What is moonbeam?
Moonbeam is a blockchain platform that aims to create a seamless bridge between diverse decentralized finance (DeFi) ecosystems. Moonbeam is based on the Polkadot network and is fully compatible with the Ethereum Virtual Machine (EVM). Moonbeam allows developers to build and deploy decentralized applications (dApps) in a way that is interoperable with other blockchains. Its design allows it to support a wide range of use cases including stablecoins, lending and borrowing, and tokenization.
Story
Moonbeam was founded in 2020 by the team at PureStake, a company providing infrastructure services for blockchain networks. Its native token is Glimmer (GLMR), which is used for governance and transaction fees on the Moonbeam network. Introduced with the aim of making it easier for developers to create dApps that are interoperable with other blockchains, Moonbeam was designed to be fully compatible with the Ethereum Virtual Machine (EVM). Moonbeam features a unique tokenomics model that uses a staking mechanism to incentivize participation and provide security for the network. Validators on the network can stake GLMR tokens to participate in block production and are rewarded with transaction fees and newly minted GLMR tokens.
Moonbeam’s technology
Moonbeam is built on the Polkadot network, which uses a unique consensus mechanism called nominated Proof-of-Stake (NPoS). This consensus mechanism is designed to enable fast and secure transaction processing while allowing for a high degree of scalability.
Simply put, validators are elected by token holders to produce blocks and secure the network, and they are encouraged to act honestly through a system of rewards and penalties.
In addition to the Polkadot network, Moonbeam uses a technology stack that includes the Substrate framework, which provides a modular architecture for building blockchain applications, and the Parity Ethereum client, which enables EVM compatibility.
Designed to be developer-friendly and flexible, Moonbeam’s technology stack makes it easy for developers to build and deploy dApps on the platform.
Polkadot interoperability
The integration of Moonbeam into the Polkadot ecosystem brings several benefits that enable interoperability with other blockchains. First, Polkadot’s Cross-Chain Messaging Protocol (XCMP) is ready to allow Moonbeam to communicate with other parachains on the Polkadot network and share assets and data. This means that Moonbeam can easily interact with other blockchains that are also connected to Polkadot.
Additionally, as part of the Polkadot ecosystem, Polkadot’s shared security model allows Moonbeam to benefit from the security provided by the Polkadot network, which is one of the most secure and scalable blockchain networks in the industry. This means that Moonbeam can offer its users a high level of security without relying on its own security infrastructure. Finally, as part of the Polkadot ecosystem, Moonbeam can leverage the network effects and community of developers and users already built on top of Polkadot.
Ethereum Interoperability
The Ethereum Virtual Machine (EVM) is a software environment implemented as part of the Ethereum blockchain and running smart contract code. It acts as a runtime environment for smart contracts in Ethereum, allowing them to run on any network node and ensuring the consistency of the state of the blockchain.
Since the Moonbeam chain is compatible with the Ethereum Virtual Machine (EVM), this means that DApps on Moonbeam can be easily interacted with an EVM-compatible wallet such as Metamask. It also means that Ethereum and EVM chain developers can quickly port their DApps to Moonbeam with minimal modifications.
The GLMR token
GLMR is the native utility token of the Moonbeam Network, a smart contract platform that aims to provide Ethereum-compatible functionality for developers building decentralized applications. GLMR is used to pay for transaction fees, as well as for staking and network management.
The supply of GLMR is unlimited, there are currently about 576,345,576 in circulation. Despite the seemingly inflationary tokenomics, GLMR has a “burn” mechanism that increases the level of deflation in proportion to the gas fees paid per transaction. Every time GLMR is used to pay for smart contract transaction fees, 80% of those specific tokens are destroyed by “burning”.
The token was initially distributed through a private and public sale, with a portion reserved for ecosystem growth and development.
As of February 2023, according to CoinMarketCap, the token is currently valued at $0.43 with a market cap of approximately $245 million with a fully diluted market cap of over $442 million.
Moonbeam Ecosystem
There are about 40 apps in the Moonbeam ecosystem, including some well-known ones like Moonwell Artemis and StellaSwap.
Total Value Locked (TVL) is currently over $87.34M as of February 14, 2023, with native credit protocol Moonwell Artemis accounting for over 50% of the TVL share on Moonbeam.
Moonwell Artemis
Moonwell Artemis is the largest lending and lending protocol on Moonbeam, analogous to DApps like Aave or Compound on Ethereum. It is part of the broader Moonwell project, which includes an open lending, borrowing and decentralized finance protocol built not only on Moonbeam but also on Moonriver.
