DeFiChain is Proof-of-Stake (PoS) blockchain whose fundamental architecture borrows heavily from Bitcoin’s blockchain. This DeFi-native ecosystem leverages customized transactions (DfTx) to enable the integration of more advanced DeFi applications. Read on to learn more in this DeFiChain Review.
At the core, DeFiChain’s goal is to create opportunities for crypto users to generate a passive income while enjoying the benefits of operating in a secure and decentralized market.
Founded by DeFiChain Accelerator LTD, the project launched its mainnet back in May 2020 at the onset of the popular DeFi summer bull run.
Today, DeFiChain touts over 650 million in total value locked (TVL) while its native token $DFI is trading at $4.5, an increase of over 40% within the past year. Let’s take a deeper dive into this burgeoning project to understand why it has been gaining traction.
The DeFiChain Ecosystem
Despite the emergence of various DeFi protocols in recent years, not all have lived up to the hype. Well, that’s not the case for DeFiChain; this particular PoS blockchain has the backing of experienced crypto market innovators led by Dr Julian Hosp and U-Zyn Chua.
The two Co-Founders have been pivotal in developing DeFiChain’s ecosystem which is now bringing decentralized assets to Bitcoin’s blockchain.
So, what are some of the functionalities that DeFi users can access on DeFiChain? Powered by the $DFI token, this PoS blockchain offers several income-generating opportunities. Users can access the features by purchasing $DFI on KuCoin, Bittrex or DFX and sending the tokens to their DeFiChain wallet.
Alternatively, crypto holders with native tokens such as BTC or ETH can use CakeDeFi’s staking pools to deposit their assets.
Once the tokens have been deposited, users can interact with DeFiChain to diversify their investments. Here are some of the DeFi opportunities that are currently available;
As mentioned earlier, DeFiChain is a PoS blockchain which means that the platform is secured by a distributed network of nodes. One can become a node validator on DeFiChain by committing 20 DFI tokens through staking pools featured on DFX Swiss or CakeDeFi.
In return, DeFiChain rewards the node validators for their contribution toward keeping the network operational and secure. A simple way to generate some extra income.
Liquidity Mining is another way for DeFi users to participate in the DeFiChain ecosystem. The project has introduced several $DFI liquidity pairs which allow stakeholders to allocate their capital in different pools.
Similar to the AMM model used by DEXs like Uniswap, DeFiChain’s liquidity mining program is designed to enhance on-chain activity via network incentives. A model that goes a long way in enhancing liquidity and attracting more users.
Decentralized Stocks and Loans
Most notably, DeFiChain is the first PoS Bitcoin fork to launch on-chain assets that mirror the real prices of stocks such as Tesla and native crypto assets like ETH and LTC. Ideally, one can leverage the DeFiChain platform to purchase synthetic assets such as dTSLA, dETH, dBTC and dLTC.
While these assets do not give direct exposure, one’s portfolio value is dependent on the price movement of the underlying asset.
It is also possible to mint stock tokens and dUSD (a stablecoin) by placing one’s dBTC or dETH as collateral. This model can be compared to MakerDAO’s lending protocol which is designed to solve short-term liquidity needs.
However, it is noteworthy that DeFiChain offers a more diverse collateral range, given that users can lock synthetic assets. Furthermore, DeFiChain will soon introduce decentralized futures and options to scale its DeFi portfolio offerings.
In addition to DeFiChain’s product suite, this DeFi-oriented ecosystem offers a more seamless user experience, competing with some of the leading layer-1 blockchains (Avalanche, Solana and Ethereum).
Crypto users who opt to scale their DeFi net worth via DeFiChain will enjoy the platform’s high transaction throughput while executing their market strategies at a cheaper cost.
DeFiChain’s decentralized governance ‘DAO’ is another plus for Web 3.0 die-hards. Unlike the current financial ecosystem where centralized players run the show, DeFiChain sets the stage for a completely decentralized market; the project’s community can initiate proposals and vote on upgrades to improve the supporting fundamentals.
Last but not least, DeFiChain’s immutable nature means that no one can tamper with historical data that has already been added onto the blockchain. This PoS blockchain serves a perfect tool for DeFi users to manage and hedge their portfolios within a trustless and verifiable market ecosystem.
Looking Into the Future
The larger DeFi market has been on an upward trajectory, with a total value locked (TVL) of $220 billion according to the prevailing stats on DeFi Llama.
This goes on to show the untapped potential in decentralized markets; DeFiChain is one of the ecosystems whose fundamentals could attract more capital in the near future.
As per the project’s roadmap, they plan on introducing more decentralized assets, giving DeFi users exposure to financial instruments such as ETFs, indexes and bonds.
With this in place, DeFiChain envisions an ecosystem where crypto users can diversify their investments without being limited to on-chain digital assets.