Cofe vaults are like automated DeFi experts who find the best strategies to invest in DeFi platforms. Cryptocurrency invested in Cofe Vaults is put to work on different DeFi protocols. This includes providing liquidity, collateral for loans, and using the yields from one protocol and re-investing in other DeFi platforms.
The strategy for investment is decided by a vote on the proposals from the community.
Understanding what goes on beneath the vault is what brews the magical returns out of these vaults. Yield is achieved by providing the asset for lending, liquidity provider (LP) on automated market makers (AMM), or farming strategies.
Earning in DeFi involves a variety of things:
Earning from fees on decentralized exchanges.
Returns from the interest paid for lending on decentralized loan platforms.
Earning from code and idea contributions for DeFi apps.
Yield Farming of liquidity and governance tokens.
And many more
CofeVaults is deployed on the BSC Network (Binance Smart Chain)
Due to high demand and high transactions on the main Ethereum network, CofeVaults has been adapted to be compatible with BSC.
The main advantage that BSC has are the fees, in the main Ethereum network interacting with a Smart Contract can cost from $ 10 to $ 100 (even more in the last days) and in BSC the cost is less than $ 1.
Learn how to connect your Metamask wallet to the Binance network:
1:Connect to the platform and select your wallet: https://bsc.coffeeswap.finance/
2:Deposit. For instance, to deposit in the FIL vault, the users can set the amount from the balance in their wallets.
4: Paying the Fees
After confirmation, the amount an fees for executing the smart contract to add to the vault is calculated. Comosiones less than $1.
5: Withdrawal from the Vaults
Withdrawal from the vaults can come from two sources, the active strategy vault or Cofe vault reserve. If it is coming from the reserve, no fee is charged for withdrawal. However, if liquidity is taken off of the DeFi strategy in implementation, a 0.5% withdrawal fee is charged.
The subsequent earnings from the vault are adjusted accordingly to the new balance after the withdrawal. The earnings are mentioned on an annual basis but are paid for the time the liquidity is held in the vault. Hence, if the average APY for the vault is 100%, in 6 months a 1 ETH deposit will earn 0.5 ETH in the vaults.