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DeFiChain is the world’s biggest DeFi blockchain in the Bitcoin ecosystem, with over $200 million in total value locked (TVL). It is dedicated to bringing fast, secure, and transparent decentralized financial services to everyone. DeFiChain relies on Bitcoin’s principles and mechanisms for security. This fully decentralized Proof of Stake blockchain has been live on mainnet since 2020.
DeFiChain gives users access to a wide variety of decentralized financial tools and makes real world assets like stocks, commodities and ETFs tradeable in a decentralized manner. Before we dive deeper, let’s first understand DeFi.
What’s Decentralized Finance (DeFi)?
DeFi is a blockchain-based financial system that offers the same services as traditional finance, but without relying on centralized intermediaries such as brokerages, exchanges, or banks. They are slow, expensive, and require you to blindly trust them. They could freeze your money, block your account, deny access to specific asset classes or levy ambiguous fees. DeFi gives you freedom from all that.
Advanced DeFi applications
DeFiChain’s goal is to bring advanced DeFi applications and services to everyone. It offers liquidity mining, staking, decentralized assets, and decentralized loans to users worldwide. DeFiChain allows users to mint and trade dTokens to get price exposure to stocks and ETFs without leaving the DeFi ecosystem.
DeFiChain has been alert about the environmental crisis since its inception. This is why despite being a hard fork of Bitcoin (which uses the energy-intensive Proof of Work consensus), DeFiChain is built with the Proof-of-Stake (PoS) consensus mechanism, which utilizes minimal energy. This way, it does not subject the environment to much damage while retaining Bitcoin’s security.
Security plays an incredibly important role in finance. Nobody wants to lose their capital when investing. DeFiChain offers cutting-edge security by relying on non-turing completeness – just like Bitcoin. That’s as secure as a DeFi ecosystem can get. On DeFiChain, the dApps are protected by the native blockchain consensus, programming commands are greatly simplified, and decisions are made through DeFiChain’s DAO which is represented through its masternodes.
Everything you can do with DeFiChain
DeFiChain offers you the chance to set up a diversified investment portfolio in the palm of your hand, combined with the flexibility and benefits of decentralization. The blockchain offers Liquidity Mining, Staking, decentralized stocks and decentralized loans. You can buy dTokens that mimic the prices of real-world stocks and ETFs like dTSLA or dAAPL. DeFiChain even supports future & option contracts, fully decentralized!
A diversified portfolio consists of stocks, commodities and other things to make it crisis-proof. That’s a lot for the average investor to take care of. You need multiple brokers to get everything sorted.
With DeFiChain, you can do all of that in one app. How? DeFiChain’s decentralized assets can replicate almost every asset class and the amount of available dTokens is constantly increasing. If you are an experienced trader, you can create short- and long positions to benefit from price movements on either side.
On DeFiChain you can invest in not only dTokens but also in other cryptocurrencies like Bitcoin, Ethereum or Litecoin. On top of that, you can make them work for you. How? By doing staking and liquidity mining! On DeFiChain, staking and liquidity mining is just a click away.
It gets even better: DeFiChain isn’t bound to any regional constraints and requires no minimum investment. You can invest from wherever you’d like and how much you’d want.
What if you want to keep your cryptocurrencies but also need money for investment? DeFiChain’s loan feature offers you exactly that. You can become your own lender and take out a loan based on the assets you have on-chain. With DeFiChain you are not just HODLing your assets; you go beyond HODLing… and the best thing is you can do all of that in the palm of your hand.
DeFi Meta Chain (DMC)
To prepare for a truly multi-chain and interoperable future, DeFiChain has developed the DeFi Meta Chain, an EVM compatible blockchain in parallel with the native chain. It will not only make DeFiChain EVM compatible but also offer “full Web3 compatibility,” allowing developers to build dApps that retain the unmatched security of Bitcoin while tapping into the massive user base and assets of Ethereum and other ecosystems. The best of both worlds!
DMC is Turing-complete and fully EVM compatible whilst giving developers full access to the native DeFiChain. Building dApps, Smart Contracts, etc. is now possible without limitations.
How to trade cryptocurrencies and decentralized assets on DeFiChain
DeFiChain runs everything on its own exchange, the so-called “DEX”, which stands for decentralized exchange. To get access to the DeFiChain DEX, you need to download the official DeFiChain Light Wallet from the store (iOS and Android) and buy the chain’s native token DFI, which is listed on leading exchanges including KuCoin, Bybit, Huobi, Gate.io, DFX, CakeDeFi, Bittrex, Bitget, BitMart, and Bitrue. European residents can use the simple on-ramp of DFX to buy DFI with their bank account.
DeFiChain runs everything on its own exchange, the so-called “DEX”, which stands for decentralized exchange. It replaces the middleman – which is used on traditional centralized exchanges. A classic example is the DFI-BTC pool on DeFiChain. If you want to buy BTC with your DFI, you put DFI into the pool and take BTC out – and vice versa.
