With all the benefits and options available, Dfinance has high chances to become one of the leading platforms in DeFi by 2021.
The crypto market was realizing the growth potential of decentralized finance (DeFi) back in late 2018. However, the WING team noticed a glaring reality – in the traditional finance market, many financial tools are created with financial experts who have little to no technical know-how.
Hence, the WING foundation decided to create a platform where these non-technical financial wizards can show their creativity with very little easy-to-do technical knowledge on the blockchain. And thus, Dfinance was born to bring unlocked value to DeFi.
The article will explore how Dfinance plans to realize the dream and the core technologies it employs.
To realize this potential, Dfinance entered a collaboration with Elrond Network – a high-performance public smart contract platform. The objective is to co-benefit through expanded utility and lowered usability barriers.
This will establish a two-way gateway between the two networks to facilitate easy asset transfers. The Dfinance users will create new types of products, including Elrond asset-collateralized products like the native $BUSD or $ERD stablecoins. On the other hand, this will enable Elrond users to access existing instruments and build their DeFi tools on the Dfinance platform.
This partnership will boost what Dfinance has set to achieve – total access to DeFi’s potential.
Tendermint offer the following benefits:
DFI- The native DFI coin is used for multiple utilities like staking, paying gas fee, governance, and to offer liquidity in the network.
XFI – The primary ticker coin (ERC-20) is used for transactions. It will be available once the mainnet launches and can only be acquired through WING token swaps.
Also, the transaction-as-script functionality enables users to do multiple operations within a single transaction written in Move language, thus offering flexibility.
The Dfinance network uses two types of smart contracts – module and script. The module type is issued into blockchain storage and filed under the publisher’s account. On the other hand, script smart contracts are simply a transaction-as-script and therefore can operate only with existing modules. These default modules, called Standard Move VM library, are used to develop new modules.
To achieve this easy value transfer across the chains, Dfinance employs the PegZone protocol. Dfinance plans to be interoperable with numerous layer-1 blockchains such as Ethereum, Bitcoin, EOS, etc. The present testnet version supports Ethereum blockchain only and thus offers any other ERC20 tokens, including ETH compatibility.
PegZone allows you to lock these ERC20 tokens in a smart contract called Bridge in the Ethereum blockchain, which is managed by the approved validators list. Once deposited, they release a proportionate amount on the given address in the Dfinance network. This feature enables the approvers to levy a 0.1% fee of every transaction for cross-chain value transfer only when coins are deposited.
Subsequent upgrade and mainnet launch will make it more efficient and add further chain supports.
As of now, Binance is the only platform it fetches price from, supporting ETH-USDT and BTC-USDT pairs. Dfinance plans to supplement more exchanges and ticker pairs.
The node validators get selected based on the amount of stake they hold. Also, users can delegate their stake to preferred node validators by locking these DFI coins in smart contracts. When the validators earn rewards, the stakers also gain from them as per their stake size – higher stake drawing higher rewards.
On the flip side, Dfinance has a slashing mechanism to discourage undesired activities in the network. The punishment strategy it employs are as follows:
