The Landscape of TomoChain Decentralized Finance
Stemming from a solution to the scalability problem in Ethereum and other blockchains, TomoChain has been fully operational and rapidly evolving its own diverse decentralized finance (DeFi) system.
Born in 2009, Bitcoin has been considered as the first DeFi application of blockchain, allowing anyone with an internet connection to make peer-to-peer, cross-border payments within around 10 minutes and with a transaction fee less than 10 USD (regardless of how much the transaction is carrying!.
Launched since December 2018, TomoChain Mainnet has been running stably with different financial applications/services allowing everyone with an internet connection, to access those services from everywhere all over the world.
If Bitcoin is considered as the first DeFi application, TomoChain will be the backbone of decentralized services built upon public blockchain and cryptocurrency technologies.
This article will walk you through the landscape of those DeFi applications and services on TomoChain.
What does TomoChain provide?
- As a general blockchain platform, TomoChain presents as an ideal platform to make near-zero fee and instant transaction confirmation by scaling up to 100 times of the Ethereum transaction speed. Securing, transferring, staking TOMO, transferring tokens, and using DApps on TomoChain can be all done by using TomoChain’s easy-to-use official mobile wallet TomoWallet.
- As a Proof-of-Stake chain, TomoChain also has on-chain Staking services that allow people to secure the chain and earn TOMO as rewards.
- Staking as voter: depositing TOMO to the TomoChain consensus TomoMaster contract to earn 7% annual interest as passive income.
- Running a masternode: depositing 50k TOMO and being voted by voters to earn around 30% annual interest.
- TomoChain has been developing three more core innovative protocols to support the TomoChain DeFi ecosystem:
- TomoZ: Zero Friction Protocol allows token holders to pay transaction fees in the tokens the holders are holding, which removes today’s cryptocurrency user friction.
- TomoX and Relayers: Efficient and secure decentralized exchange protocol that allows businesses/investors/exchange operators to make decentralized exchanges and lending platforms within a few minutes.
- TomoP: TomoP is a privacy protocols developed on TomoChain and designed to create safe and untraceable transactions. Freely send tokens knowing the sending and receiving wallet addresses are anonymous, and the value transferring between the addresses is private.
Decentralized Finance (DeFi)
Decentralized Finance (DeFi) is essentially about applications built using blockchain technology allowing anyone with an internet connection to access/use financial services based on blockchains
DeFi applications can be categorized into several types that are briefly defined below. We will then show how these applications are supported in TomoChain.
Cross-border payment system
Payment system is a major part of any commercial application. P2P payments allow everyone to make fast cross-country good/service payments and to significantly reduce transaction costs compared to traditional banking/payment gateway systems. TomoChain with its native token TOMO can be integrated into any existing payment system and provide the following advantages:
- Secure P2P payment system: Users control their wallets. No intermediaries are between the sender and receiver of a transaction.
- High transaction speed: 2000 TPS
- Instant confirmation: transaction confirmed within 2–4 seconds
- Near-zero fees: transaction fees are 1000 times less than Ethereum transaction fees.
- User experience: TomoWallet — one of the best mobile wallets with a seamless user experience
Decentralized exchanges
Exchanges have always been a major part of the whole cryptocurrency ecosystem. As the security of centralized exchange has been becoming more and more concerned, decentralized exchanges will soon become the long term solution for exchanges and security. Making decentralized exchanges efficient, secure, and frictionless is a challenge for the whole crypto ecosystem in general.
TomoX is TomoChain’s decentralized exchange protocol that has the following advantages:
- Allow anyone to create an efficient DEX within a few minutes and with a very low cost
- Allow to easily manage and list different tokens on the exchange through a professional, easy-to-use TomoRelayer Dashboard
- Allow traders to trade in a non-custodial manner and to pay trading fees in tokens, which remove completely the friction of requiring to having TOMO in traders’ wallet.
- Full decentralization: All orders are stored in a decentralized order book and matched by a decentralized matching engine that none of the existing DEXs has this decentralization level.