StellaSwap
StellaSwap is the largest decentralized exchange (DEX) on Moonbeam. It has an integrated platform that allows users to perform a range of actions such as swapping, yield farming, earning, asset bridging, exploring new projects, and NFT trading. StellaSwap offerings are designed to enable decentralized governance for native $STELLA token holders.
TrustWallet
Trust Wallet is a popular cryptocurrency mobile wallet that allows users to securely store, manage and exchange a wide range of digital assets. Powered by Binance, one of the largest cryptocurrency exchanges, Trust Wallet is designed to provide users with a simple and intuitive interface. The wallet supports a large number of cryptocurrencies and offers custom EVM network support, therefore including support for Moonbeam.
MathWallet
Another popular wallet is MathWallet. MathWallet is a mobile app-based wallet that supports all EVM-compatible chains, making this a good option if you’re yield farming across multiple Ethereum-based chains. Likewise, MathWallet fully supports interactions with the Moonbeam chain.
MathWallet offers mobile apps for iOS and Android and also has a browser extension option if you prefer to manage your positions on desktop.
MetaMask
Metamask needs no introduction: it is a popular browser extension and mobile wallet that allows users to interact with decentralized applications (dApps) based on the Ethereum network and EVM-compatible chains. The extension integrates with most dApps, providing users with a seamless, secure, and convenient way to access and consume decentralized services.
Since Moonbeam is compatible with EVM, you can also use MetaMask to interact with DApps on Moonbeam.
Staking on Moonbeam
You can delegate your Moonbeam tokens to collators for staking rewards. The following steps can be taken to stake your Moonbeam GLMR tokens.
- Connect your account to the Moonbeam dApp and accept the permissions.
- Migrate your MetaMask network to Moonbeam. The dApp will prompt you to do this.
- Change the network to Moonbeam and go to the main dashboard to view account details.
- Delegate a Collator candidate by clicking delegate. You will then be taken to the staking page.
5. Then choose the number of tokens you want to wager.
6. Collators share rewards received from block production among all their delegators.
7. Your reward is based on the amount you contributed versus the total amount tied to the collator.
8. For more information on reward distribution, see the Moonbeam staking reward distribution documentation.
Yield farming on Moonbeam
The ecosystem for Moonbeam is still relatively young. Nonetheless, you can farm on Moonbeam with StellaSwap, Moonbeam’s DEX with the highest TVL, along with Moonwell Artemis, the largest loan protocol on Moonbeam. In this first part, we will use StellaSwap as an example to discuss how to yield farms on Moonbeam. From mid-February 2023, the top companies will pay out the following income:
The process of trading and adding liquidity is mostly similar to that on Ethereum-based DEXs. So if you’re already familiar with yield farming on EVM-compatible ecosystems, you’ll feel right at home.
- In order to use Moonbeam, you must first buy some $GLMR tokens. This can easily be done on a number of centralized exchanges such as Kucoin. Withdraw the tokens directly to your MetaMask address.
2. Next, navigate to the StellaSwap interface and connect your metamask.
Follow the automatic prompt to switch the network to Moonbeam. Then go to the Swap page.
3. Exchange half of your GLMR tokens for the other coin you want to farm with. For example USDC.
Then go to the Pools page by clicking Earn and selecting Pool.
4. Select tokens for which you want to add liquidity. In this case we chose GLMR and USDC:
5. Click Add Liquidity. Once the transaction is complete, go to the Farms tab and scroll to the GLMR/USDC farm. Click through and you should now be able to deposit your LP tokens and start earning rewards!
If you prefer to lend your tokens for a return, you always have the option of Moonwell Artemis. The process is much simpler than StellaSwap. All you have to do is the following:
- Go to Moonwell Artemis and connect your MetaMask to ensure the Moonbeam network is selected.
2. Next, you should be able to select a token, which you can either deliver or borrow from the carousel interface above.
3. In the last step, simply enter the token of your choice – in this case GLMR – in the bottom left corner of the page above. Once you deposit your tokens, you will receive the Supply APY.
Should You Use Moonbeam?
Moonbeam is a powerful platform that brings the full capabilities of the Ethereum ecosystem to the Polkadot network, enabling seamless cross-chain functionality. The Moonbeam network is therefore well positioned as one of the first in the Polkadot ecosystem to promote blockchain interoperability with Ethereum-based DApps. In addition, users could greatly benefit from relatively high yields on various DApps.
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