With the speed at which the cryptocurrency industry moves, new projects come up every time, heralding new ideas that will propel the industry forward. The same is the case for DeFi, and the most interesting thing is how new projects can create solutions that address current problems and set the stage for a more decentralized future.

Among these projects is dForce, an innovative project offering cutting-edge DeFi solutions for its users. dForce aims to create a more decentralized future for finance, and this article will discuss how dForce plans to achieve this.

What is dForce?

Source: medium.com

dForce is a DeFi project that aims to create an open and permissionless financial infrastructure for Web3 decentralized applications. It provides protocols for stablecoins, lending, yield optimization, swaps, trade aggregation, and more.

dForce is a multi-chain platform that develops integrated open finance solutions for stablecoins, digital assets, and lending. Initially serving as a crypto aggregator for DeFi projects, dForce now integrates various blockchain platforms, fast becoming one of the most widely used DeFi services globally.

Based in China, dForce has established a strong presence and integrated all the DeFi applications within the country. Next, it aims to expand its reach to encompass networks and platforms worldwide.

History of dForce

dForce was founded in 2019 by Mindao Yang, former director of Honey Capital, and co-founder Xin Xu, the CEO of Sparkpool, the largest Ethereum mining pool globally.

The project has received significant backing, gathering up to $1.5 million in funding from its seed round, led by Texas-based crypto venture fund Multicoin Capital in April 2020. Other investors include Huobi Capital and China Merchant Bank International (CMBI).

How Does dForce Work?

The future of DeFi is expected to involve complex yet interconnected protocol models driven by tokens. These models could form superclusters, reshaping a substantial part of the financial landscape. Similarly, dForce developed a log model to maintain liquidity within its system and minimize leaks, aiming to provide stability and efficiency in the open finance or DeFi space. This log model comprises an asset and loan protocol.

The asset protocol encompasses stablecoin and yield token protocols, providing a comprehensive framework for asset tokenization and yield generation. Asset logs work as digital vaults for crypto assets, allowing users to deposit different cryptocurrencies into these secure vaults. However, dForce provides more than simple storage. It also allows users to tokenize these assets, creating a digital certificate on the blockchain that verifies ownership.

The asset protocol is similar to DAI in the MakerDao system, enabling the tokenization of both on-chain and off-chain assets. Additionally, the asset protocol includes yield tokens like cDAI or dDAI, which represent interest-bearing instruments in a for-profit pool.

DForce also features a loan log or protocol comprising the dForce Lending Protocol and the Hybrid Lending Facility Platform, offering separate credit pools to serve diverse user needs and risks. This hybrid model caters to a broader market while maintaining flexibility in financing costs for borrowers, thereby enhancing accessibility and adaptability within the dForce loan protocols.

Key Attributes of dForce

dForce’s innovative system unlocks unique features to empower users to do more with their assets. These include:

Grants

The dForce Grants Program (DGP) is a community-driven project managed by the dForce DAO. It aims to fund innovative ideas from the dForce community to boost its growth. Two types of grants are available: micro-grants of less than $5,000 and community grants ranging from $5,000 to $50,000. Developers can submit their proposals on the forum, and the dForce Grant Committee will review and approve them case-by-case.

dForce Vault

The dForce Vault helps users maximize their assets by accepting a broader range of assets as collateral for minting USX stablecoins. As such, users can leverage more of their crypto portfolio to mint USX, even using assets with different risk profiles. This approach enables users to increase their borrowing power while controlling potential risk.

Additionally, the Vault offers custom vaults for different types of collateral, including interest-bearing tokens, LP tokens, niche DeFi staking tokens, and other uncommon assets. Each vault has risk management settings, such as adjustable borrowing interest rates, debt and supply caps, loan-to-collateral ratios, and defined liquidation and borrowing fees.

Because of this personalized risk management system featuring debt and borrow caps, the vault-based model works better for less common assets like LP tokens. Unlike the Pool-based model, which uses market-driven rates, it also utilizes a fixed interest rate.

AI-driven Automation for DeFi

dForce believes that AI technology will soon handle most crypto tasks. They have already created AI agents for crypto trading and are working on tokenizing delta trading strategies. They aim to introduce more AI-based tools for DeFi protocols, such as automated interest rate setting.

Main Features of dForce

dForce has four main products in its ecosystem. These include USX Finance, Unitus Finance, the dForce Bridge, and Legacy dApp.

Unitus Finance

Source: unitus.medium.com

Unitus Finance (formerly dForce Lending) aims to become a global money market bridging the gap between crypto and traditional finance. They aim to achieve this by facilitating seamless lending and borrowing across multiple blockchains, encompassing crypto and real-world assets. This ambitious vision extends beyond the typical DeFi ecosystem, aiming to connect on-chain and off-chain functionalities.

