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The Ultimate Beginner’s Guide to CafeSwap

With its Cafe Smart Vaults & Dual Farms, CafeSwap is revolutionizing staking, yield farming, and yield optimization not just on BSC, but across all DeFi platforms.

With the launch of multiple blockchains across the DeFi space, we are seeing a lot of competition among the various farming and gaming protocols. Despite the promises made by newer blockchains, the Binance Smart Chain remains the preferred network for fast transactions at a much lower fee than the Ethereum network.

You must have heard of SushiSwap and UniSwap. These are AMMs on the Ethereum network. Considering the high transactional fees on the Ethereum Network, CafeSwap Finance set up shop on the Binance Smart Chain (BSC).

With their dual farm concepts, CafeSwap is revolutionizing staking, yield farming, yield optimization on DeFi platforms. They have come up with various offerings such as CafeSwap Smart Vaults that have given them an edge over their competitors. Their NFT Dual Reward Boosters are attracting more investors towards their Initial Cafe Offerings (ICOs).

Launched in February 2021, as a fork of PancakeSwap, CafeSwap is now a full-fledged DeFi protocol. It has a total value locked (TVL) of $9,082,364.

Here’s everything you need to know about CafeSwap Finance and its dual farming concepts. 

What is CafeSwap?

CafeSwap Finance is an automated market maker (AMM) and yield farming protocol on the BSC network. It automates digital asset trading.

CafeSwap has its own Decentralized Exchange (DEX) where you can buy and sell tokens. You can swap CafeSwap’s native tokens such as BREW and MOCHA here.

There is a wide range of activities offered on the CafeSwap platform. You can stake your tokens in CafeSwap pools, buy LP tokens and add them to yield farms to harvest yields in the form of BREW or MOCHA tokens.

Smart Vaults and Dual farms are specialty offerings from CafeSwap that maximize the returns on your investment, with the power of auto compounding.

CafeSwap also has its own Initial Dex Offering (IDO) platform, known as the Initial Cafe offerings or ICO. Other features of this hot and trending platform include CafeSwap games, BREW lotteries, Referral Programs, and Strategic Partnerships,

Let’s check them out one by one.

CafeSwap Tokenomics

CafeSwap has two different tokens - BREW and MOCHA.

What is a $BREW Token?

The native token of CafeSwap is $BREW. Once you have a $BREW token in your kitty, you are part of the CafeSwap community. You can now participate in the various projects on this platform.

As we all know, AMM keeps the DeFi ecosystem liquid via liquidity pools. This liquidity is provided by the CafeSwap community. The brewers can take part in yield farming, staking, ICO’s, lottery, and much more to earn $BREW tokens. As a $BREW holder, you can take part in the core pools, which is CafeSwap’s native $BREW staking pool. You can also participate in the other pools CafeSwap has partnered with.

The CafeSwap community is the brewers of this space. The brewers can assert and have their voice heard in the decisions regarding the running of the platform - from fee-sharing to block emission rates and more. So if you want to be among those who call the shots, be a part of the community by getting hold of their native token $BREW.

What are $MOCHA tokens? 

CafeSwap has also introduced a new flavor to the Binance Smart chain - a deflationary token known as $MOCHA. 

Wondering what a deflationary token is? 

The maximum supply of $MOCHA tokens is capped at 500,000.

The supply of deflationary tokens decreases with every transaction. So eventually the rare token supply will decline with each passing day. It is like an add-on card that gives you limited access to VIP privileges.

The rare token was introduced via an IFO ( Initial Farm Offering). IFO is a unique farming event to raise funds.

With $MOCHA tokens, you can participate in dual farms. There are also separate staking pools just for the $MOCHA tokens.

It will be interesting to learn the role of $MOCHA in dual farming. So do keep reading!

How to Use CafeSwap

So, are you all set to invest and reap some benefits with the variety of opportunities available on CafeSwap?

The first step is to get some $BREW tokens. This will enable you to take part in liquidity pools, staking, farming and so much more. It is quite easy to use, thanks to the easy-to-navigate user interface.

Investors on this platform are fondly referred to as the ‘brewers’ and the actions you do here are compared to brewing the perfect cup of coffee. As you learn how to make the best use of the CafeSwap platform to make great investments, you are well on your way to learning how to brew the best coffee out there. So sit down with a hot cup of coffee to energize you and get started with the action.

Connect your wallet to CafeSwap

1. Head to https://cafeswap.finance/.

2. The next step is to connect your wallet. So click on “Connect Wallet” in the upper right corner. CafeSwap supports many BSC-compatible wallets.

A dropdown menu of options will appear. For this tutorial, I am connecting my MetaMask wallet.

Read more: The Beginner’s Guide to Metamask

Now that your wallet is connected, you are all set to brew the perfect coffee. Your next step is to get some $BREW tokens.

