The rise in defi adoption (or rather the locked funds in their smart contracts) is probably the greatest thing that happened to crypto sphere in 2020, and it's continuing this year as well.
Leading in the world of defi are platforms built on Ethereum smart contracts. But since nothing is perfect, gas fees make usage of these platforms prohibitive to most people.
Where there's a problem, there is at least a solution. Most of the times anyway! So other blockchains come from behind with lower fees.
From what I read recently, the fees on Binance Smart Chain (BSC) are about x10 less than on Ethereum, if not more at times. The drawback: BSC is centralized.
If you can live with that (or simply out of alternatives), BSC may be a solution to access defi-like platforms offering impressive, maybe even outrageus returns.
With its risks, of course. I believe everyone who has taken at least a marginal interest in defi knows by now about the risk of smart contract code bugs, as well as impermanent loss. And if you are interested in defi for its decentralized aspect, then BSC comes with its own risk here: it's only theoretically decentralized.
But that's why there is such a thing as a risk-reward factor: the higher the risk, the better the reward.
Personally I haven't used defi platforms on Ethereum because I found gas fees unnacceptable high. For my budget at least.
With BSC, there's a different story. The fees aren't so high, even for my budget.
With that issue out of the way, should I or shouldn't I plundge into a platform that runs on BSC?
That is a question I keep asking myself.
There is also the risk-reward factor. Am I ok to seriously elevate the risk for a significant portion of my portfolio to access those insane rewards? At the moment I'm leaning towards no.
I hear Leo will very soon come to BSC as bLeo. That may play a role in my final decision or not.
Soon there will also be LeoFi, where some of my staked LEO can be put to work. And at zero fees, probably.
The physical world has been on the verge of collapse for a while now and keeps getting cosmetized until that won't work anymore. I don't feel like taking more risks under these circumstances. But that's just me and my risk tolerance. And everyone has their own apetite for risk.
