Being Prepared for DeFi: The Protocol Container Defiking Hits the Target by One Shot
DeFi is blooming.
From the strong rise of Compound to YFI’s ten-thousand-fold increase, then to the collapse of YAM’s stock; from Justswap and MoonSwap to FlashSwap and AirSwap, then to the endless variety of “swap”.
One side is not over yet, the other has already started eagerly.
However, on the other side, the Ethereum network is increasingly congested and sluggish. It ended up in the high cognitive threshold for ordinary users, the withdrawal of small capital entities, and the full withdrawal of developers after the defeat.
How to attract more users outside the industry into the DeFi field?
How to establish a mass-traffic entry for the industry？
How to empower developers to build DeFi applications more conveniently?
In late September, the series of impressive operations on the decentralized trading platform — — dTrade — — was shocking. For example, the creation of liquidity and dual-circulation mining with perpetual motion machines, parallel deflation mechanism, no pre-mining, no team reservations, etc. These operations promote the comprehensive development of DeFi, which has made the market much more promising.
Before revealing the underlying technical infrastructure behind dTrade and analyzing how dTrade eliminates a lot of “swap” symptoms, we need to push the timeline forward by one month.
01
DeFi — Be Ready and Unstoppable
At this time, the “Defiking White Paper” made a stunning appearance with the intention of allowing ordinary users to share this DeFi feast at a low threshold.
Millions of users of DFK (Defiking platform currency) informed each other in the community, setting off a carnival feast.
Defiking initiated by the community is a DeFi technology protocol container that supports cross-chain. It consists of multiple protocols that can provide different DeFi capabilities, including five core protocol modules. They are dTrade, dOracle, dComposite, dPrivacy and dMatrix. Defiking initiated by the community covers cross-chain, oracle machine, decentralized synthetic asset issuance, privacy protection, decentralized mortgage stable currency savings/lending and other application areas, which open the DeFi standard modules and protocols provided by the Defiking platform to all ecological applications and provide integrated open interfaces for different platforms to realize the connection with major main chains and ecology.
The value provided by Defiking is to promote the supply and demand of liquidity through smart contract and redistribute the composition of income. Popular application scenarios include but are not limited to:
1) The lending market, matching lender and borrower.
2) The oracle machine, matching the demand side of price sources and data.
3) Asset cross-chain agreement, matching the supply side of custody services and the demand side of asset cross-chain.
4) Decentralized transaction protocol, matching traders (Taker) and liquidity providers (Maker).
It is not difficult to see from the above application scenarios that Defiking’s goal is to provide high-speed, low-cost next-generation decentralized open financial infrastructure for DeFi market participants, including users, developers, financial market institutions and parties to the financial market transactions.
In order to support the faster advent of the era of open finance advocated by Defiking, the DeFi technology protocol container is conceived from the bottom with ease of use and developer-friendliness as its core ideas. The Defi technology protocol container uses modular development functions and open platform protocols to enable project parties and developers to focus on DeFi product operations, rather than in-depth research on technical problems.
For example, developers can focus on how DeFi is applied to their business logic, and then choose the most suitable modular function from the Defiking protocol container.
Once the module and protocol options are determined, the toolkit provided by Defiking may even deploy a brand new DeFi application for the project party before the specific business logic required by the application is fully developed.
It is worth mentioning that the new technology upgrade of the native public chain CWV2.0 in 2020 is the main underlying technical support of Defiking. Its security, stability and rich technical solutions enable Defiking to have BaaS functions dedicated to the development of DeFi applications, which can greatly reduce the developer threshold.
Test data shows that various DeFi applications built with Defiking BaaS functions and protocol containers (options) have an excellent experience comparable to CeFi applications on the CWV2.0 secure and high-performance manner. Since the gas utilization rate is higher and there is no ETH premium cost, the gas cost is cheaper and the network is smoother, which brings a better experience for users and makes the platform more friendly to DeFi application developers. It aids with the development of the entire DeFi field.
02
Trump card: dTrade hits the nail on the head
From the above explanation of the white paper, it is not difficult to see that Defiking is a project approaching the essence of DAO. The decentralized trading platform — dTrade — created by Defiking invested in Defi market by Defiking is the first fully community-owned trump card product. The momentum and speed of dTrade’s development have attracted the attention of the industry.
Firstly.
Although there are many projects that provide liquidity mining on the market, the practicability of direct operation for retail investors is not high.
The reason is that the gas fee on Ethereum is too high and there are technical thresholds such as managing wallets. It is almost impossible to obtain good returns from small-value mining.
The dTrade team believes that DeFi liquidity mining cannot be regarded as a true financial inclusion from this perspective, because it has a relatively high capital threshold and technical threshold.
Therefore, while integrating the advantages of DeFi protocols and liquidity mining, dTrade has completely subverted the “swap” product, and is simpler and easier to interact.
Ordinary users have almost no threshold to use the dTrade platform. There is no need for more bidding or order management of quotations. Small communities and even retail investors can also become market makers and earn multiple benefits by providing liquidity.
Secondly.
The distribution method of cryptocurrency project tokens is a very important part of the entire project ecology. If a reasonable token economic model can be designed to motivate various stakeholders in the system, it will play a vital role in the development of the project.
For dTrade, DFKII’s unique “turbine perpetual motion liquidity mining + parallel deflation mechanism” is an economic model that can not only encourage users to participate continuously, but also promote the rapid iteration of the platform, giving the platform great scalability.
The role of DFKII is to participate in the settlement and governance of the project. It distributes the “benefits” to the actual users of dTrade, not just investors or developers. Compared with all the “swap” products on the market, dTrade reflects the true characteristics of DAO. It may be the closest attempt to the ultimate form of DEX.