Buying $BREW tokens

To buy $BREW, you need to head over to the DEX app of cafe swap.

Click on ‘Trade’ from the top menu options on the CafeSwap website.

Even though you connected your wallet to the site before, you will need to connect your wallet here once more.

Set the currency you want to swap for $BREW. You can use BNB, ETH, CAKE, USDT, BUSD, etc.

Now click on the ‘select a currency’ in the second box and choose $BREW.

Enter the amounts you wish to trade for. At the current price of $0.79, you can get over 470 BREW tokens for 1 BNB. You can also buy MOCHA tokens the same way.

So now that you are armed with some $BREW or $MOCHA tokens, let’s see what all we can do with them on the CafeSwap platform.

Staking in CafeSwap Pools

The process of staking is pretty simple. You buy BREW or MOCHA, stake them and earn back even more tokens. If you are a beginner at DeFi protocols, then this is where you should start.

To get started with staking your token, click on ‘Pools’ from the top menu options.

Or, on the homepage itself, you can click on the box ‘Earn BREW in Staking Pools’. Both these links take you to the same page.

Here you can see various pools including the BREW Pool.

You can also stake BREW or MOCHA to earn other tokens such as CZF, KALA, HELMET, EROS, PEAR, DUEL, etc.

So how do you do the staking? It’s actually quite simple. If you have BREW or MOCHA in your wallet, then choose the pool you want to stake in.

Assuming you are choosing a pool that requires you to stake BREW, (the DUEL Pool from the above image) click on ‘Approve BREW’. Your wallet will pop up asking you to confirm the transaction and pay the gas fee.

Now you need to select how many tokens you are staking, enter the amount, and then stake it. There will be one more gas fee payment for this action.

That’s it. You have staked your BREW in a staking pool and will now start earning the token promised. The DUEL Pool rewards you with DUEL tokens, valued currently at $0.099 per token. DUEL is a gaming token on BSC. Note that this pool offers 171.72% APR (annual percentage return).

Always research the tokens you are investing in, check out the APR, and be aware of what you are getting yourself into. Crypto and DeFi are highly volatile investments that are subject to market risks.

What more can we brew? We have explored the safe options. So let’s check out something a bit riskier. Yield farming! They offer much better returns than staking.

But before getting to yield farms, you need to know about liquidity pools and LP tokens. You need LP tokens to do yield farming.

Liquidity Pools in CafeSwap

When you add liquidity to pools in CafeSwap, you get some LP tokens in return. This usually requires you to add equal values of two different tokens such as BREW and BNB or BREW and DUEL to the liquidity pools. Then you get back BREW -BNB or BREW-DUEL LP tokens accordingly.

These tokens serve as your share in that particular pool. You can add more or withdraw your funds from these liquidity pools, any time you want.

Before deciding on the liquidity pair, check out the various farms on CafeSwap to choose a combo that offers high APR.

CafeSwap even allows you to create your own pool. Exciting, isn’t it?

You should be wary of the risks associated with liquidity pools and yield farms - such as Defi Rug pulls and impermanent loss.

Security and Audits: CafeSwap Finance is a platform that has been audited by very reputable auditors such as Hashex and Certik. This definitely makes it a safer platform compared to other newly launched platforms in the DeFi space.

Parameters for Choosing a Liquidity Pair

You will need to keep in mind a few parameters while choosing the liquidity pair. Let us take, for example, the core liquidity pool of CafeSwap: BREW-BNB.

As you can see, many parameters are mentioned here. The total liquidity of a pool will help you gauge the size of the pool. The APR ( Annual percentage return) is the yearly interest you earn on the investment.

Ensure you choose a realistic return rate. Apart from the Core pool, CafeSwap has many other pools that it has partnered with. You can view the details of each one. You might come across liquidity pools giving you over 1000 percent return, these are often signs of a rug pull. If something seems too good to be true, it probably is. So please DYOR (Do your own research) before investing your money.

How to Buy LP Tokens on CafeSwap?

Choose a pair of tokens for creating LP tokens. Keep in mind that you need to add equal value of both the tokens in the trading pair to the liquidity pools.

You can view the pairs available on https://info.cafeswap.finance/pairs

To add liquidity, click on the ‘Trade’ option from the top menu of the site. Once you have the DEX page, click on liquidity.

Click on ‘Add Liquidity’.

I have chosen to take the BREW-WBNB pair as an example.

 

You can now input the number of tokens you are willing to add to the pool. You will notice that, when you enter the input value of the first token, the second gets filled automatically. Interesting to note that the quantity will differ, but the value is the same( WBNB = 467.54 BREW). 

Make sure you have adequate quantities of both these tokens and then proceed with the transaction.

Confirm the transaction when the wallet pop-up appears and then you shall receive the LP tokens in your wallet.

