Understanding beltTokens (beltBTC, beltETH, beltBNB, beltHT, beltSKLAY)
beltTokens are the foundation of Belt Finance, available on every chain. Compounding and yield optimizing in multi-strategy vaults
Example of beltBUSD split between different strategies
beltTokens refer to the belt tokens (beltBTC, beltETH, beltBNB, etc.) you receive upon depositing into a Belt Finance vault. beltTokens are in essence a deposit receipt. They represent liquidity provided in a Belt depositor contract. beltTokens are compounding vault tokens.
For example, if you deposit BTCB in Belt BTC Vault (Belt Depositor contract) you will receive beltBTC in return.
All beltToken vaults have multi-strategy yield applied to them. This idea behind this can be seen in the image above. Every token deposit into Belt Finance is not depositing wholly in a single strategy. Deposits are split between our different strategy protocols to optimize yield and security by spreading risk across the different protocols. Deposits are operated through the “Keepers” decided ratio, which you can see in the architecture.
When the depositor contract you are providing liquidity to generates yield, your beltTokens will increase in value, since they represent a share of that vault. This is why you will observe an increase in price. The base APR from the multi-strategy yield is automatically added and compounded every six hours to the value of the beltToken. This is separate from any BELT rewards.
Basically, each beltToken represents the underlying token + the yield from our multi-strategy yield thus far (e.g. beltBNB = BNB + base multi-strategy yield).
beltTokens are in standard format meaning they can be transferred and traded as any other BSC/HECO Chain/Klaytn token (as of now we recommend that this takes places only through Belt Finance as other methods may be susceptible to scams). When you withdraw liquidity from the Belt Finance pools/vaults, your beltToken will be burned.
The beltToken automatically balances your stablecoin to the protocol(s) with better rates if there are any. This process is free and non-custodial.
Vaults are capital pools that automatically generate yield based on opportunities present in the market. Vaults benefit users by spreading gas costs, automating the yield generation and rebalancing processes, and automatically shifting capital as opportunities arise. End users also do not need to have proficient knowledge of DeFi or the underlying protocols involved, thus, Vaults represent a passive-investing strategy.
A main function of Belt.fi is being a lending aggregator. Funds are automatically shifted between strategy protocols as interest rates change between these protocols. Belt.fi completely optimizes the interest accrual process for end-users to ensure they are always obtaining the highest interest rates among our connected platforms. Earns from each beltStrategy contract are automatically added and compounded to your deposit every 6 hours.
- example transaction
As written above, beltTokens represent the value of the underlying token (i.e. BTCB for beltBTC) + the yield from our multi-strategy yield thus far.
As more yield gets applied with the passing of more time and with more strategy protocols giving higher yield, the value of the beltTokens will continuously increase as this yield is autocompounded every 6 hours.
You can check the contract data of a beltToken (the underlying token swap ratio) through BSCSCAN Links and the parameter named “getPricePerFullShare()”
TLDR: 1 beltToken > 1 underlying token’s value. (e.g. 1 beltBTC > 1 BTCB)
For example, If you deposit 1 BTCB in this single BTCB vault. You would get about 0.9865 beltBTC, excluding the potential deposit fee of the target strategy.
All Belt Finance vaults/pools (except for the venus pool) have multi-strategy yield applied to them.
The basic idea of what multi-strategy yield optimization can be seen with yearn.finance. yearn has a strategy of deciding and rebalancing their TVL between Compound, AAVE, and other lending protocols.
This kind of multi-strategy would be terrible for us.
If we chose one protocol with the best APY and put all our TVL in that protocol, the APY would plummet and become the worst rate in BSC… This is because our TVL is very high and BSC doesn’t have huge lending protocols in comparison to Ethereum.
For this reason, we created multi-strategy beltTokens and not depositing the whole of the assets they represent in a single strategy. Deposits are operated through the “Keepers” decided ratio, which you can see in the architecture.
We aim to have decoupling between each layer so that we can define standard interfaces, and so that each layer works separately if needed. For the multi-strategy yield, we will find the best protocols and ratios, and this will make Belt.fi an infinitely more scalable protocol.
Don’t be concerned that we manage ratios between strategies (setRatio). Belt.fi is a non-custodial protocol so that no one can touch your assets. And also we can’t haphazardly add or remove strategy protocols.