There’s a lot going on in the markets, and all sorts of yields to chase, from guaranteed points to prospective airdrops, and more. Recently, $SOL has been perhaps the top topic of discussion, while $BNB is quietly neck and neck with $SOL by marketcap. The two coins consistently have been flipping each other these last few months for the #4 coin spot.
BNB Chain has its own ecosystem with opportunities, one being Segment Finance. Segment Finance is a liquidity market that has seen some TVL growth recently, with some unique opportunities for those looking to lend blue-chip assets for a yield.
What is Segment Finance?
Segment describes itself as a decentralized and non-custodial liquidity market on BNB-chain. Audited by Verichains late last year, Segment was originally based on the framework of Sonne Finance, the first native lending market on Optimism.
As a friendly fork, the resemblance can be noticed between the two protocol’s lending markets design, and native token LGE and staking mechanisms.
The main feature of Segment, which holds the majority of the protocol’s TVL, is its Core Pools. The core pools serve as lending and borrowing pools for blue-chip assets including $BTC, $ETH, $BNB, $USDC, and $USDT. There is nearly $3M in supplied TVL, with $2M in borrows against this collateral. There is an additional ~$900k in liquidity which is available to be utilized and borrowed.
Due to the early stage the protocol is in, incentives are being provided in $SEF, creating some attractive borrowing and lending rates…
$BTC can be borrowed while earning a positive 3%+ APR, as well as $USDC which can earn ~0.9%. $USDT has a borrow rate of nearly 4%, but its supply APR is over 20%, creating a net APR that is well in the green. $ETH and $BNB both have minimal borrow APRs, at ~0.15% and ~0.23%, respectively.
These sorts of opportunities are typically only found on new and emerging protocols, and usually don’t last long, leaving a likely-narrow window of opportunity to take advantage. With these current rates, looping, AKA borrowing against collateral, depositing borrowed funds as collateral, repeat, may be a viable strategy. This is particularly useful for those who actually want to acquire the $SEF token with the high distribution incentives currently available, similar to Radiant Protocol’s initial popularity due to its $RDNT incentives for looping.
Of course, the original function of these pools is to lend and borrow assets, with attractive APRs layered on top. Supplying and borrowing assets functions similarly to how it would on most platforms, with supplied assets giving ‘seTokens’ ex. seETH, similar to Aave’s aTokens. These tokens must be returned, or redeemed for the deposited collateral.
The protocol will also introduce isolated pools soon. The team also aims to collaborate with other DeFi teams, in addition to its current integration with Thena’s $THE. The Thena integration consists of Segment bribing Thena on a weekly basis; this $THE is then distributed to $SEF stakers. This is similar to Sonne Finance’s integration of both $VELO and $AERO, allowing $SONNE stakers to earn these reward tokens as an alternate attraction in case $SONNE rewards are not enough for users to consider staking.
Segment LGE
Segment recently held their LGE (Liquidity Generation Event) for the native $SEF token on January 8th. The token distribution is still in its early stages:
$SEF can be staked into sSEF, earning ~290% APR in $SEF and $THE, around $425 in daily revenue.
Alternatively, the same APR can be earned by staking $SEF for uSEF, to earn rewards in $USDT and $THE. These two vaults contain 3.36M and 1.63M $SEF locked, respectively.
It should be noted that there is a 1-week waiting period for unstaking from either pool. The initial SEF distribution is as follows:
As it pertains to ecosystem airdrops:
-2% of the $SEF supply was airdropped to the top 500 $MENDI (the native token of Mendi Finance) stakers.
-2% of $SEF supply was airdropped to $MARE (the native token of Mare Finance) stakers.
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