Research about DFinance – DeFi Hub on Internet Computer

What is Dfinance?

The DFinance platform includes a set of DeFi protocols, allowing users to issue their tokens, trade their tokens, and earn rewards by providing liquidity. In the future, more features will be developed.

DFinance runs entirely on the Internet Computer protocol, allowing it to provide a variety of decentralized financial services with maximum efficiency.

What’s more, DFinance con is one of more than 40 projects that received their first $25,000 funding from the DFINITY Foundation and conducted the first round of Airdrop.

What is special about Internet Computer DEX (ICP)?

Transaction speed is maximized, and users will experience transaction times as fast as web browsing.
Security and anonymity from Internet Computer’s protocol
With the gas fee return mechanism, users will not need to pay gas fees on Internet Computer
There is no tie or control over InternetComputer
Nodes do not run on any corporate cloud
Powerful smart contracts. Canisters will change the way we approach DeFi, by combining it with many things – Tokenize Everything!
Opportunity to interact and thrive with smart box contracts.
Everything runs on-chain – front-end, backend, and administration.
A platform that promotes absolute user experience

What Dfinance is building?

Like other Dex exchanges, Dfinance is an AMM decentralized exchange that allows users to quickly and directly trade with a liquidity pool without going through an intermediary.

DFinance’s goal is to become a DeFi Internet Computer hub. They are building an application that issues tokens and a decentralized exchange (DEX) targeting both regular users and developers.

Users can easily issue and exchange their tokens on Dfinance’s platform. And developers can issue tokens for their projects using Dfinance’s token-issuing app and build their products on top of Dfinance’s DEX APIs.

Token Standard – Token Standard

Token standard – the token standard is essential for the DFINITY ecosystem, especially for the decentralized financial system. Cryptocurrency wallets need a unified token interface to manage different tokens, developers need a token canister template to issue their tokens for projects. their judgment. The token standard is the base layer of DeFi, so this is Dfinance’s first focus.

Token Issuer App

Dfinance will build a token issuing application (called DToken) based on the token template they have built so that users can issue their tokens with a user-friendly web interface of Dfinance without any coding.

In addition, they will provide token management functions such as minting new tokens, burning tokens, and transferring tokens. Users can also fund their token canister using the web interface.

Below is the architecture of the application that issues the token. When a user signs up for a token through the web interface, Dfinance deploys a token (canister) box for the user.

Decentralized Exchange

DFinance’s core product is a decentralized exchange called DSwap. It uses an automatic market-making mechanism (AMM). Liquidity providers earn a swap fee and traders pay a 0.3% fee for each swap. Users can swap their tokens in DSwap. External developers can build their applications (such as liquidity farming applications) based on the APIs that Dfinance provides.

Internet Computer does not guarantee the atomicity of interbox calls. This is a sacrifice for scalability, so we need to avoid calls between boxes to ensure the safety of user funds. The above is the original architectural design of DSwap. They use tight coupling construction, aiming to implement AMM functions in a single box. Therefore, no interbox calls are involved in the swap. Execution in a single box is single-threaded and atomic.

Features in the testnet
Dfinance Swap

DFinance offers lightning-fast swapping while remaining completely decentralized, which is only possible on the Internet Computer network.

There will be a lot of tokens for everyone to choose from. The testnet allowed everyone to claim DFCT and WICPT tokens for testing.

To be able to swap or add liquidity, users must deposit tokens into DSwap – the swap wallet if they want to swap or provide liquidity.

After depositing into Dswap, the message shown below is successful.

Users can withdraw tokens whenever they want from DSwap wallet to DFinance wallet. The send function allows the internal transfer of assets to other addresses in the DSwap box.

Just like other DEXs, people need to choose the token they want to swap and the token they will swap to. And of course, people can also change slipping.

Add Liquidity

Besides swaps, people can provide liquidity using swapped addresses. Go to the liquidity menu and select the pair.
There will be many token pairs for everyone to choose from.

Or everyone can choose for themselves the token pair they want, here I will give an example of the DFCT/WICPT pair.

And after adding liquidity, everyone who goes back to their wallet check will see the token pair they just added.

Liquidity Farming

Users can provide liquidity for specific token pairs and use tokens. Liquidity Provider (LP) for staking and earning rewards from liquidity pools.

LP tokens can be withdrawn by pressing the Redeem button.

Roadmap

Dfinance has been on the right track after announcing the testnet before September. In the Dfinance public roadmap, they will use DUSD which is a stable coin under the CDP model pegged to USD, backed by Dfinance. underlying assets such as ICPs.

Conclude

After Dfinance released the testnet, the project received a lot of feedback about the slow system and some minor bugs. However, we should also understand that there is no such thing as a perfect product right from the start of the testnet, and so is Dfinance, those errors are still within the acceptable range. Dfinance devs have also actively responded to user feedback and updated bugs.

DeFi will be a key component of the DFINITY ecosystem and DFINITY will allow more people to benefit from DeFi. I believe, with what they can do, in the future, the DEXs of Internet Computer in general and Dfinance, in particular, will be extremely developed.

See ya in the next article !

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