Now that you have the LP tokens, let’s head over to the farms.

Yield Farming on CafeSwap

Farms are where you can stake your assets into a lending pool. Other users borrow from these pools. The repayments and fees go back to the pool. This compensation gets equally divided among the investors who provided funding to the pool.

Yield farming has been one of the engines of growth in the DeFi market. It is like a dividend on your investment. We put our virtual assets to work and generate money even as we sleep. The process of framing is very much similar to staking. It is a high-risk investment but with a high reward too. Yield farming is also known as liquidity mining. The estimated returns from farms are calculated via APY (Annual percentage yield).

How to Stake LP Tokens in CafeSwap Farms

To get started with farming, click on ‘Farms’ in the top menu of the CafeSwap website. You can also click on the following section on the homepage.

The CafeSwap platform started out with only a few farms in the first quarter of 2021, and today the list is endless. CafeSwap has partnered with many other Dapps to offer you a wide variety of LP token combinations with stunning APRs.

I am actually an ApeSwap fan and I just love BANANA tokens. So let’s check out the BREW-BANANA farm. It has an APR of 156.51%. That’s a pretty reasonable APR compared to the more unrealistic ones out there in the DeFi ecosystem.

Read more: Beginner’s Guide to ApeSwap

So, if I am holding some BREW-BANANA LP tokens in my wallet, then all I have to do is approve the contract to allow the LP tokens to be taken from my wallet. Then I have to choose the amount of LP tokens to add to this farm.

Once the amount is entered (I can click MAX to add the full amount), I just need to click on ‘Stake LP’. I have now successfully staked my LP tokens in the yield farm. I will now earn $BREW tokens as my reward for the duration my tokens remain on this farm. I can choose to harvest my yields or unstake my LP tokens at any time I wish.

Are there any risks to yield farming?

We all know the LP token is a pair of coins. If one of the tokens in the liquidity pair loses its value drastically or if one’s token price climbs really high while the other hasn’t moved much, what do you do?

Of course, it is a virtual loss/gain until you decide to withdraw. But when you finally do withdraw your funds, you may face impermanent loss. Usually this loss is offset by the gains from the farms. That's why yield farming is so popular. Still you must understand what all this means, before jumping on this bandwagon.

You track your DeFi portfolio using the DeFiMax portfolio tracking tool and easily keep track of all your investments across multiple farms in the Defi ecosystem.

CafeSwap Smart Vaults

Let us head now to the Smart Vaults, another place for staking your tokens. The best part about smart vaults is auto compounding. As you can see in the below diagram, CafeSwap Smart Vault is a layered strategy.

Dual Farm MOCHA Mining

Users can deposit liquidity into the smart vaults. On depositing BREW tokens, you get svBREW tokens in exchange (as the receipt for it). These are the smart vault LP tokens.

We can now take these svBREW tokens and stake them in the MOCHA pots. Now, we can earn the MOCHA tokens as a reward for staking. The icing on the cake is we can stake the MOCHA tokens harvested, in MOCHA pools, to earn even more MOCHA for you.

One thing to note is that svCafe tokens cannot be transferred to any other wallet. This can lead to the loss of these assets.

Let us see how it exactly works. From the top menu of the website, click on ‘Smart Vaults’.

As you scroll down this page, you will be able to see the various CafeSwap Smart Vaults. There are vaults for token pairs invested in liquidity pools within the Binance Smart Chain ecosystem. You can also invest single tokens in the lending platforms.

Choose a pool and get the corresponding LP tokens. (Refer to the previous section on - How to Buy LP Tokens on CafeSwap, if you need more help with this step) Once the LP tokens are in your wallet, you can deposit them in the chosen smart vault.

Here we are choosing a single token smart vault - the BREW staking pool. The annual percentage yield (APY) is currently 158.18%. This includes all the compounding as well. The daily interest is at 0.26%. The TVL shows the total value invested in this vault by all users.

Note: APR is the simple interest rate for a year while APY is the yield that you get when this rate gets compounded. With APY, profits on your assets are generated exponentially.

To use the BREW smart vault, instead of LP token pairs, we just need some BREW in our connected wallet.

Click on the ‘Approve Contract’ and then enter the amount of BREW you want to deposit here. Now, you will get a vault share token (svCafe) that represents your deposit share.

The smart vault works as an automation tool that repeatedly reinvests the profits from your deposited funds to attain high levels of compounded interest. Your profits from the deposited funds are harvested and reinvested every four hours. This increases your profits even more.

But this doesn't end here. CafeSwap has even more surprises in store for you - the Dual Farms!

Profits can be maximized by using Dual Farms.

So without wasting any time, let's head straight there.

Dual Farms on CafeSwap

So, what exactly are Dual Farms?

