BurgerSwap Review

 

BurgerSwap is a decentralized exchange (DEX) that launched in the “DeFi Year” of 2020. The BurgerSwap platform is only possible to use if you connect your MetaMask Wallet to the platform.

BurgerSwap is a decentralized crypto exchange built on BSC (Binance Smart Chain). It allows users to swap and trade cryptocurrencies thanks to favorable conditions from the AMM market. This AMM will be backed by BurgerSwap’s liquidity pool, from which users can provide tokens in exchange for rewards from the platform.

The main aim of BurgerSwap is to solve the problems of most Ethereum-based transactions with gas fees, slippage, and transaction speed. On BurgerSwap, users can swap ERC20 tokens easily.

BurgerSwap is a decentralized exchange built on top of the BSC. It allows users to conduct cryptocurrency swaps which are facilitated by its AMM. The AMM is supported by its liquidity pool where users can supply tokens in exchange for platform rewards.

The main goal of the platform is to address the problem of most Ethereum-based exchanges with gas fees, price slippage, and slow transaction speeds. Through its ETH-BSC bridge, users can also easily swap their ERC-20 tokens on BurgerSwap.

Ultimately, the architecture of the platform is closely similar with projects from the same space, such as PancakeSwap, BakerySwap, and many others. BurgerSwap’s AMM model provides its users with incentives if they supply liquidity to the exchange.

 

 

When it comes to centralized exchanges, many of them charge what we call taker fees, from the takers, and what we call maker fees, from the makers. Takers are the people removing liquidity from the order book by accepting already placed orders, and makers are the ones placing those orders. The main alternative to this is to simply charge “flat” fees. Flat fees mean that the exchange charges the taker and the maker the same fee.

When it comes to decentralized exchanges, many of them don’t charge any trading fees at all. This is in fact one of the big arguments that DEX-supporters use to explain why centralized exchanges are on their way out.

To the best of our knowledge, BurgerSwap belongs to the group of DEXs that does not charge any trading fees.

 

To our understanding, BurgerSwap does – like most decentralized exchanges – not charge any transfer fees or withdrawal fees other than the network fees. The network fees are fees paid to the miners of the relevant crypto/blockchain, and not fees paid to the exchange itself. Network fees vary from day to day depending on the network pressure.

Generally speaking, to only have to pay the network fees should be considered as below global industry average when it comes to fee levels for crypto withdrawals (if you include all exchanges, both DEXs and CEXs in the data set).

 

Every trading platform has a trading view. The trading view is the part of the exchange’s website where you can see the price chart of a certain cryptocurrency and what its current price is. There are normally also buy and sell boxes, where you can place orders with respect to the relevant crypto, and, at most platforms, you will also be able to see the order history (i.e., previous transactions involving the relevant crypto). Everything in the same view on your desktop. There are of course also variations to what we have now described. This is the trading interface at BurgerSwap:

BurgerSwap Trading Interface

 

DEXs are becoming increasingly more popular, mostly due to the following factors:

  • They do not require a third party to store your funds, instead, you are always directly in control of your coins and you transact directly with whoever wants to buy or sell your coins.
  • They normally do not require you to give out personal info. This makes it possible to create an account and right away be able to start trading.
  • Their servers spread out across the globe leading to a lower risk of server downtime.
  • They are essentially immune to hacker attacks.

However, DEXs normally have an order book with lower liquidity than their centralized counterparts.

 

As for BurgerSwap, on the date of first writing this review (24 February 2021), the 24 hour trading volume was USD 251.7 million (according to information from coinmarketcap.com). On the date of last updating this review (12 September 2021), the trading volume had doubled to USD 511.5 million. This is a very impressive trading volume for a DEX.

 

Why do so many exchanges not allow US citizens to open accounts with them? The answer has only three letters. S, E and C (the Securities Exchange Commission). The reason the SEC is so scary is because the US does not allow foreign companies to solicit US investors, unless those foreign companies are also registered in the US (with the SEC). If foreign companies solicit US investors anyway, the SEC can sue them. There are many examples of when the SEC has sued crypto exchanges, one of which being when they sued EtherDelta for operating an unregistered exchange. Another example was when they sued Bitfinex and claimed that the stablecoin Tether (USDT) was misleading investors. It is very likely that more cases will follow.

Decentralized exchanges are different beings than the abovementioned examples. They never have custody of any user assets. They normally don’t accept any fiat currency. As such, they are less scary for regulating authorities and the same reasons to prohibit citizens from certain countries to use them can’t be applied. Accordingly, we have marked BurgerSwap as “allowing US-investors” in our database.

 

You can also use this platform to create crosschain assets, like ERC20 to BEP20 or vice versa. This is possible through the use of BurgerSwap’s Bridge-tool. It has the following interface:

BurgerSwap Crosschain Assets

 

BurgerSwap does not – like all (or at least close to all) other DEXs – accept any deposits of fiat currency. This means that crypto investors without any previous crypto holdings can’t trade at this trading platform. In order to purchase your first cryptos, you need a so called entry-level exchange, which is an exchange accepting deposits of fiat currency.

