The traditional finance has failed and still failing many people due to many reasons that include; Compound cost due to activities of middle men, slow transactions, delay in cross border transactions and inaccessibility of financial institutions to majority of rural dwellers. In my State in Nigeria, aside the State capital, you can only see banking institutions in three other communities. To this end, people are beginning to embrace Cryptocurrencies and are seeking more ways to profit from it aside trading it.
DeFi seeks to enable fiat like investments in Cryptocurrencies. Capital, either fiat or crypto should provide returns on investments. Today, people seeks the possibility to lend, invest, borrow and receive interest on investments. DeFi platform is bringing this much needed innovation into crypto space.
Most of the DeFi projects are on Ethereum network and it's believed this network host other dApps that can negatively affect the execution speed of DeFi on the network. Example was when Cryptokitties almost grounded Ethereum network completely due to size of the dApp. This is one reason is believed that for a serious financial dApp, it is important to host it in a network solely dedicated to Decentralised Finance to avoid network clogging.
DeFiChain
The DeFi foundation is developing DeFiChain, a blockchain solely dedicated to decentralized financial applications and built on Bitcoin chain. Focusing on the functionalities of the blockchain, and dedicating it solely to DeFi, DeFiChain provides unparallel high transaction throughput, reduced risk of errors and intelligent feature development specifically for the fulfillment of financial services on the blockchain. To this end, DeFiChain fork of Bitcoin chain will include the following improvements; block time of 30 seconds and a block size of 16MB.
DeFiChain claimed it's mission is to give people seamless access to DeFi services. It also pride itself in the fact it's not a general purpose blockchain but one solely dedicated to DeFi. DeFiChain is optimized specifically for DeFi applications and it was designed intentionally to be non-turing-complete and does not support any function, other than those needed for DeFi so that the blockchain can provide higher throughput and better functionality specifically for finance related dApps. Non-Turing-Complete command set helps minimize the potentials of coding errors as seen on Ethereum Smart Contract (DAO and Parity locked fund hack) so much so smart contracts auditing is becoming a big industry around Ethereum Smart Contracts.
The function sets of DeFiChain include: Decentralized lending, Decentralized wrapping of tokens, Decentralized pricing oracles, Decentralized Exchange, Transferable debts and receivables, Decentralized non-collateralized debt, asset tokenization and distribution of dividends amongst others.
Building a DeFi blockchain on top of Bitcoin chain will bring the best out of both based on Bitcoin chain stability and immutability as well as DeFiChain scalability and functionality. To this end, the most recent Merkle tree from DeFiChain will be saved to the Bitcoin blockchain. Overtime, DeFiChain intends to space out the anchor at larger intervals to ensure provably immutable records while still keeping DeFiChain consensus mechanism and function sets not available on the bitcoin network.
Tokenomics
The total supply of $DFI tokens is 1.2 billion. The DeFi foundation promised the token will not exceed this amount as the DFI token is deflationary. 49% of the total supply will be issued to the DeFi Foundation at the start with the rest issued to Masternodes holders over time. If this 49% initially issued,49% of it will be kept by DeFi Foundation. This simply means the 49% of 1.2 billion tokens. Which is about 588 million token will be held by the Foundation. Of this 588 million, 49% of it will be held by the Foundation and 51% distributed to the public.
There will be no public sale of DFI tokens but tokens can be gotten from;
• Staking platforms;
• Airdrops to users of DeFiChain; and
• DeFi Foundation grant to developers willing to develop dApps on DeFiChain.
DeFiChain is available on Kucoin, Bittrex, and Latoken.
Excellent explanations about the important of defi in the crypto space. Good thing is that humans now has an escape route from the present financial oligarchy in our society today.