The DFI token opens up the world to the DeFiChain ecosystem. It is at the core of all activities on the DeFiChain blockchain including:
- Providing liquidity in multiple pools
- Staking for blockchain consensus and security
- As collateral to mint or borrow stock tokens (dAssets)
- As a reward token
- As the governance token of DeFiChain
Trade crypto and dAssets
Once you have DFI or other cryptocurrencies in your DeFiChain Wallet, you can start exploring DeFiChain’s powerful decentralized exchange. It supports a wide variety of cryptocurrencies including BTC, ETH, LTC, BCH, Dogecoin, USDT, and USDC. DeFiChain also offers decentralized assets, including stock tokens and commodities.
Within the wallet, you can then buy Assets like e.g. dTSLA token and can either go long or put them in a liquidity pool to earn rewards. This also works with other cryptocurrencies like e.g. dBTC, dLTC, dETH, etc., which are always paired with DFI.
You can build a diversified portfolio on DeFiChain by getting price exposure to not just crypto but also stocks, ETFs, and commodities. So, rebalancing your portfolio is way simpler on DeFiChain compared to using multiple services like brokers and centralized exchanges. A list of all the available tokens can be found here.
Download the official DeFiChain Light-Wallet from the store (iOS and Android).
How to make the most out of your assets on DeFiChain
DeFiChain often uses the slogan “Go beyond HODLing.” HODLing is great as it allows you to take a long-term view of your assets. But why let your investment just lay around without any usage when you can make them work to earn additional rewards for you – all with the security and convenience of the DeFiChain wallet?
On DeFiChain, there are two main ways to let your investments work for you – Liquidity mining and Staking.
With liquidity mining, you lend your assets to the decentralized exchange (DEX) and receive DFI & commission fees in return. You help to build up a “trading”-pool like dTSLA/DUSD and provide liquidity so others can swap their dTSLA for DUSD or vice versa.
Liquidity mining is needed on any DEX to build up huge liquidity pools and enable decentralized trading. Liquidity Mining can be done with cryptocurrencies or dTokens. There are over five dozen liquidity pools available on the DeFiChain DEX. While the cryptocurrencies are paired with DFI, the dAssets trade with DUSD as a pair.
In a Proof-of-Stake blockchain, you stake the native token to process transactions and keep the blockchain secure. Token holders are incentivized to help support the network. By staking your crypto, you earn rewards without having to sell them.
There are two ways to stake your DFI tokens: the decentralized or via a third-party staking service provider. You can stake in a fully decentralized way by creating a masternode with 20,000 DFI. If you don’t know how to run a masternode or don’t want to deal with the technical hussle behind it, you can stake your DFI tokens on CakeDeFi or DFX.
How to create tokenized real-world assets on DeFiChain
Decentralized assets are one of the most innovative and revolutionary products of DeFiChain. With dAssets, it is possible to mimic almost any real-world asset and make it tradable in a decentralized way. The dAssets are intrinsically censorship-resistant, meaning no one can take them away from you or deny you access to them. This allows people without access to the financial world to get price exposure, while those who already have access can break free from their brokers’ limitations.
Decentralized assets are nothing else than utility tokens and can be minted by anyone on the DeFiChain blockchain. In conventional stocks, shareholders are part-owners in a company. You have certain rights such as the ability to vote on key proposals, receive dividends, and more.
But decentralized assets are not “securities” issued by a company. They are tokens on the blockchain that give you price exposure, not ownership of the actual asset, without leaving the DeFi ecosystem.
Rather than tracking and reflecting the actual stock price, the dAssets track and reflect a number of variable factors to closely follow the stock price, and use oracles to capture those feeds.
A dAsset can either be:
- held as an investment
- traded on the DeFiChain DEX
- used for Liquidity Mining on the DeFiChain DEX
The dAssets can be traded 24/7 and there is no need to buy an entire stock. If it is too expensive, users can buy a fractional piece of it. The dAssets also come with certain tax benefits (depending on your local tax rules) since they are seen as utility tokens, not securities.
Role of loans in minting dAssets
Before you trade those assets, you must create them first. To better understand this process, we have to first look at decentralized loans (dLoans), a feature that allows the user to borrow cryptocurrencies without a central provider.
To mint dAssets, you have to deposit dBTC, DFI, DUSD, dUSDT or dUSDC as collateral in the DeFiChain Vault. Nothing different than using your real estate as collateral for a loan at your local bank. At the same time, dLoans are the technical foundation of DeFiChain’s decentralized assets! All the dAssets get created through dLoans and are therefore backed by cryptocurrencies.
Minting is not the only way to own dAssets, though. Users can also buy them on the DeFiChain DEX and then put them towards liquidity mining for additional passive income. All dTokens are freely denumerable and can be transferred to other people worldwide without involving an intermediary.
You’ve learned everything about dAssets and the minting process on DeFiChain. You’re ready to explore DeFiChain! In case you have further questions, our great community (Twitter | Telegram) is here to help.