions flow through the different DeFi projects made by hundreds of thousands of regular users. With more than 530 DeFi projects building on BSC, there’s a perfect product for everyone.
There’s no easy way to filter out only DeFi legos, but the total value locked (TVL) in DeFi on Binance Smart Chain is over $19.8 billion, and the ecosystem boasts almost 83.4 million active addresses, which shows the attractiveness of BSC.
Are DeFi legos on BSC safe?
There are two parts to this question. The first part is whether the BSC blockchain itself can be considered safe. The BSC network is safeguarded by a set of 21 validators elected every 24 hours based on the highest voting power (staked BNB) and their stability, uptime, and other metrics. These validators can be community-operated pools of individuals, projects-owned nodes, or any individual, business, or organization that meets the requirements and qualifies with their BNB stake. This ensures decentralization preventing a single point of failure attacks or overtaking the network by malicious actors. The BSC blockchain itself has never fallen short on its security, and the blockchain security has never been breached (0 successful attacks).
The second part is the security of the project itself and its smart contracts. Here are a few potential issues as not every project building on BSC has a top-tier security team. One potential threat is external attacks exploiting bugs or vulnerabilities in the smart contract, such as the infamous flash loan attacks. The other issue is internal attacks such as rug pulls or scams (projects designed with malicious intent in mind).
The BSC ecosystem is actively fighting both of these threats. While projects can prevent external attacks with vigorous security measures and audits or certifications, internal attacks require users to do their own homework. BSC security projects such as CertiK or PeckShield offer their security services to dozens of BSC projects that underwent their auditing process and security checks to prove to users that their projects are safe and teams are actively working on eliminating potential threats. BSC recently partnered with Immunefi to provide a bug bounty program and allow white hat hackers to search the BSC ecosystem for vulnerabilities and receive rewards for their work.
If you’re interested in improving your security knowledge and protecting your data and wealth, check out our Security First Toolbox with essential tips.
How to find secure DeFi projects on BSC
The famous Bitcoin saying “Don’t trust; verify” probably based on the Russian proverb “Doveryai, no proveryai” which literally translates to “trust, but verify,” should be also applied when interacting with DeFi. DeFi, in its nature, shouldn’t require the user’s trust as the project (code) should be verifiable, but at the same time, we’re all aware that it’s very hard to interact with a project without trust.
Like in any other industry, in DeFi, there are also malicious actors looking to make money of you. For that reason, you mustn’t blindly trust marketing materials promising exceptional returns or free tokens. To help you verify what you see, we gathered a few websites that provide you with insights and information that can help you make more informed decisions.
This platform gives you an overview of the whole BSC ecosystem in a slick and easy-to-navigate interface. On their website, you can find information about individual projects segmented into specific categories, see their performance, verify that you’re visiting their official website, or explore interesting charts and rankings.
If you didn’t join crypto 15 minutes ago, you probably know what CMC is. Coinmarketcap is the world’s most popular platform for cryptocurrency prices, charts, market capitalization, exchange statistics, and more. If the metric can be expressed in numbers, you’ll find it here. Please note that CMC doesn’t automatically add all tokens to their database, and the fact that a project (token) cannot be found on CMC doesn’t automatically indicate that the project is not genuine (or vice versa).
Best tracker and analytics platform for decentralized apps (dApps) across more than 15 blockchains, including BSC. Here you can find different statistics, rankings, and reports on blockchain development in NFT and DeFi categories, but also portfolio tracker, informative blog, and more.
CertiK offers multiple platforms and products, generally focused on blockchain security and oracles. CertiK Security Leaderboard is a great place to explore security ratings of different projects, community alerts, trending projects, and also projects whose security recently decreased.
By combining the resources from these platforms, you can verify the claims made by the projects, review their performance, and assess their security. This helps you with your research (DYOR) required to interact with DeFi on BSC and other blockchains safely.