Beta Finance is the permissionless money market for borrowing, lending, and shorting crypto assets. This means that anyone at any time is able to create a money market for any crypto asset.
Also, check out our Beta Finance Token Price Prediction.
👨🌾 Lenders
Lenders are able to now earn risk-free yield (as high as 1000+%) on not only popular assets but also the long tail of crypto assets, including yield farmed tokens, that exist today! Easily deposit your tokens on Beta into the token’s money market, or create it yourself if it’s not there yet.
🤝 Borrowers
Borrowers are able to borrow crypto assets by supplying ETH and/or Stablecoin as collateral. This gives users flexibility when interacting with other protocols that require using assets they currently do not have without losing their current positions.
📈 Traders
Traders are able to short sell any crypto asset by using their ETH and/or Stablecoin as collateral. Beta provides an integrated “1-Click” Short that makes initiating and managing short positions simple.
🧨 Liquidators
Liquidators are able to earn a premium bounty reward for monitoring and liquidating under-collateralized positions
Beta Finance Review
Beta Finance is a protocol that enables Defi users to have access to a scalable and accessible money market where tokens can be listed permissionless and automatically, as well as to an effective, easy-to-use short selling tool.
They encourage users to interact with our protocol and leverage new Defi strategies that are now possible with an accessible on-chain short-selling solution and permissionless listing.
Beta Finance will initially be live on Ethereum Mainnet with plans to scale to additional layer-1 and layer-2 solutions shortly after.
To interact with the Beta Finance protocol you will need a MetaMask, Coinbase, WalletConnect, or Fortmatic wallet that is connected to Ethereum Mainnet. Please search for these wallets to understand how to install and use them.
To enable the support of more volatile assets, Beta Finance has an isolated collateral model, meaning there is no cross-collateralization.
For example, given 10 ETH were used as collateral, with 5 ETH allocated to borrowing $ALPHA, and 5 ETH allocated to short selling $SHIBA.
If $SHIBA spikes in price, and you’re at risk of liquidation, only the 5 ETH allocated to your $SHIBA position is at risk of liquidation.
The other 5 ETH associated with your ALPHA position is safe and will not be liquidated. You can reference our Risk Framework section for more information.
Initially, Beta Finance will be supporting ETH, USDC, USDT, and DAI as valid collateral, with the availability for our community to propose and vote for additional collateral support once Phase 2 is launched.
Short Selling
Beta Finance encourages users to spend time understanding how short selling works before starting to use this feature on Beta Finance. In general, short selling on Beta Finance is similar to short selling on centralized exchanges with the main caveats:
- Beta Finance does not use an order book to execute the short sell, instead we route the trade through decentralized exchanges that use AMM technology.
- Beta Finance does not use funding rates, borrow and short positions repay the accrued interest in a similar fashion to existing money markets like Compound and Aave.
Trading can result in financially limited up to the amount of your initial investment.
Remember to do your own research to understand tokens, market conditions, and other technologies you will be using.
Permissionless Money Markets
This feature will be enabled in Phase 2 of our launch. Initially, users will be able to interact with Beta Verified Markets, which are money markets that the team has analyzed and evaluated to be safer for users to interact with.
Refilling and Repaying in Beta Finance
Refilling
Refilling on Beta Finance means adding additional collateral to a current borrow or short position. Users are able to add more of the existing collateral used to the position in order to decrease the loan-to-value (LTV) percentage to avoid liquidation.
To add additional collateral to an existing position follow 2 simple steps:
- Select the position you want to add more collateral to and click “Refill”.
2. Enter the amount of collateral you would like to add and click “Refill”. Metrics regarding the change in LTV after the added collateral are available directly in the UI.
Repaying
Unlike on existing money markets, where users need to use the underlying asset to repay their debts.
Beta Finance will enable users to either repay their debt using the collateral or borrowed/shorted token.
When repaying with the borrowed/shorted token, users will need to specify the amount of borrowed/shorted token to repay.
When repaying with the collateral asset, Beta will automatically deduct the full debt from the collateral and execute a swap on a DEX to obtain the borrowed/shorted asset for repayment on behalf of the user.
For repaying with borrowed/shorted token:
- Select to pay with the borrowed/shorted token and enter the repay amount. The debt does not have to be fully repaid when directly paying with the borrowed/shorted token.
2. Click the buttons to approve the token for repayment and repay the debt.
Fore repaying with collateral:
- Select “Pay with Collateral” on the right side. When repaying with collateral, Beta Finance will automatically use the collateral associated with the position to swap to the borrowed/shorted token through the optimal DEX to repay your debt.
2. Click the button to repay your debt, close your position and retake your collateral.
Why they built Beta Finance
Shorting is a counterbalancing force to price volatility and a critical piece of financial infrastructure missing in Defi.
Rather than allow volatility to persist as the norm and depend on liquidation cascades for price corrections, they wanted to enable Defi users to have the ability to act as an opposing force to price volatility by providing a simple and seamless experience to short assets.
Additionally, currently,>99% of actively traded crypto assets are neglected by popular money market protocols, leaving these token holders with few or no options to earn an additional yield on their tokens.
As Defi grows larger and larger, we wanted a money market protocol that could scale with it, where users were able to create money markets immediately.
Project mission and vision
Their mission is to offset the volatility in Defi today by developing critical infrastructure and user tooling to facilitate market efficiency.
They stand by the Defi ethos of “Open Finance For All” and seek to re-define finance by providing a foundational block in Defi that future projects will be built upon.
Risk Parameters
Beta Finance uses a scalable asset tier model to determine the risk configuration of assets.
This means that instead of individually determining the safety loan-to-value (LTV), liquidation LTV, and liquidation bonus tokens are assigned a tier from S, AA, A, BB, B, and C, and all tokens in that tier share the same risk configuration.
Asset Tiers
| Tier | Safety LTV | Liquidation LTV | Liquidation Bonus |
| S | 75% | 80% | 2.50% |
| AA | 72.5% | 75% | 5% |
| A | 67.5% | 70% | 5% |
| BB | 55% | 60% | 5% |
| B | 50% | 57.5% | 7.50% |
| C | 20% | 30% | 25% |
Tokens by Asset Tier
| Name | Token | Asset Tier |
| USDC | USDC | S |
| Tether | USDT | S |
| DAI | DAI | S |
| Ethereum | ETH | AA |
| Wrapped BTC | WBTC | AA |
| Uniswap | UNI | A |
| Sushiswap | SUSHI | BB |
| Alpha Finance | ALPHA | BB |
| Polygon | MATIC | BB |
| Band Protocol | BAND | BB |
| Chainlink | LINK | A |
| Balancer | BAL | A |
| Bancor Network | BNT | A |
| Synthetix | SNX | A |
| yearn.finance | YFI | BB |
| C.R.E.A.M. Finance | CREAM | B |
| Feisty Doge NFT | NFD | C |
Collateral factors determine the borrowing limit of an account. Established and highly liquid assets will have higher collateral factors, while more illiquid assets will have lower collateral factors.
To determine the maximum amount that can be borrowed, users should multiply the Collateral Factor by the safety LTV threshold to determine the maximum position that will be safe from liquidation.
These collateral factors, as well as the supported collaterals, can be updated by community proposal.
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