 

The servers of DEXs normally spread out across the globe. This is different from centralized exchanges that normally have their servers more concentrated. This spread-out of servers leads to a lower risk of server downtime and also means that DEXs are virtually immune to attacks. This is because if you take out one of the servers, it has little to no impact on the full network. However, if you manage to get into a server at a centralized exchange, you can do a lot more harm.

Also, if you make a trade at a DEX, the exchange itself never touches your assets. Accordingly, even if a hacker would somehow be able to hack the exchange (in spite of the above), the hacker can not access your assets. If you make a trade at a centralized exchange, however, you normally hold assets at that exchange. That is, until you withdraw them to your private wallet. A centralized exchange can therefore be hacked and your funds held at such exchange can be stolen. This is not the case with respect to decentralized exchanges, like BurgerSwap.

 

Setting Up BurgerSwap

It is fairly easy to set-up BurgerSwap. All you’ll need is an online wallet such as MetaMask, TrustWallet, MathWallet, TokenPocket, and Binance Chain Wallet. Once you already have one, you can just go to the website and link your wallet to begin trading.

You will need BURGER tokens on the platform in order to facilitate your transactions. To acquire them, you can purchase them straight away from cryptocurrency exchanges that list the token or by purchasing Binance Coin (BNB). If you already have BNB, you can transfer them to the wallet you linked on the platform and swap them with BURGER.

When trading on the platform, you will be given the option to adjust the slippage tolerance for your swap. This refers to the level of change in price you’re willing to tolerate as you conduct your swap. You can freely set it around 0.1%, 0.5%, or 1%. If you’ll be swapping other tokens too, you can follow these same considerations as well.

 

Liquidity Mining

As already mentioned, the BurgerSwap AMM is powered by a liquidity pool. This is a pool of cryptocurrency tokens from users of the exchange and is used in order to facilitate the trading and swapping of tokens on the platform. Users who supply assets on the pool are called liquidity providers (LP).

LPs are given rewards in proportion to the amount of assets they locked in the liquidity pools in the form of $BURGER tokens. In order to provide liquidity to the platform, a user needs $BNB since the blockchain requires it for the gas fees.

Furthermore, make sure that the tokens you want to supply to the pool are on the BEP-20 blockchain, which is Binance Smart Chain’s standard. You can swap your ERC-20 based assets into BEP-20 supported tokens using the platform’s cross-chain bridge.

There are already a lot of liquidity pools to choose from, but if you want to open a new liquidity pool, you can start a new one for a token pair of your choice. Remember, however, that you have to deposit both trading pairs on the pool. There is also a minimum percentage of token deposits you’ll need to consider in order to provide liquidity to a token and $BNB pair.

Remember, however, that only BNB and BURGER pairs can be used to mine BURGER tokens. Providing liquidity to other token pairs does not earn BURGER rewards.

 

$BURGER Token

$BURGER is the native, utility token of the platform. It can be used for transaction fees, trading, staking, and voting functions. There are many ways to earn BURGER tokens. Apart from supplying liquidity to the AMM’s pools, users can also decide to stake some supported tokens through Burger Shack.

 

Staking through Burger Shack

There are assets, apart from BURGER, that can be staked on the protocol’s smart contracts, such as BNB, BUSD, USDT, BTCB, MDX, HMDX, and ETH. In return, users earn both USDT and xBURGER.

All the assets deposited in the Burger Shack smart contract are distributed to yield pools that offer the best returns in order to ensure the highest rewards for stakers. The reward for their stake is also proportional to the amount of tokens they deposit. This is a preferable choice for those who do not want to carry the risk of impermanent loss.

 

Staking through xBurger Pool

There is also an option to deposit assets on the xBurger pool. This provides stakers with BURGER and xBURGER simultaneously. Here are the trading pairs which can be staked on the xBurger pool: xBURGER/BURGER, xBURGER/USDT, xBURGER/BNB.

 

Liquidity Farming

Liquidity providers get BLP tokens when they deposit assets to liquidity pools. The BLP tokens, in turn, can also be staked in Burger Farms. They can be unstaked anytime the user chooses to.

 

Lending

BurgerSwap allows users to lend their assets to other interested takers. What the protocol does is aggregates all the assets that are designated for lending, which other platform users can avail for a specific amount of interest. Then, all the interest collected from the loans given out through the pool is distributed to the contributors in proportion to the amount of their deposit.

 

Governance

Stakers of BURGER tokens compose the community that govern the direction of the protocol. This means that they have the ability to make and approve proposals related to the parameters of the platform, such as transaction fees and block rewards, among others. If the proposal a staker voted for gets passed, they will also receive incentives in return.

 

Conclusion

With the rise of many decentralized exchanges (DEXs) in the space, it is worth looking into their incentive structure to determine how they aim to get people to support their platform. It is not enough that they put in place liquidity pools or AMMs. There should also be multiple options for users to contribute their idle assets to the market for a definite amount of rewards.

BurgerSwap has a promising approach on that particular aspect. Using the platform’s native token, or any other supported cryptocurrency asset, they can earn more tokens in reward. Using advanced DeFi concepts such as liquidity mining and yield farming, users can also produce optimal gains from their holdings. With this reward structure, adoption is not a distant achievable goal for the project. And in turn, this complements the aim of the project to achieve better liquidity.

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