Thirdly.
DFKII liquidity mining has been a disruptive and innovative significance. To be specific:
1) Create a dual-circulation mining mechanism to support UniSwap popular transactions and dTrade platform transactions.
2) There is no pre-mining at all and the team has no reservations, which makes it became more popular with ordinary users.
3) Support one-click liquidity mining, no need to deposit two currencies at the same time.
4) Support the mode of pending orders on the chain to improve the success rate of transactions.
5) Transaction slippage control and order queuing system, improving the transaction success rate.
6) DFKII is partially destroyed in the output of liquid mining, a more reasonable deflation mechanism.
7) Adopt reward mechanisms, social communication, and user incentives.
During the DFKII liquidity mining process, 0.25% of the proceeds will be allocated to the liquidity. 0.05% will be repurchased from the DFK2 fund pool to achieve a better deflationary effect.
After users “dig out” DFKII, they can choose to sell them immediately to increase their short-term income. They can also hold them to bind their long-term interests with the platform. They can participate in the governance of the platform with developers to become a part of the platform community.
At last.
For the demand side, after the liquidity is improved with the help of dTrade, larger-scale financial services can be executed.
For example, relying on the Defiking decentralized synthetic asset issuance protocol module, the next step will be to launch dComposite mortgage loan contract products in dTrade. It is conducive to the re-liquidity release of liquid mining mortgage locked assets.
The mortgage pool model allows users to directly use smart contracts. Users perform conversions between DFKII and different cryptocurrencies without the need for counterparties. This mechanism can effectively solve the liquidity and slippage problems encountered by DEX.
DComposite currently supports synthetic fiat currencies, cryptocurrencies (long and short) and commodities. Based on the user’s contribution, the system will proportionally pay the DFK holders the fees generated in dTrade, thereby encouraging users to hold DFK.
The value of DFK comes from the right to use the network and the collection of fees arising from DFKII transactions.
03
DFK DAO Inclusive Finance
From the orientation of the DFKII settlement governance token and its economic model, we can see the belief and consistency of the entire Defiking team in DAO (decentralized autonomous organization). They believe that DAO may be the best tool of further enhancing the degree of decentralization of DeFi products; meanwhile, the popularity of DeFi can also promote the development of the DAO model.
Some critics argue that we cannot label Maker, 0x, Compound as a “decentralized” protocol, because they are all built by centralized companies. These companies can control the smart contracts of such agreements at any time, and even paralyze or terminate them.
But the time dimension cannot be ignored: DeFi protocols cannot reach the degree of complete decentralization on the first day of creation. While the degree of centralization can be gradually reduced over time. The agreement should have some mechanisms, like an emergency self-destructs switch, to stop the operation of the agreement if necessary to protect the user’s assets.
DFK (the Defiking governance token) is such a rapidly iterative DAO organization that transfers control to all token holders to create an effective model of sustainable development, thereby realizing true decentralization and true inclusive finance.
DFK allows its holders to decide some important matters, such as adding new functions for Defiking, the holders can vote on who will activate the emergency switch at a critical moment, and even create a “sub DAO” to specifically handle such matters.
All DFK holders are members of the DAO community to manage the future Defiking protocol container, as well as the LP (liquidity provider) of Defiking. Correspondingly, Defiking’s future earnings and obligations will also be closely related to DFK.
From the perspective of revenue, with the iteration and expansion of system business, DFK has multiple attributes such as governance tokens, settlement tokens, and equity tokens. Based on functions and Token economics, it can be seen that DFK is not only an open growth economic model, but also a reflection for the performance of the profitability of all businesses of the Defiking project. DFK, as a real application-type (functional) Token, has excellent competitiveness in terms of liquidity and deflationary effects.
From the perspective of responsibilities and obligations, DFK holders are equivalent to members and shareholders of DFK DAO. They can propose, vote and decide what changes to make. There doesn’t exist a central agency that can hinder or change the decision. DFK DAO members will receive direct or indirect economic incentives based on their degree of participation to ensure the consistency of incentives.
In fact, it is these characteristics of DFK DAO that make Defiking a powerful governance mechanism. The “Trump card” product — dTrade — is the best example.
A core business of dTrade is to provide non-depository and decentralized token trading services. Both dTrade and DEX have the same basic operations:
1) Decide which coins to list
2) Create an order book to achieve transaction execution and order promotion
3) Make profits by charging transaction fees
In terms of the three operations that need to be performed, dTrade will transfer the decision-making power of currency listing to the holders in the future. All DFK holders can choose the currency to form a transaction and create a liquidity pool. As long as the currency holders provide liquidity to this pool, they can own a share of this pool and have the right to share the income from the pool. Currency holders also have the right to drop the currency as long as they withdraw their liquidity and destroy their shares.
Through DFK DAO’s solution, future currency holders can fully decide the listing and delisting of dTrade. In addition, all handling fees charged by dTrade will be handed over to the liquidity providers of the pool. In this way, currency holders can directly benefit from the operation of the system.
From the perspective of the overall structure, dTrade has been very close to the essence of DAO, and can be called the advanced practice of DFK DAO.
04
Everything in the past is a preface
It has to say that with the rapid development of Defi, dTrade not only demonstrated the milestone achievements of Defiking, but also released its key signals aimed at subverting the DeFi pattern.
In the future, Defiking will provide more DeFi application scenarios for various LP currencies, promote the integration of DeFi and connect all public chains and assets.
Everything in the past is prologue.
This time, Defiking launched the “Trump card” product — dTrade. We have undeniable reason to believe that much more such products will follow up in the future. Three months left in 2020, the market outlook for DFK is highly expected.
