What Is DeFiChain (DFI)?
DFI is the native coin of DeFiChain, which is a decentralized blockchain platform. DeFiChain is a soft fork of Bitcoin that is linked to the blockchain via the Merkle Tree technology (using a Merkle root every few blocks). The main goal of DeFiChain is to solve scalability, security, and decentralization issues of Bitcoin, in addition to bringing the potential of DeFi to the Bitcoin network. Although it forked from Bitcoin, the DeFiChain price does not directly depend on the BTC market position.
Overall, the DeFiChain network offers various financial operations that are typically provided by traditional banks. However, the benefit of DeFiChain, compared to banks, is that the network is decentralized. Thus, there's no one entity controlling the network, which means that the decision-making is in the hands of the DeFiChain community. The main features that DeFiChain offers include:
- Lending and borrowing;
- Non-collateralized debt;
- Peer-to-peer trading;
- Wrapped tokens;
- Asset tokenization;
- Dividend distribution;
- Pricing oracles that collect data from other chains.
Additionally, the ​​transactions on the DeFiChain platform are quick, easy to complete, gas-efficient, and less prone to smart contract failures. This is the case because DeFiChain transactions are non-Turing complete.
If you're interested in the current DeFiChain price, check out the DFI price chart above.
The Story of DeFiChain
The DeFiChain crypto project was launched in 2017 by the DeFiChain Foundation. The DeFiChain mainnet was released on May 11, 2020 (the day when the Bitcoin halving took place). Upon launch, the DFI price was around $0.17.
The DeFiChain Foundation is in charge of expanding the ecosystem of DeFiChain, establishing new collaborations, and managing the DeFiChain coin supply.
Dr. Julian Hosp and U-Zyn Chua are two significant individuals who helped launch the initiative. U-Zyn Chua is the company's researcher and CTO. Chua serves as the chief engineer at Zynesis, as well as the Singaporean government's blockchain advisor. Besides that, he is the co-founder of Cake DeFi.
Dr. Julian Hosp is also a co-founder and CEO of Cake DeFi. Overall, he is a well-known and respected expert in the crypto sector.
The DeFiChain price passed the $1 threshold within six months of its launch. It has shown a tendency to follow the overall market trends, adjusting to the bullish and bearish value fluctuations that major cryptocurrencies like Bitcoin experience.
How Does DeFiChain Work?
The DeFiChain crypto project employs a hybrid consensus mechanism that combines the traditional Proof-of-Work (PoW) consensus mechanism with the innovative Proof-of-Stake (PoS) consensus mechanism.
However, DeFiChain focuses the majority of the consensus on PoS while leveraging the best features of PoW, such as using hashing of the staking node's ID for block constructions. Thus, masternodes (staking nodes) can operate on DeFiChain's PoW process without spending money on top-tier servers and high-speed bandwidth connections.
Overall, masternodes take part in block generation and live transaction validation. DFI stakers need to have at least 20,000 DFI to run a masternode.
Lastly, it's worth mentioning that DeFiChain makes use of Atomic Swaps. In essence, these are smart contracts designed to facilitate a decentralized exchange of crypto assets between blockchains without the need for a middleman.
Instead of calling this feature a DEX (decentralized exchange), DeFiChain calls it an ICX (interchain exchange). ICX is set up as a conventional exchange where users place bids in order to get assets, in contrast to DEX, which is an automated exchange feature.
The Purpose of DFI Coins
The main functions of DeFiChain coins include:
- DFI can be used as a governance token, which means that the holders of DFI tokens are able to vote upon various decisions considering the further development of the system and the distribution of its funds;
- DFI can be used as a payment method. This implies that any fees incurred during the execution of transactions, smart contracts, or other DeFi operations within the DeFiChain network can be paid for using DFI tokens;
- DFI can be used as collateral. This means that every time users want to lend or borrow other crypto assets, they are able to do so by using DFI as collateral;
- DFI can be used to provide liquidity for the decentralized exchange between crypto assets;
- DFI can be used to create non-refundable personalized DCT (DeFi Custom Tokens).
If you're planning to purchase DeFiChain coins for governance or on-chain payments, note that the DFI price is subject to fluctuation.
Tokenomics of DFI Coins
The maximum supply of DFI coins is 1.2 billion. As a token with limited supply, it's considered to be anti-inflationary. Therefore, with time, the DeFiChain price is likely to rise.
However, the distribution of DFI coins is somewhat different from most crypto assets since DeFiChain didn't hold any IEOs, ICOs, or sales rounds. Consequently, the distribution of DFI tokens has not been profitable to the foundation or the founders.
The total DFI supply is split into two parts (49% and 51%) that are dedicated to the initial supply and masternode holders accordingly. However, the initial supply is further divided into three parts: 26% of the tokens have been airdropped, 27% burned, and 47% destroyed. Besides, the tokens dedicated to masternode holders will only be released over time. If you're interested in the current DFI price and supply, you can find the relevant data above.
