What is Bao Finance (BAO)?
Bao Finance is an open-source, community-run project that offers Layer 2 decentralized finance (DeFi) solutions. The protocol aims to create a multi-network suite of applications that provides cross-chain DeFi services to users. Bao Finance has already launched its main project and franchise models on xDai, Polygon, and Binance Smart Chain (BSC). The franchised versions are Bao Farms, BaoSwap, and Bao Synths.
The project is powered by the native token BAO. View the BAO price in the chart above to know how the project is performing in the market.
Bao Finance allows users with LP tokens from other protocols to create synthetic assets within the network. Synthetic assets are tokenized derivatives that mimic the value of another asset. On the other hand, LP tokens are digital tokens issued to liquidity providers on a decentralized exchange (DEX). Such DEX runs on automated market maker (AMM) protocol. LP token holders can generate synthetic assets (synths) up to their collateral limit. Synths allow users to build and own an open financial data market. You can use such data to build and own any DeFi business. Additionally, you can package the data and sell it for others to build on.
Bao Finance is solving the challenges with the existing synthetic asset solutions. Systems such as Synthetix requires users to put their assets into a base token to collateralize their synthetic asset. In such a system, you take on risk and loss exposure to your underlying asset. The assets also remain idle, not used for other purposes.
Bao Finance uses the existing assets from other protocols (your LP tokens) to create synthetic assets. This approach gives you exposure to your underlying assets. Furthermore, the assets are optimized such that they do not remain idle. You continue to earn staking fees and liquidity pool fees from your assets.
Use Cases of BAO Tokens
BAO coin is a utility token of Bao Finance. The token holders can earn fees by staking their LP tokens as collateral. Additionally, you can earn rewards by investing the tokens in yield farming. Furthermore, BAO is a governance token, enabling holders to vote in governance polls for various proposals.
BAO tokens are listed on popular exchanges. You should conduct a BAO price analysis if you are planning to buy the tokens. You can get accurate data about the Bao Finance price from the live chart above.
Who Founded Bao Finance?
Bao Finance (BAO) was founded by Bao Man, an experienced developer. Bao Man is also the developer of Baoswap.xyz, Pollyfinance.com, and Pandaswap.xyz.
Tokenomics of BAO
The initial total supply of BAO tokens was set at around 1.5 trillion BAO. However, the community can vote to change the caps of the token. The community would want to set an effective cap, that allows a sufficient supply of the tokens while preventing inflation. As such, the stability of the ecosystem will be maintained and Bao Finance price will be protected.
The token distribution is designed such that when a user earns tokens, 95% are locked and only 5% are unlocked. This mechanism controls the amount of BAO crypto assets released in circulation to ensure the stability of the BOA price.