- All DEXs created based on TomoX share the same order book, which allows to connect all traders’ orders in order to increase network liquidity, which is a real problem in most existing DEXs.
- Cross-chain swap through TomoBridge allowing traders on TomoX relayers to trade for cryptocurrencies on other chains such as BTC, ETH.
TomoX Mainnet was successfully launched on May 2020 and has been running stably and been seeing significant gain in the number of traders and the trading volume. TomoX now has around 300k USD daily volume, which makes its volume become in top 10 of the most volume DEXes in the whole cryptocurrency industry.
TomoSwap is a token swap application that allows holders to instantly swap TOMO for other tokens. TomoSwap allows making atomic swaps between different tokens on TomoChain. MyConstant also allows TOMO holders to swap TOMO for the Constant stablecoin.
Staking
PoS networks use validators/block producers/masternodes who create, propose, or vote on blocks added to the blockchain. From the customer point of view, Staking is similar to interest savings account in a traditional bank. In DeFi, infrastructure service providers such as staking pools and Staking-as-a-Service providers play the role of the bank, running nodes for decentralized PoS protocols on behalf of investors.
On-chain standard Staking via TomoMaster
As a Proof-of-Staking-based blockchain, TomoChain provides on-chain staking services via TomoMaster through the Proof-of-Stake Voting consensus protocol. By holding TOMO, TOMO holders could either choose to run a masternode or vote for masternodes to receive rewards as follows:
- Running a masternode: Masternode owners will have around 26% annual interest. To become a masternode candidate, a 50,000-TOMO deposit to the governance smart contract TomoMaster is required. More importantly, the masternode candidate must run a fullnode and also needs enough votes from TOMO holders to be in the top 150 voted candidates in order to receive masternode rewards.
- Voting for masternodes: Unlike running a masternode, voting is much simpler as it only requires holders to have at least 10 TOMO (which is the minimum amount of TOMO for voting). Voters should vote for good masternode candidates in order to earn an annual interest of around 6.5%.
Rewards payout is done every 30 minutes. TomoWallet has great support on voting and tracking staking rewards on TomoChain.
TomoPool — A decentralized layer 2 staking that allows to pool stakes from small stakers to create a bigger pool to run a masternode. Rewards earned by the pooling masternode is then proportionally distributed to all stakers. Staking in pools gives stakers higher rewards than on TomoMaster as there is no distinction between masternode owners and stakers.
Lending applications
Peer-to-peer (P2P) lending applications on blockchains allows removing intermediaries from the current lending system, thus significantly reducing execution costs. Compared to traditional lending platforms, blockchain-based P2P lending applications have the following advantages:
- Cost Reduction: Blockchain could reduce costs by allowing borrowers to deal with lenders directly.
- Time: Blockchain could make the entire process quick by adding regulations in the smart contracts.
- The different rate of interest: The smart contracts could auto-generate the fixed rate of interests based on the profile of a borrower.
TomoDEX offers a legit lending platform:
- TomoDEX is non-custodial: No centralized parties hold the funds of lenders and borrowers.
- TomoDEX offers P2P lending platform: Lending/borrowing via lending pools is a great concept but it does restrict the flexibility of the interest rate. TomoDEX, with a decentralized loan matching engine powered by TomoX, is a loan-like marketplace platform where lenders and borrowers match their loan contracts/orders with their expected interest rates.
By allowing users to set their interest rates, TomoDEX is truly based on market demand driven by human behaviors. The market includes both users who would be willing to accept low enough interest but also some who would borrow with high interest during the high demand period. We believe this is how a natural lending platform should work to connect lenders and borrowers, instead of having an algorithmic interest rate which does not fully reflect the market.
TomoDEX liquidity is provided by various means through TomoX’s giant liquidity order book, allowing any lenders and borrowers from different relayers to set their loan contracts in a decentralized manner through a loan matching engine.
