DeFiChain: A DeFi solution that bypasses the "system risk" of Turing-complete blockchains

撰文：Groot

The rapid development of DeFi has led to a new bull market in the cryptocurrency space, with Ethereum shining brightly due to the surge of numerous applications. However, because Ethereum is a Turing-complete general-purpose blockchain, "anything can happen," which exposes projects built within the Ethereum ecosystem to risks that are difficult to completely avoid. Turing-complete languages have looping execution statements, conditional branching statements, etc., which can theoretically solve any algorithm. Its characteristic is that it can support programs to run in loops indefinitely, but the downside is that it may enter an infinite loop, causing the program to crash.

In contrast, the non-Turing-complete blockchain DeFiChain proposes a DeFi solution that can circumvent such "systemic risks."

What is DeFiChain?

DeFiChain is a blockchain specifically designed for open finance. It aims to provide high transaction throughput while maximizing security levels and developing transaction functionalities specifically for financial services on the blockchain. DeFiChain lowers the barrier for users to access open financial services through non-Turing-complete blockchain technology.

Although Bitcoin is increasingly viewed as a digital asset for value storage, it is still recognized in the mainstream market as the standard for measuring other cryptocurrencies. Most discussions within and outside the crypto community revolve around Bitcoin's vast community and ecosystem, indicating that Bitcoin can serve as a long-term value storage solution. Currently, DeFi open finance within the Bitcoin ecosystem is still in its early stages of development, presenting a market opportunity. The lack of extensive development is partly due to the significant difficulty in creating smart contracts that are compatible with the Bitcoin network. Another reason is the absence of a centralized management approach for most projects within the developer community. If these issues can be effectively addressed, open financial services that combine stability and scalability will be highly anticipated.

To ensure the security and permanence of the blockchain at all times, DeFiChain is anchored to the Bitcoin blockchain. Every few minutes, DeFiChain saves the latest Merkle tree to the Bitcoin blockchain. In this way, the latest chain is always completely secure and immutable, and can be verified against the latest records anchored on Bitcoin. Over time, DeFiChain will space out the anchor points at larger intervals. At the same time, DeFiChain retains its own consensus mechanism and feature set.

DeFiChain ensures security through a proof-of-stake consensus mechanism, aiming primarily to reduce errors made by developers during the smart contract coding process compared to general Turing-complete blockchains. DeFiChain supports all major crypto assets and various decentralized financial trading scenarios on-chain, particularly for real-time interaction of transaction records.

DeFiChain supports rapid dApp development and an on-chain + off-chain governance model. Initially, it provides a comprehensive set of "open financial service functionalities," including open lending, decentralized token pegging, decentralized oracles, decentralized exchanges, transferable debts and receivables, decentralized non-collateralized debts, and asset tokenization for dividend distribution, laying a complete infrastructure for building the DeFi ecosystem.

The DeFiChain mainnet was launched in May 2020, coinciding with Bitcoin's third halving. To date, DeFiChain has been operating its mainnet and various functions stably for over a year, and the stability and sustainability of the on-chain open financial ecosystem have been preliminarily validated.

Currency $DFI

DFI is the ecosystem currency launched by DeFiChain, with a total issuance not exceeding 1.2 billion coins. DFI can be used to pay for all transaction and smart contract fees on DeFiChain. This includes, but is not limited to, DEX trading fees, token transfer fees, and interest on loans in open financial services. DFI is also used as collateral currency for borrowing other crypto assets on DeFiChain, requiring 20,000 DFI to operate a DeFiChain Staking master node, while submitting a community proposal requires a payment of 500 DFI. The initial requirement to set up a master node was one million DFI, which was reduced to 20,000 DFI after DFIP #4 (DeFiChain Improvement Proposal #4).

Of the approximately 1.2 billion DFI tokens, 49% will be issued to the DeFiChain Foundation at the outset. The remaining portion will be distributed over time as block rewards for master nodes. In mid-2021, there was a governance vote to destroy all foundation tokens to achieve complete decentralization. DeFiChain has never conducted any seed funding, external financing, or ICOs; all block rewards come from user participation.

Team

The DeFiChain team is led by Chief Technology Officer and Chief Researcher U-Zyn Chua. U-Zyn Chua has collaborated with the Singapore government to launch a national blockchain project and has led the world's first officially launched national central digital currency project in the Bahamas. Another co-founder, Dr. Julian Hoss, has extensive experience in business and marketing, transitioning from the medical industry to research in the blockchain field, and is currently a prominent expert in the cryptocurrency space with a significant following on video platforms in German-speaking countries.