Unitus Finance will be launched in two stages. The current “Guided Launch” stage is built on dForce’s existing lending features, including a global liquidity pool and dynamic interest rates. However, the upcoming “Cruise Launch” promises even more features. This stage will provide users with a comprehensive suite of DeFi tools while optimizing capital efficiency.

Unitus boasts several features that set it apart from existing DeFi protocols. Its multi-chain functionality allows users to leverage lending and borrowing capabilities across various blockchains. Additionally, Unitus’ tokenomics and liquidity mining mechanisms incentivize long-term participation and ensure everyone’s interests are aligned. Finally, Unitus focuses on capital efficiency by allowing higher loan-to-value ratios for various assets, including crypto and real-world asset yield generators.

USX Finance

USX is an over-collateralized stablecoin backed by more collateral than its face value. As a decentralized and algorithmic stablecoin, it implements a dual model (pool-based and vault-based) alongside a hybrid interest rate policy, making it highly efficient and flexible for supporting collaterals with different risk profiles. USX is powered by protocol-controlled liquidity, allowing for protocol-to-protocol integrations and cross-chain bridges, which enable users to move USX across supported blockchains with zero slippage and uncapped limits.

One of the key features of USX is its flexible minting models, which allow for minting through dForce Vault, borrowing from supported lending protocols, and 1:1 ratio swap with supported stablecoins. The stablecoin also boasts a hybrid interest rate policy, enabling minting with fixed interest rates under the Vault model and market interest rates powered by dForce’s PDLP module. It also has multichain liquidity capability, allowing it to be minted natively on all integrated chains. Unlike traditional stablecoins, it also serves as a cross-chain bridge with a liquidity guarantee.

dForce Bridge

This bridge is a gateway for transferring dForce’s native assets, the USX stablecoin, and the DF token, across different blockchains within the dForce ecosystem. This allows users to seamlessly move their funds between different DeFi applications on dForce, regardless of the specific blockchain. By enabling this cross-chain transfer, the dForce bridge boosts the adaptability and effectiveness of the entire dForce DeFi platform.

dForce Trade

dForce trade is a decentralized exchange (DEX) aggregator that uses an algorithm to find the best trading prices and combine enough liquidity from various platforms to optimize trading. It is also integrated with different DEXs, such as BSC and Ethereum.

Governance on dForce

Before a proposal gets to the official voting stage, it will be thoroughly debated on the dForce Forum. This exchange of perspectives ensures proposals are well-considered and address the needs of the community at the same time.

Once a proposal gets enough approval, it enters a 72-hour voting window. At this stage, DF token holders cast their votes. For a proposal to be approved, it must pass the voting stage with a minimum of 50% approval. But where it falls short, it can still be resubmitted for another chance after further refinement based on community feedback.

dForce features various types of proposals. For example, dForce Improvement Plans (DIPs) focus more on the bigger picture, charting courses for new product launches, feature updates, and strategic operational changes. UIPs focus more on liquidity mining parameters and the loan-to-value ratio with other stablecoins. However, since Unitus Finance and USX are still relatively new products, they are still under the governance of the DF token until it is distributed well enough to ensure fairness in voting.

Nonetheless, as Unitus Finance and USX mature, they will have their dedicated governance structures – Unitus Improvement Plans (UIPs) and USX Improvement Plans (XIPs).

What is DF?

DF is the native ERC-20 token of the dForce ecosystem and serves various functions. It works as a governance token, payment for transactions, system stabilization, and incentives. Only DF holders can vote on major changes to the project via a snapshot.

DF Tokenomics

DF has a total supply of up to 999.93 million tokens, with a current circulating supply of 432.03 million tokens and a market cap of $31.62 million. The token was distributed as follows:

• 20% was allocated to investors, consultants, and early investors
• Another 20% was reserved for the development team
• 25% was allocated to the gravity pool
• 10% was set aside for the ecosystem’s development
• 25% was allocated to the Foundation for the general support of dForce.

News on DF

This January, dForce announced a 1M ARB liquidity mining campaign on Arbitrum, which they received through the Arbitrum STIP grant program. dForce distributed these tokens over 10 weeks, starting January 18, through various marketing campaigns targeted at all Arbitrum users.

The initiative focused on driving user engagement with dForce’s offerings within the Arbitrum ecosystem. This included incentivizing activity on their Unitus lending platform, boosting liquidity for their USX stablecoin on decentralized exchanges (DEXs), and promoting the use of liquidity provider tokens (LSDs) on Arbitrum.

Is DF a Good Investment?

dForce stands out as an innovative DeFi project looking to become one of the big players in the industry. Starting from its home base in China, it will integrate with other projects worldwide. As interesting as this project is, it is essential to remember that the crypto market is quite volatile. As such, it is best to research and consult qualified personnel before investing in any project.

Take Action on DF

DF can be found on centralized and decentralized exchanges, such as gate.io. Click here to view and trade your preferred pairs.

• DF/ETH
• DF/USDT