For more detailed information about TomoDEX, we recommend readers to refer to this article.
Constant
Constant is the pioneer P2P lending application on TomoChain. In Constant, there are no intermediaries between lenders and borrowers. All interact through a set of smart contracts. In order to make a USD loan contract, borrowers deposit TOMO or tokens to the smart contracts. The TOMO/USD rate is dynamic and depends on the current funds of TOMO and USD in the contracts. In order to borrower 100 USD, the borrower must deposit the amount of TOMO which is equivalent to 150 USD.
In order to secure the borrowed funds, the lenders are allowed to liquidate the deposited TOMO if TOMO price drops 33% compared to the price when the deposit is made.
A powerful platform for token issuance
As a public blockchain that aims for a token economy, TomoChain has developed a number of tools and token standards that ease token issuance and interaction.
- Support for standard tokens well-known on Ethereum such as ERC20 and ERC721, which are renamed to TRC20 and TRC721 on TomoChain
- TRC21 & TomoIssuer: An extension of TRC20 that is designed for removing friction in cryptocurrency adoption by allowing token holders to pay transaction fees in the tokens instead of TOMO. TomoIssuer allows anyone to issue a TRC21 token on TomoChain without any smart contract programming knowledge.
- Tokens and Exchanges: Any TRC21 token could be easily listed by TomoX Relayer Owners. Trading fees are also paid in tokens instead of in TOMO.
- Triip is the first successful ICO on TomoChain. TomoChain is also helping other enterprises to build token-based applications on TomoChain.
Personal Financial Privacy
Privacy is necessary for ensuring freedom on the internet. When your transactions are being watched — or when your transaction history is available to be known — a person isn’t free to make their own decisions. With other digital currencies, bad actors are able to match people to their balances and details about parties involved, amounts and trends.
Tremendous amount of work and investment has been devoted to the development of blockchain technology to solve current problems, i.e. scalability and privacy, with the technology itself as well as to maximize the adoption of the technology in daily life.
The majority of public blockchain technology/platforms have a built-in cryptocurrency in which every transaction shows the amount of tokens or native coins that the sender is transferring to the recipient. In this regard, blockchain provides transparency to all users, which is not always expected by the majority of businesses. A business would like to hide the transaction amount, instead of showing it to everyone.
TomoP — a protocol proposed by TomoChain for private transactions on the TomoChain public blockchain. TomoP allows creating anonymous transactions that hide all related information on value, sender, and receiver’s addresses to preserve the financial privacy of TOMO and tokens holders on TomoChain.
TomoP is the EVM-compatible private transaction protocol with very fast transaction speed that allows anonymizing the transaction sender in a transaction without requiring an intermediary.
TomoP features:
- Super Fast and User-friendly: Easy one-click step to switch from public to privacy mode. 2–4 second confirmation time!
- Confidential: All transactions are hidden, including senders, receivers & amount
- Multiple chain support: TomoChain Blockchain tokens and those from other chains like BTC, ETH & USDT
- Regulatory Compliance: TomoP users can share view keys with authorized entities to allow for them to audit transaction information.
For more information about how TomoP works and which cryptography techniques are used in TomoP, we invite readers to visit our TomoP landing page.
Conclusion
Since the successful Mainnet Launch in December 2018, TomoChain with a very healthy community has had a great achievement:
- A diversified Decentralized Finance Ecosystem where TomoChain is touching on almost everything happening in the DeFi space now.
- More than 23 millions of blocks are created by the masternode network, which is far greater than the number of blocks produced by Ethereum (almost 9 million at the writing time).
- Many tokens, verified smart contracts/DApps, and and transactions have been executed by the TomoChain blockchain. For up-to-date information, please refer to TomoScan for detailed stats information about TomoChain.
The recent TomoX Launch is TomoChain’s significant step for a broad and bright Decentralized Finance Ecosystem future. We look forward to to seeing a mass adoption of TomoChain’s technology in different services, not just in Decentralized Finance.