As the name suggests, your seed investments can be harvested from two farms - hence the name dual farms. The smart vault serves as the first farm while ‘the dual farm’ is your 2nd farm. Only some of the smart vaults offer dual farming, so choose them smartly.

The image below shows a BREW smart vault that has a wallet balance of 5 BREW. Since this image is from a time where the tokens had just been staked, there is nothing yet to withdraw.

Note the “Dual Farm” icon on the top left corner of the above image of the smart vault. Click on this icon to get to the page that offers you various dual farms, and more importantly, the dual farm of the smart vault you staked your tokens in.

Although your profits (MOCHA) are harvested and compounded automatically (by the CafeSwap team), you can still click on the Harvest button any time to reinvest your profits.

But isn't that paying gas fee unnecessarily?

Well, as per the CafeSwap documents: “Any user can call the harvest function in the strategy and auto compound the profits for all users and he will be rewarded with 0.5% fees for the gas fees paid.”

Brewery Products

There is more to CafeSwap than just brewing the perfect cup of coffee with smart vaults and dual farms.

From ICOs and NFT Dual Reward Booster to the BREW Lottery and CafeSwap Games, there is a lot more that is happening in this extraordinary cafe.

Initial Cafe Offerings

CafeSwap uses Initial Cafe Offerings( ICOs) for launching new tokens. The main purpose of ICOs is to raise funds for new projects on the DeFi scene.

CafeSwap’s own MOCHA token was one of the most awaited ICOs on this platform.

Another favorite brew was the Pacoca IFO (Initial Farming Offering). It was a huge success and an amount of 1.5 million dollars was raised via the sale of ten million PACOCA tokens. Pacoca is a platform that helps in portfolio management. You can track your investments with this one-stop solution.

How to take part in ICO:

You need to add your BREW-BNB LP tokens, before the sale, to participate in an ICO. Once the sale is over, you can claim your tokens and the unspent funds, if any.

NFT Dual Reward Booster Staking

Dual rewards seem to be CafeSwap’s favorite trick to draw in investors. It sure works too.

So, how do they attract people towards their new token launches - the Initial Cafe Offerings?

How about getting your hands on a limited edition NFT for FREE?!

For every ICO launched on Cafeswap, a hundred limited edition Non Fungible tokens are released for that particular project. Since there are many contenders for this, a hundred participants are randomly selected.

 

The random selection happens via a whitelisting process, where some amount of $BREW tokens are locked and the locked $BREW will later be burned to acquire this limited edition NFT.

CafeSwap Referral Program

If you are convinced that this platform is the right place to be, then tell your buddies about it. Encourage them to try out this platform.

The referral program is quite simple. You copy the referral link and share it with your friends. The moment they invest and start earning. You are entitled to 1% of your friend’s earnings.

CafeSwap Brewery Partnerships

Though CafeSwap is the new kid on the block, it has taken great strides in the DeFi space. It has partnered with leading AMMs and yield aggregators on the Binance Smart Chain.

Beefy Finance is one of the big names in the BSC ecosystem. It is known for having top-quality projects. Interestingly, I haven’t heard of any project on Beefy finance to be rug pulled.

Be it for an Initial Cafe Offering, Initial Dex Offering, or a farming pool, anyone can partner with CafeSwap by filling a simple form.

 

CafeSwap Games

CafeSwap has partnered with TreasureKey, a leading blockchain-based betting platform, to offer you some fun games. If you love games of chance, then this one is perfect for you.

Brew Lottery/ BUSD Lottery

For participating, you evidently need to purchase a lottery ticket. One ticket will cost you one BREW token. If you are buying a lottery ticket using BUSD. Then one ticket will cost you 5 BUSD.

For purchasing a ticket, you will need BUSD or BREW. Users are allowed to buy as many tickets as they can afford. At a time, only 50 tickets can be bought. But you can buy them multiple times. The draw for the same will last for six hours.

The ticket gives you 4 different numbers from 1 to 14 in the BREW lottery and 1 to 7 in the BUSD lottery. Win the lottery jackpot by matching all 4 numbers on the tickets in the same position as the 4 winning numbers.

If not the jackpot, even if you match 2 numbers, you will be guaranteed a reward.

Before You Go…

Beginning with the center of focus on security with audits from reputed agencies like Certik and HashEx, CafeSwap is definitely right on the path. definitely has an extensive roadmap and it

Its innovations such as the Cafe Smart Vaults, Dual Farms, Brew Lottery, NFT Dual Reward Booster, etc. make it stand out from the rest of the farming protocols. 

The CafeSwap developers are brewing pots of coffee and keeping themselves awake day and night and working very hard. They have revamped their user Interface to make it more attractive and user-friendly. The project is bringing something new to the table every day.

So sit back, sip your coffee and reap the benefits. Happy Brewing!

Arian P