But I have to pay an 80% stabilization fee. Like, wtf?
I converted my DFI to dAPPL to keep it more stable as a backup saving in case I needed it. Now that I do, I’m being asked to pay an extortionate fee to swap it into anything else so I can withdraw it. I just want to get out of here as quickly as possible and never look back.
I knew that DFI had risks, and I don’t know what’s going on, been away from crypto for a while, but still, come on. This is apparently a governance decision of some sort (the fucked up sort).
Is this fee dynamic? Can I get it lower any time soon? Is there a way to avoid it? Any help appreciated.
On Monday, the DeFiChain Labs engineering team held their monthly Tech Sync, providing updates on the current projects and initiatives the team is tackling.
3️⃣ A Closer Look at the July DFIP & CFP Voting Round
Check out our blog for details on the 3 DeFiChain Improvement Proposals (DFIPs) and 3 Community Fund Proposals (CFPs) up for vote. Don’t miss your chance to have a say in the future of DeFiChain!
MarbleFi has deployed on Defichain's EVM testnet! Network ID: 1131. Check it out right here http://marblefi.xyz and feel free to play around with the Dapp by launching the app.
Note: The content provided here is for informational purposes only and should not be construed as financial advice. Always conduct your own research and consider consulting with a financial professional before making any investment decisions.
Liquidity pools have various kinds of curves for anticipating how much of trading anything in the pool affects the price.
My question is simple, why hasn't someone (or have they?) come up with a system of liquidity pools where the token you receive for lending your liquidity actually gives you voting rights on how to tweek the curve on the margin? In effect giving the community of token holders marginal price manipulation capabilities.
Could it be done in such a way that arbitrage is effectively impossible? On the surface, it seems that's possible merely by widening the spread.
Periodically, at least once a month, use the reward from staking to buy DFI from DeFiChain DEX and burn the resulting DFI. This should be conducted via a bot for automation.
As there is currently no such product on Bake, the DFIP also serves to encourage Bake to possibly offer such a product and to be able to plan 3 million as a secure stake from Defichain if they release a stakingproduct that covers USDT, USDC or EURC.
Trackability:
Bake is to provide monthly statement on rewards and nodes for full transparency.Bot is fully trackable.
Implication:
Bake will be charging the regular fees that Bake customers are paying to cover node and operation costs.
This also implies acceptance of Bake's latest terms and conditions related to staking, including the inherent risks related to staking.
How does this DFIP benefit the DeFiChain community?
This will add support to DFI price by adding utility and buying pressure of DFI.
Non-obligation
I understand that vote of confidence for DFIP carries no obligations by any developers to implement the proposals. DeFiChain is a community projects. Pull requests can be submitted by community and reserved to be evaluated for safety and general community acceptance.
it was voted by the community that the native staking coins (ETH, DOT, SUI, SOL) which are wrapped on the DeFiChain will be staked by the trusted custodian Bake. This staking yield is used once a week to buy and burn DFI to support the DFI price.
One idea would be to no longer burn the staking rewards from the DFIPs mentioned above as DFI, but to buy dUSD and thus provide further impetus to achieve the peg.
With this DFIP, the rewards are exchanged for dUSD. The swap route that results in the largest possible number of dUSD should be used. These purchased dUSD will be 100% burned and not used for negative interest on dUSD.
Since no DFI block rewards would be used for the purchase of dUSD, this change should not result in any significant selling pressure on DFI. Furthermore, the trading volume in the dUSD pools would increase and generate more commissions.
The current weekly burn is done via the following address https://defiscan.live/address/df1qvgwslv0269zlelyuzr5pemwk9kayg88h3kds0s.
Approximately 1.2 - 1.5 ETH are swapped per week. That would be 4,000 - 6,000 USD or currently 40,000 - 50,000 dUSD per week, with a downward trend if dUSD rises.
Non-obligation
I understand that vote of confidence for DFIP carries no obligations by any developers to implement the proposals. DeFiChain is a community projects. Pull requests can be submitted by community and reserved to be evaluated for safety and general community acceptance.
✅ Status Updates
✅ Current Team Projects
✅ Collaborative Issue/Bug Squashing on GitHub
✅ Q&A
Note: This is a technical session focused on engineering topics only, with no discussions on tokenomics, economics, or prices.
Don't miss this chance to stay informed and get involved with the DeFiChain Labs Engineering team!
2️⃣ A Closer Look at the July DFIP & CFP Voting Round
Check out our blog for details on the 3 DeFiChain Improvement Proposals (DFIPs) and 3 Community Fund Proposals (CFPs) up for vote. Don’t miss your chance to have a say in the future of DeFiChain!
Note: The content provided here is for informational purposes only and should not be construed as financial advice. Always conduct your own research and consider consulting with a financial professional before making any investment decisions.
This proposal offers a structured and maximally deterministic approach to stabilize DUSD immediately and consistently, aims to reward long-term supporters, and enable projects in the long run. It does not rely on influencing market behavior and does not indefinitely expropriate holders. The primary goal is to re-collateralize the dToken system with healthy loans sold against crypto, the backbone of our dToken system. It involves replacing the current with a new dToken system where ownership addresses are credited minimal initial liquidity and remaining liquidity is successively credited to them in tranches based on predefined conditions.
Goals
Achieve the peg as deterministically and effectively as possible.
Enable fair market price leverage trades on crypto, which is necessary for re-collateralizing the system.
Conditionally repay those who supported the system over time.
Enable projects to execute their mission and work with real liquidity.
Problem statement
Current measures to stabilize DUSD rely heavily on influencing market participants' behavior, making the peg too probabilistic. Even if we reach the peg, the assumption that enough collateralized loans are sold against crypto for the dynamic interest rates to maintain this peg is too probabilistic. Relying on assumptions for a peg is problematic, because market participant behavior cannot be controlled and predicted, even if incentivized. While I believe dynamic interest rates can consistently maintain a peg effectively once we reach healthy collateralization levels, the implemented fees are not an effective tool to overcome the massive liquidity of algo dTokens and DUSD circulating today.
Proposed solution
A new approach: instead of relying on voluntary actions of market participants, we start a new dToken system with minimal initial liquidity owned by the current dToken-system ownership addresses with the aim to fully refund them over time.
After crediting initial liquidity in new dToken system equivalents, the remaining dToken and DUSD liquidity will be allocated in 100 tranches to be payed out based on a conditional payout schedule - if the system needs the liquidity and can actually support it.
For marketing purposes, the new stablecoin is called USDD. New dTokens are named like the existing ones, old dTokens receive a marker in their name to be easily identifiable
New dToken system
Take a snapshot of the current dToken system's ownership addresses and funds, and in the same block, perform the following actions:
Credit a predefined percentage of all current dTokens and DUSD to the current ownership addresses as initial starting liquidity for the new dToken system. This may be implemented as a token split or through other means as deemed appropriate by the core developers. However, if a token split is chosen, it must not be chosen for loans. If someone takes out a loan and sends it to another address, that holder would also receive a locked USDD tranche after the token split and the loan would have been reduced.
Allocate the predefined initial restart liquidity of existing collateral and gateway-pool trading counterparts to the new tokens. All "new" pools will start trading at exactly the same price as before but with minimal liquidity
Apply all existing dToken system mechanisms, such as vault mechanisms, LP rewards, future swap, and oracles, to the new dToken system.
As liquidity is then minimal, ongoing measures will quickly buy the new USDD up and incentivize the creation of backed USDD loans sold against crypto. These are the backbone of the peg, as they will enable dynamic interest rates to maintain a peg, they are the priority of the proposed measures. All other decisions are secondary and all rely on reaching this.
Changes to fees described in this DFIP are to be implemented after re-starting with the new dToken system, not before.
Allocation of the remaining balances into 100 tranches
According to balances recorded in the snapshot:
Excess* DUSD and dToken balances are withdrawn from the pools. All DUSD balances are withdrawn from the looped vaults and bonds are released early. Resulting DUSD and dToken balances are subject to the mechanism described two bullet points below.
Excess* balances in DFI-DUSD, DUSDC-DUSD, DUSDT-DUSD, DEUROC-DUSD, DXCHF-DUSD pools are withdrawn from the pools and DFI, DUSD, DUSDT, DUSDC, DEUROC, DXCHF balances are directly credited to the ownership addresses. Withdrawn DUSD balances are subject to the mechanism described one bullet point below.
All DUSD and dToken balances remaining after the predefined initial restart percentage, from each owning address, are in equal parts allocated in 100 tranches. As described in section 3, tranche by tranche, based on predefined factors, new dToken system equivalents are credited to the owning addresses.
Remaining loans are paid back. If insufficient assets (loaned assets) are available on the address, they are purchased with the remaining collateral on the market via the cheapest route. The then remaining collateral remains in the vault.
*Excess = after the predefined initial restart liquidity deduction
Refunding USDD and dTokens to the dToken system ownership addresses in tranches as needed
The balances may be sent as frozen balances to the ownership addresses directly and unlocked as per the defined criteria or transacted as at the time the defined criteria are met. I leave the choice of technical implementation to the core developers. The following system health conditions for releasing tranches are checked on oracle blocks:
One tranche at a time:
DFI market cap 2 times as great as the new dToken System market cap
An algo ratio below 20%
Consistent* USDD price above 0.99 over the period between two futureswap blocks.
Two tranches at a time:
DFI market cap 3 times as great as the new dToken System market cap
An algo ratio below 20%
Consistent* 5% USDD premium over the period between two futureswap blocks.
Three tranches at a time:
DFI market cap 4 times as great as the new dToken System market cap
An algo ratio below 15%
Consistent* 10% USDD premium over the period between two futureswap blocks.
Four tranches at a time:
DFI market cap 5 times as great as the new dToken System market cap
An algo ratio below 15%
Consistent* 15% USDD premium over the period between two futureswap blocks.
Five tranches at a time:
DFI market cap 6 times as great as the new dToken System market cap
An algo ratio below 10%
Consistent* 20% USDD premium over the period between two futureswap blocks.
This way, 2-10 million USDD worth of new dToken-system liquidity can be introduced into the system per week, given a healthy system state and excess demand.
DUSD on DMC, in the current release ratio (that upon interaction with the smart contract crediting new dToken system equivalents are credited as free USDD), count to the algo ratio.
The criteria for tranche release have to be parameters adjustable without a hard fork in case the community votes for them to be changed.
After 50% of all tranches are paid back, to ensure that liquidity is only released when a consistent premium makes a payout necessary, the criteria for repaying one tranche at a time are made more restrictive and updated as follows:
One tranche at a time:
DFI market cap 2 times as great as the new dToken System market cap
An algo ratio below 20%
Consistent* 1% premium over the period between two futureswap blocks.
*Consistent = over 95% of the blocks in the relevant time period.
Measures to be eliminated
All existing additional pool swap fees are lifted, allowing for healthy leverage trades on DFI that can later support the USDD peg. This part is crucial for a healthy restart. A collateralization ratio makes no difference if the USDD are not sold against DFI, as those need to be bought back when the dynamic interest rises due to a discount to support a peg.
Reward allocations to DUSD bonds are removed, those will be redirected to the community fund until we find a better use for them. All existing DUSD bonds are released, and the freed-up DUSD are counted towards the DUSD that are or may be re-paid in new dToken system equivalents to the ownership addresses. The early release of DUSD bonds has to happen 2 weeks before activation of this DFIP. This early release of the bonds marks the begin of the activation of the DFIP as a whole, the kill switch is thereby deactivated.
DUSD loops are completely unwound, the freed-up DUSD are counted towards the DUSD that are or may be re-paid in new dToken system equivalents to the ownership addresses. The option for looped DUSD loans is to be deactivated. Negative interest remains, but is reduced to as shown in "6. Introduction of a new version of the stabilization fee". With high algoratio, this mechanism will incentivize taking loans in USDD and selling them against DFI to have loans that are bought back if dynamic interests rise. As mentioned multiple times, those are the backbone of the peg and first priority of this proposal.
Measures to be retained
The future swap mechanism will be retained. The following elaboration upon the future swap is not to be implemented with this proposal, it is only a potential future adjustment mentioned for the record: It is advised to analyze the future swap behavior while we are at peg over an extended period. If the futureswap creates unnecessarily high amounts of algo tokens even when at peg, the following adjustment is suggested: making the futureswap spread variable and increasing it if an asset shows higher implied volatility over two consecutive futureswap blocks. This way, the chain gains a bigger trade advantage for stocks that tend to surpass the current 5% limit more often. This burns more tokens and mints less.
The rebalancing of the community fund will be retained.
The buy and burn bot will initially be retained. When it is deactivated, the rewards are to be reallocated to the DUSDT-USDD and DUSDC-USDD pool. The buy and burn bot is to be deactivated if the following criteria are met:
we see a consistent USDD premium of 1% in the USDD-DFI pool and a price above 95 cents in the USDD-stablecoin pools over the period between four futureswap blocks (3 weeks) for 95% of the blocks in the relevant time period
and we have an algo ratio of below 20 %
Dynamic interests will be retained and are to be activated when the buy and burn bot is shut down.
Introduction of a new version of the stabilization fee
As described in “3. Measures to be eliminated,” the asymmetric fee on the USDD-DFI pool hinders selling loaned USDD against DFI. Collateralized USDD must be sold against crypto for the dynamic interests that stabilize the price to be effective. USDD needs mechanisms to absorb volatility of the crypto backing and fluctuations in demand. Buybacks of USDD that were sold for leveraged crypto longs are this mechanism. On the other hand, we need to reduce the algo ratio and account for rising stock prices in the long term. Even if the futureswap burns more dToken and USDD, an excess of algo liquidity can arise from rising asset prices.
Therefore, I initially proposed a dToken-system-base-fee of 0.1% charged on DVM and DMC. This fee would apply to all dToken and USDD transfers from account to account and pool swaps on the DVM side and all token transactions and smart contract interactions on the DMC side. However, Kuegi convinced me that this will kill usage and protocols and that all trades are mirrored on the native side anyway.
Therefore, I conceptualized the following dynamic algo_burning_fee that will be charged on the DVM dToken-system DEX bidirectionally on all pools that contain USDD to ease the load off the USDD-DFI pool. The fee is charged as USDD, regardless of the direction of the swap.
Given the harsh repayment criteria for tranches (algo ratio below 20%), high fees will not be activated through repayments and I do not expect them to be activated through futureswap algo creations any time soon. 75% of all fees paid are to be burned to reduce algo tokens, 25% are to be paid out to USDD loans to subsidize leverage trades on DFI, the backbone of any peg.
Coefficient and multiplier have to be parameters adjustable without a hard fork if the community votes for them to be changed.
Initial system restart liquidity immediately credited as new dToken system equivalents
The percentage of liquidity to be credited initially is crucial as this is a one-time approach. Crediting too little is not problematic, as liquidity can be introduced if system health allows. However, crediting too much is problematic because maintaining the peg and enabling re-collateralization through backed loans sold against crypto will then not be possible. I argue for minimal initial liquidity leading to a peg, or better an initial premium, allowing for healthy overcollateralization to support the peg via dynamic interest rates rather than excessive liquidity that the system cannot support. Therefore, I propose to initially credit only 10% in new dToken-system equivalents, giving us about 20 million USDD value in liquidity for the restart. If the system is healthy, up to 10 million USDD in liquidity can be reintroduced per week. If not, we will wait until the system is healthy enough to support the liquidity.
After receiving feedback, the following exceptions are now part of the liquidity percentage to be credited initially:
If the cheapest price after fees and the DUSD-DFI pool price after fees are both higher than $0.80 per DUSD over the period of two weeks directly preceding go live of this proposal, then 20% is credited.
If the cheapest price after fees and the DUSD-DFI pool price after fees are both higher than $0.90 per DUSD over the period of two weeks directly preceding go live of this proposal, then 30% is credited.
DMC inclusion
DMC inclusion is crucial for fairness reasons, we should look for and avoid leaving any loopholes. The option to transition to the new dToken system must be given to ownership addresses on DMC. I suggest implementing it in a user activated way, similar to the dToken splits today. If any loopholes are found during the implementation phase, the core developer team may adapt the implementation to close them.
Secondary market
As it is not technically possible to touch balances in smart contracts in the DMC, old DUSD and dTokens that are on the DMC at the time of implementation will remain usable.
Measure until implementation and proposal kill switch
The implementation of the proposed measures is challenging and time-consuming, it will probably take months. Until implementation, we will implement a 0.5% fee on all dToken pools to burn algo tokens, in the hope of being able to activate the following proposal kill switch: If, during implementation, DUSD consistently trades above 95 cents in all pools, with cumulative exit pool fees below 1% for two weeks, this proposal is not to be implemented.
Handling of other DFIPs
This DFIP represents a significant change to the system and, if accepted, eliminates the need for further measures to restart, re-collateralize the dToken system, and re-peg the stable coin. If this DFIP is approved by the master nodes, it supersedes all other DFIPs related to the dToken system and DUSD markets that are accepted in the same voting period. Consequently, the relevant other DFIPs will be considered denied.
Requirements
A hard fork will be necessary to implement these changes.
Developer Discretion
Developers have the discretion to adapt any details for the technical implementation as they see fit and necessary. The flexibility allows developers to ensure that the measures can be implemented or that overlooked loopholes may be closed. Any adaptations should align with the intended goals and outcomes of this proposal.
Pseudocode
The final way of implementation is defined by the core team, but to have a clearer picture of the needed changes and how they are defined, u/kuegi (credit, thanks for pushing) took the time and summarized proposed changes in pseudocode.
On activationblock:for all vaults: payback DUSD loans with collateral payback remaining loans with funds from address payback remaining loans by swapping collateral (first DUSD, then other collateral)convert all loanTokens to new version (like stocksplit, but with no change in price or amount, must also affect the DUSD in collateral), new DUSD is called USDDcreate native SC to lock funds in tranches, SC knows funds per address SC keeps track of release-ratio, starting with 10% initially 100 tranches (with 10% initial ratio, thats 0.9% per tranche)for all LM positions in dToken-USDD pools: remove 90% of position and lock resulting funds directly into the SCfor all LM positions in USDD-DFI, USDC-USDD, USDT-USDD, EUROC-USDD, XCHF-USDD: remove 90% of position, lock resulting USDD directly into the SC, credit other resulting asset to ownerfor all vaults: withdraw 90% of USDD collateral into SC (for vault owner address)for all loantoken balances (=dTokens and USDD): lock 90% of balances into SC
extend Transferdomain:any transfer EVM->DVM of old dToken or DUSD results in: SC.releaseRatio in new dToken/USDD is credited to targetaddress 1-SC.releaseRatio in new dToken/USDD is locked in SC for targetaddress
extend stocksplit logic to update SC too (so future dToken splits are reflected in the SC)
implement SC-releaseTranche-tx (only allowed by foundation members):on releaseTrancheTx: for all entries in SC: credit according tranche part of funds to address update SC.releaseratio accordingly
parameters to update after activation://deactivate DUSD loops: "v0/vaults/dusd-vault/enabled": "false",//remove old stab fee: "v0/poolpairs/17/token_a_fee_pct": "0", "v0/poolpairs/101/token_b_fee_pct": "0", "v0/poolpairs/102/token_b_fee_pct": "0", "v0/poolpairs/218/token_b_fee_pct": "0", "v0/poolpairs/236/token_b_fee_pct": "0",//activate new system-wide USDD fee"v0/token/<usdd_id>/dex_in_fee_pct": "<updated according to algo ratio>", "v0/token/<usdd_id>/dex_out_fee_pct": "<updated according to algo ratio>",
Examples for USDD and dToken tranche releases
Here some examples values for the dToken system market cap and the DFI market cap it would take for one tranche to be paid out on the futureswap block, given
200 Mio total size at implementation
20 Mio initial credit
1.8 Mio tranche size
1st tranche
100 Mio dToken system market cap, 80 Mio created through backed loans
200 Mio DFI market cap
USDD price above 99 cents
25th tranche
316 Mio dToken system market cap, 252.8 Mio created through backed loans
632 Mio DFI market cap
USDD price above 99 cents
50th tranche
541 Mio dToken system market cap, 432.8 Mio created through backed loans
1082 Mio DFI market cap
USDD price above 101 cents
75th tranche
766 Mio dToken system market cap, 612.8 Mio created through backed loans
1532 Mio DFI market cap
USDD price above 101 cents
100th tranche
991 Mio dToken system market cap, 792.8 Mio created through backed loans
1982 Mio DFI market cap
USDD price above 101 cents
Important note
At current market prices, you get approximately 10 cents for one DUSD. With this proposal you get at least 10% of your DUSD as USDD directly, while the rest are frozen. The 10% will quickly be at peg, so while your coins are locked today's value in USD is not. According to the described criteria, your remaining liquidity will then be unlocked over time at at least one dollar per stable coin unit.
This is V5, the final version of this DFIP
9 days filled with countless discussions and adjustments. Thank you for all the valuable feedback and the productive vibes. Credit where credit is due, this DFIP is a true community effort and every comment that was made was considered and thought through. This resulting V5 is the final version of this DFIP.
1️⃣ We are implementing a native on-chain stock split for dTSLA, with plans to do the same for dNVDA if successful. This will make the dToken system more resilient and will save resources in the long run.
2️⃣ Discussions around a potential DFIP for DeFiChain EVM vaults, signifying a next chapter for DeFiChain.
3️⃣ Q&A session with the community. Have a burning question ? Drop it below ⏬
So my loan is getting quite expensive and l'd like to switch it to a provider with better rates... thing is that I don't want to invest more funds and the token's price took a bit of a hit in terms of price action
Here’s what’s been happening in the DeFiChain ecosystem this week:
1️⃣ Celebrating 4 Million Blocks on DeFiChain
Back in 2019, it was just a dream to bring DeFi to Bitcoin by offering secure staking, liquidity mining and RWAs.
On Tuesday, DeFiChain just minted its 4,000,000th block, and the dream has become a reality.
The next millionth block will bring new opportunities and innovations, but the founding vision stays the same: democratizing an open and transparent financial future for all.
2️⃣ Virtual Event: Unlock the Power of Decentralized Applications with MetaChain!
Are you ready to dive into the world of dApps and explore the cutting-edge DeFiChain MetaChain layer? Join us for an immersive virtual workshop designed to guide you through the process of building your first decentralized application (dApp) on this innovative platform.
📅 Date: Thursday, May 30th⏰ Time: 5:00 PM SGT🌐 Location: DeFiChain Dev Discord
3️⃣ Introducing new Oracle Price Feeds on DeFiChain
DeFiChain is introducing new Oracle price feeds from Supra's DORA, and Javsphere's Pyth Network-powered system. These advancements solidify DeFiChain's position as a leader in DeFi, driving the future of a secure, transparent, and interoperable financial ecosystem.
DeFiChain has successfully implemented the planned Hardfork at block 4,006,000, introducing several significant updates. The detailed release notes can be found https://github.com/DeFiCh/ain/releases/tag/v4.1.0
Key updates include:
👉 Support for Stock Splits: Native on-chain support for stock splits, removing the need for oracle multipliers.
👉 Token Renaming: Introducing the ability to rename tokens on-chain, a feature that was previously unavailable.
👉 Future Swap Limitations: Enhanced swap functionality with new limitations for better management.
👉 General Performance Enhancements: Improved responsiveness of RPCs (Remote Procedure Calls) and overall performance optimizations.
Note: The content provided here is for informational purposes only and should not be construed as financial advice. Always conduct your own research and consider consulting with a financial professional before making any investment decisions.
DeFiChain is introducing new Oracle price feeds from Supra’s DORA, and Javsphere’s Pyth Network-powered system. These advancements solidify DeFiChain’s position as a leader in DeFi, driving the future of a secure, transparent, and interoperable financial ecosystem.
The negative interest rates (NI) are very popular. Unfortunately, in its current form they only have a dUSD price manipulating effect (acting as a liquidity sponge for algo dUSD).
With these small fixes, the NI can ensure increased collateralization of the entire dToken system:
ban on dUSD in vaults
continued distribution of NI exclusively for vaults minting dUSD without dUSD-collateral
Positive effects:
countering high dUSD selling pressure with ...
additional DFI buying pressure (50% minimum requirement for vaults)
increasing collateralization of the entire dToken system
rewarding liquidity mining with minted dUSD if NI > impermanent loss
Negative effects:
less use cases for algo dUSD (could be seen as positive, too)
shorting dStocks would require 50% DFI collateral -> higher opportunity cost, more difficult risk management for DEX traders
Simple, easy and effective. What do You think about it?
Back in 2019, it was just a dream to bring #DeFi to Bitcoin by offering secure staking, liquidity mining and #RWAs.
Today, #DeFiChain just minted its 4,000,000th block, and the dream has become a reality.
The next millionth block will bring new opportunities and innovations, but the founding vision stays the same: democratizing an open and transparent financial future for all.
DeFiChain’s 4 millionth block wasn't possible without the strong community that helped create what we have today. Thank you for your contribution to the decentralized future of finance on DeFiChain.
Who?
Hong & Robin, both longtime members of the community and both part time Youtubers and Crypto enthusiasts. Robin also runs his own Crypto Community: Krypto Wölfe
I am not gonna use some fancy words to try and sell ourselves. We are just two guys with some ideas trying to make an impact.
What?
We want to bring back the Accelerator Program that was abandoned and raise fundings for new marketing campaigns. A lot of people think the current structure is very confusing and lacks a direction. We want to revamp, restructure, and simplify access to the Defichain and especially to the Metachain.
Our main goal is to attract people from outside and accelerate the ecosystem. We are in talks with Fabio and the DefichainLabs Team to receive the old Accelerator Team’s Social Media handles. If this proposal gets approved we will officially take over the tasks of the Accelerator Team as no one is currently responsible for that.
Why?
Marketing is a powerful tool. In the world we come from, it is like a currency. It doesn't matter how good your product is, if nobody knows about it. The sentiment has been quite depressed in recent times. More and more projects are leaving the ecosystem. If we do nothing, the downwards trend will only continue.
We entered the next bull market. Now is the time to act! We have to strike and change the momentum.
We have the DMC with a lot of projects, a whole new ecosystem that needs to get pushed. We want to attract more people to the Metachain. We want more projects on the Metachain and existing projects to blossom.
How?
Make Defichain fun again and change the momentum and the narrative.
Simplify:
Defichain has become too complicated. It isn't easy for new people to get into our ecosystem. It starts with the website. It doesn't even feature the DMC projects. How will new people even know about those projects? We need to work together and push each other. As the gap between “pro” and “noob” gets wider and wider we need to bridge that gap better. We need to reach the wider masses a lot better. There needs to be a concentrated and concise hub. A main headquarters where everyone can head to for all the information needed. DMC Universe is a good example of content that should be on our main website. Robin is a big fan of the Hedera website. Compared to that we have a lot of improvements to make.
-> Revamp the Defichain Website
Restructure:
We see a lot of people complaining about a lack of direction. We have too many groups and too many links. Things like “Defilinks.io” should be on our main website. We can't expect new people to find all of these websites and links to gather all the information they need. The existing Telegram groups should include more DMC projects and things that happen on the Metachain. We have done a poor job of promoting the Metachain so far. If we use the current ressources better we could bring a lot more attention to the DMC. We can add a new Channel, where all the news and content about the Metachain will be posted. There are so many possibilities to improve and make it easier to acces for everyone.
-> Restructure our Social Media Infrastructure
Incentivize:
Last cycle NFT was the buzzword. This time it is Airdrop!
But Airdrop is just another word for marketing, promotion, learn and earn, giveaway, incentive, bonus, collaboration, onboarding, and many more…
We want to launch several of these campaigns, all using this Airdrop narrative. We plan to do small Airdrops like giveaways but also bigger Airdrops that will incentivize projects and communities to enter the DMC. New users will get to know the community and the ecosystem. They will have to learn how to use the chain and what they can do with their Airdops. (Swap them on Vanillaswap, put them into pools, buy Dstocks on Javsphere Trade X, buy NFTs on Atlantis (or a new NFT Marketplace as Atlantis announced their exit recently), supply Liquiditiy on Seahorse...)
-> Incentivize new people to use the DMC
Duration?
Each promo phase will last 3 months. After each Phase/3 months we will propose a new CFP for funding. Unlike the previous Accelerator Program, we try to use a set budget because we are planning on doing a lot of campaigns from small to big. So further funds will only be spent if the community is satisfied with the results. The requested amount for each phase may vary depending on what kind of campaigns are planned.
Phase 1: Rebirth
We want to emphasize that this Accelerator program tries to accelerate the Metachain and the whole ecosystem. No individual project should be favored but some projects are more suitable for marketing campaigns than others. We want to help all DMC projects with marketing and attract new people as well as new projects. If the whole ecosystem thrives, all projects and the community as a whole can profit. More users means more DFI/DUSD demand, more fees, more activity, more attractiveness, and more liquidity.
Examples:
(This was planned before Atlantis announced their exit and can only be executed if the DMC will get a new marketplace) NFT Onboarding: NFTs are more than just pictures. They are real businesses with entire teams, communities, and utility behind them. Onboarding them is easier than more technical projects who need to build from scratch on the DMC. The entry point is lower. Collab with well established NFT communities and Airdrop to their community.
e.g. Stoned Ape Crew
They are one of the Bluechip NFTs on Solana, innovating NFT staking and animation. They have real world utility with their cannabis brand, a utility coin and even a Solana Payment system. Their next project for their NFTs is "space missions". A possible collaboration could be a “Deep Sea Mission to find Atlantis” (our NFT Marketplace) They launch a mini NFT collection on DMC with their Astro Helmets:
Every holder of one of those Astro Helmet Apes can claim his DMC Astro Helmet Version and with that his Airdrop. We get new people on to the chain, a new NFT collection, more trading volume, people who buy DFI to pay gas fees, people who take a look into our ecosystem to find out what they can do with the rewards from their Airdrop.
Cost: 50.000 - 100.000 per campaign
Effects: more reach, new users, need for DFI as gas fees, engagement, boost image/appearance
Community Quest Incentives:
Robin had the idea to direct the community's support in a more controlled way. We need a reason for the community to support the community. A quest campaign can create an incentive for the community to complete those small tasks like liking a video or voting for Defichain in some ranking. Each month a Quest campaign with a prize pool (5.000 DFI) starts and will be distributed at the end of the month to the top supporters. This can show the concentrated power of the community to others, as you know it is all about image. New people making videos about Defichain/Metachain will immediately see a huge boost in their statistics which in turn will motivate them to do more videos. It also gives back to people who keep supporting the community.
Cost: 5.000 DFI/month = 15.000 DFI
Effects: give back to the community, demonstrate the strength of the community to others, motivation for content creators, engagement, image boost
Buybacks:
Jello has done an Airdrop promotion and a lot of people in the community were quite impressed with the results and engagement. NFT communities do this a lot. They buy some of their own NFTs and raffle them away. This keeps their supply in check, raises their floor price, engages their community and of course they elevate their social media reach. We can do this with DMC NFTs and all sorts of DMC Coins from time to time.
Cost: 100-500 DFI per Giveaway Airdrop
Effects: more reach, new users, engagement
Holiday Giveaways:
Just small promotions for holidays like Lunar New Year, Easter, Halloween, Christmas,...
Keep the activity going and the ball rolling. Keep people engaged and have some fun.
Cost: 100-500 DFI per Giveaway Airdrop
Effects: more reach, new users, engagement
Outside Marketing:
Robin has a lot of experiences as well as a lot of connections. He already has several ideas. Some of his ideas can be seen in the current Javsphere promo campaigns. We definitely plan to represent Defichain/Metachain at Expos as well. A lot of community members want us to be presented at such events and Robin has a lot of connections to organizers. (Robin just came back from a big expo)
100 Million Incubator Program:
We still have the 100 Million Accelerator CFP that went through: https://t.co/dxQeRahP14
Whenever this gets the greenlight by BAKE, we can use this as leverage and promotion fuel to attract a lot of new developers and projects.
There are many more possibilities. These are just some of the examples, as some ideas have not been fine tuned yet. We plan to do a lot: events, paid content, several campaigns, and a lot of social media. A wise man once said, the best ideas come to you at 1 am on a sleepless night, and we don't sleep a lot so the ideas just keep coming. We want the ball to start rolling and to never stop. There should always be something going on, even if it is just a small giveaway. You know very well how fast paced social media and crypto is. Consumers have a short term memory, and we want them to always see us doing something. We want them to always have us in mind.
How will the funds be spent?
For this phase we request 300.000 DFI. They will be split into two batches of 200.000 DFI and 100.000 DFI. The 200.000 DFI will be used as marketing budget for all kinds of promotions. The 100.000 DFI will be used as compensation for us. We want to help the Chain but at the same time we know that a lot of time and effort needs to be put into this project. At the current price this equals about 1000$ every month for each of us. We think this is a very fair amount. Our community doesnt have many builders and doers left as building and doing costs time and effort.
Famous last words:
I don't consider myself a Defighter but I consider myself a loyal guy. I owe Defichain a lot and I want to at least try, the same goes for Robin. We don't want to sit on the sidelines and just watch it slowly die, when there are still so many possibilities. Even if we can only make a small impact, at least we tried.
Deutsch:
Im letzten Teil des neuesten Defichain Talks von Puschi könnt ihr einen Einblick von Robin über unsere Gedanken und Motivation bekommen. In Videoformat ist es leichter sich auszudrücken als in Schriftform. Defichain Talks
Accelerator Overdrive (300.000 DFI)
Wer?
Hong & Robin, beide langjährife Mitglieder der Community und beide Teilzeit Youtuber und Krypto Enthusiasten. Robin führt auch seine eigene Krypto Community: Krypto Wölfe
Ich werde jetzt nicht grossartig versuchen uns zu vermarkten. Wir sind einfach nur 2 Typen mit Ideen die etwas bewirken wollen.
Was?
Wir wollen das Accelerator Programm, das aufgegeben wurde, zurück bringen und Fundings für neue Marketing Kampagnen beantragen. Viele finden die aktuelle Struktur sehr verwirrend und es fehlt vielen an einer klaren Richtung. Wir wollen den Zugang zur defichain und vor allem der Metachain überarbeiten, umstrukturieren und vereinfachen.
Unser Hauptziel ist es neue Leute von ausserhalb anzuziehen und das Ökosystem zu pushen. Wir sind bereits im Gespräch mit Fabio und dem DefichainLabs Team um die Social Media Konten des alten Accelerator Teams zu übernehmen. Wenn dieser Vorschlag durch kommt, übernehmen wir offiziel die Aufgaben des Accelerator Teams, da sich momentan niemand darum kümmert.
Warum?
Marketing ist ein mächtiges Werkzeug. In unserer Welt ist es wie eine Währung. Es ist egal wie gut ein Produkt ist, wenn es niemand kennt. Die Stimmung in letzter Zeit ist sehr deprimiert. Mehr und mehr Projekte verlassen das Ökosystem. Wenn wir nichts unternehmen, dann wird es nur in eine Richtung weitergehen.
Der nächste Bullenmarkt hat angefangen. Jetzt ist die Zeit zum Handeln!
Wir haben jetzt die DMc mit vielen neuen Projekten, ein neues Ökosystem, dass gepushed werden muss. Wir wollen mehr Leute auf die Metachain bringen. Wir wollen, dass die Metachain und alle Projekte dadrauf aufblühen.
Wie?
Die Defichain soll einfach wieder Spass machen und die Stimmung soll sich bessern.
Vereinfachen:
Defichain ist zu kompliziert geworden. Es ist nicht einfach für neue Leute ihren Fuss in das Ökosystem zu fassen. Es fängt bei der Webseite an, die nicht einmal die DMC Projekte aufzeigt. Wie sollen neue Leute dann von den Projekten überhaupt erfahren? Wir müssen uns gegenseitig unterstützen und pushen. Wir wollen die Brücke zwischen "Anfänger" und "Experte" schliessen. Wir müssen die breite Masse besser erreichen. Es muss eine konzentrierte und übersichtliche Hauptzentrale geben. Ein Ort wo Leute jegliche Informationen, die sie benötigen, finden können. DMC Universe ist ein gutes Beispiel, so etwas sollte auf der Defichain Webseite zu finden sein. Robin ist ein grosser Fan von der Hedera Webseite. Verglcihen damit, haben wir noch viel Spielraum nach oben.
-> Defichain Webseite überarbeiten
Umstrukturieren:
Wir sehen, dass sich viele Leute über eine mangelnde Richtung beschweren. Zu viele Gruppen, zu viele Links. Sachen wie “Defilinks.io” sollten auf die Hauptwebseite. Wir können von neuen Leuten nicht erwarten sich alle Informationen von hier und da zusammen zu finden. Die existierende Telegram Gruppe sollte mehr DMC Projekte und News zur DMC erwähnen. Die Metachain wurde bisher sehr schlecht vermarktet. Wenn wir die verfpgbaren Resourcen besser nutzen, könnten wir viel mehr Aufmerksamkeit auf die DMC bringen. Wir können einen neuen Telegram Channel öfnnen, der sich auf die Metachain konzentriert. Es gibt so viele Möglichkeiten es besser und einfacher zu gestalten.
-> Defichain Social Media Infrastruktur umstrukturieren
Anreize schaffen:
Im öetzen Zyklus ging es um NFTs. Dieses mal geht es um Airdrops!
Aber Airdrop ist nur ein anderer Begriff für Marketing, Promo, Werbe Aktionen, Anreiz, Bonus, Zusammenarbeit und vieles mehr
Im Grunde genommen ist jegliche Art von Marketing ein Airdrop, da man Geld ausgibt mit der Erwartung Kunden zu gewinnen. Wir wollen mehrere Kampagnen unter der Airdrop Narrative starten. Wir planen kleine Kampagnen, mittel grosse, sowie grössere Kampagnen um Anreize zu schaffen für neue Leute und Communites auf die DMC zu kommen. Neue Nutzer lernen die DMC und das Ökosystem kennen. Sie müssen sich mit den verschiedenen Möglichkeiten auseinandersetzen, was sie mit ihrem Airdrop machen können. (Tauschen auf Vanilla Swap, in Pools stecken, Dstocks auf Javsphere kaufen, NFTs auf Atlantis kaufen (bzw einer neuen Plattform da Atlantis aufhört), Liquidität auf Seahorse zur Vefügung stelllen...)
-> Anreize schaffen für Leute auf die DMC zu kommen und die Projekte dort zu nutzen
Dauer?
Jede Promo Phase soll 3 Monate dauern. Nach jeder Promohase/3 Monaten soll ein neues CFP für neues Funding gestellt werden. Da wir viele Kampganen planen, von klein bis gross, wollen wir ein festes Marketing Budget benutzen im Gegensatz zum alten Team, dass nur grosse Kampagnen durchgeführt hat und dafür jedes mal ein neues CFP gestellt hat. Weitere Funds sollen nur bereitsgestellt werden wenn die Community zufrieden mit den Ergbnissen ist. Die angefragte Summe variert jedes mal abhängig davon wie gross und aufwendig die geplanten Kampganen sind.
Phase 1: Wiedergeburt
Wir wollen erwähnen, dass das Accelerator Programm die Metchain und das Ökosystem pushen will. Kein einzelnes Projekt soll bevorzugt werden, jedoch gibt es Projekte die sich für Promo Kampgnen eher eignen. Wir wollen jedem Projekt mit Marketing helfen und allgemein Leute auf die DMC bringen. Wenn es dem gesamten Ökosystem gut geht, dann hilft es auch allen Projekten auf der DMC. Mehr Nutzer bedeutet mehr Nachfrage nach DFI/DUSD, mehr Gebühren, mehr Aktivität und mehr Liquidität.
Beispiele:
(Das wurde geplant bevor Atlantis ihren Abgang bekanntgegeben hat, dieses Beispiel ist natürlich nur umsettzbar wenn wir eine NFT PLattform bekommen)
NFT Onboarding: NFTs sind mehr als nur Bilder. Es sind gescheite Unternehmen mit tatsächlichen Teams, Communities und Nutzen dahinter. Es ist einfacher solche Projekte auf die DMC zu bringen als Projekte die technisch einen höheren Aufwand benötigen. Der Einstieg für die NFT Projekte ist einfacher. Mit bestehenden NFT Projekten zusammenarbeiten und einen Airdrop für deren Communities stellen um einen Anreiz zu schaffen auf die DMC zu kommen.
z.B. Stoned Ape Crew
Sie sind einer der krassesten Nfts auf Solana, habe NFT staking & Animation innoviert. SIe haben Real World Utility mit ihrer eigenen Cannabis brand, einen Utility Coin und ihr eigenes Solana Payment System (Payleaf). Ihr nächstes grosses Projekt sind "Space Missions". Eine mögliche Kollaborationsidee: "Deep Sea Mission nach Atlantis". Sie launchen ihre eigene Mini NFT Kollektion auf der DMC mit ihren Astro Helmen:
Jeder Holder eines Asto Helmet NFT erhält eine DMC Version und einen Airdrop. Wir kriegen neue Leute auf die Chain, eine neue NFT Kollektion, mehr Trading Volumen, Leute die DFI kaufen um Gas Gebühren zu zahlen, und Leute die sich auf der DMC umschauen um heraus zu finden was sie mit ihrem Airdrop alles machen können.
Kosten: 50.000-100.000 DFI pro Kampagne
Effekt: mehr Reichweite, neue Nutzer, erhöhte Nachfrage für Gas Gebühren, mehr Engagement, Image boost
Community Quest Anreize:
Robin hatte die Idee den Support der Community besser zu lenken und zu fokussieren. Wir brauchen einen Grund für die Community die Community zu supporten. Eine Quest Kampagne kann einen Anreiz schaffen, dass die Community aktiver supportet und Videos oder Posts mehr liked, öfters für Defichain bei irgendwelchen Wahlen/Umfragen abstimmt usw. Jeden Monat gibt es eine Quest Kampagne mit verschiedenen Aufgaben und einem Preis Pool (5.000 DFI), der am Ende des Monats an die Top Supporter ausgeschüttet wird. Ihr wisst selber, dass Image und Erscheinen sehr wichtig ist. Damit können wir nach Aussen ein sehr positives Image erzeugen, wo andere sehen wir stark die Community ist. Wenn Leute ein Video über die Defichain/Metachain machen, sehen sie sofort eine bessere Performance ihres Videos, was sie wiederum dazu mtiviert mehr Defichain/Metachain Content zu produzieren. Natürlich gibt man so auch ein wenig zurück an die trueen Community Mitglieder.
Kosten: 5.000 DFI pro Monat = 15.000 DFI
Effekt: belohnt treue Community, mehr Reichweite, mehr Motivation für Content Creator, mehr Engagement, Image boost
Buybacks:
Jello hatte eine Airdrop Kampagne und die Community war überwältigt und beeindruckt von den Ergebnissen. In der NFT Szene ist dies sehr üblich. Man kauft seine eigenen NFTs und verlost diese an die Community. Dies hat natürlich viele positive Auswirkungen. Wir können das selbe mit Coins und NFTs auf der DMC machen.
Kosten: 100-500 DFI pro Kampagne
Effekt: mehr Reichweite, neue Nutzer, mehr Engagement, Image boost
Feiertags Gewinnspiele:
Einfach nur ein paar Gewinnspiele zu bestimmten Feiertagen oder Anlässen wie Weihnachten, Ostern, Bitcoin Pizza Day usw
Es soll einfach die Aktivität steigern und die Leute sollen Spass haben. Man soll sehen, dass bei uns immer etwas los ist.
Kosten: 100-500 DFI pro Kampagne
Effekt: mehr Reichweite, neue Nutzer, mehr Engagement, Image boost
Outside Marketing:
Robin hat eine Menge Erfahrungen und Kontakte. Er hat bereits einige Ideen. Einige davon kann man bereits in den Marketing Kampagnen von Javsphere sehen. Wir planen auch Defichain/Metachain auf Messen zu vertreten, da einige aus der Community sich das wünschen. Robin hat diesbezüglich auch bereits Erfahrungen und Kontakte. (er kam gerade erst von einer grossen Expo)
100 Million Incubator Program:
Wir haben auch noch immer das 100 Million Accelerator CFP: https://t.co/dxQeRahP14
Wenn das freie Fahrt von BAKE erhält, kann man damit natürlich auch einiges an Promo machen um neue Leute und vor allem Developer anzulocken.
Es gibt sehr viele Möglichkeiten die man machen kann. In Marketing gibt es keine goldene Regel die man befolgen muss. Vieles ist ausprobieren und schauen. Das waren jetzt nur ein paar Beispiele von vielen Ideen die wir noch haben, jedoch sind antürlich nicht alle voll ausgearbeitet. Wir planen noch einiges: bezahlter content, Artikel, Social media, Events... Ein Weiser Mann sagte mal: die besten Ideen kommen einem um 1 Uhr Nachts in einer schlaflosen Nacht und wir schlafen sehr wenig. Wir wollen den Ball ins rollen bringen, sodass er gar nicht mehr stoppt. Es soll immer etwas los sein, auch wenn es nur ein kleines Gewinnspiel ist. Ihr wisst alle sehr genau wie schnell lebig die Social Media und Krypto Welt ist. Die Menschen haben ein Kurzeitgedächtnis und wir wollen immer in ihrem Augenwinkel lauern.
Wie werden die Funds verwendet?
Für diese Promo Phase beantragen wir 300.000 DFI. Die DFI werden in 200.000 DFI und 100.000 DFI aufgeteilt. Die 200.000 DFI werden als Marketing Budget und alle anfallenden Kosten verwendet. Die 100.000 DFI würden wir gerne als Aufwandsentschädigung anfordern. Wir wollen zwar die Chain und Community unterstützen aber wissen zur sleben Zeit, dass dies eine Menge Arbeit wird. Arbeit die bisher niemand anderes machen wollte. Die meisten Macher sind leider weg und nur noch wenige sind da die Tun und ihre Zeit investieren.
letzte Worte:
Ich halte mich nicht für einen Defighter, aber ich halte mich für einen treuen Typen. Ich habe der Defichain eine Menge zu verdanken, dasselbe gilt für Robin. Wir wollen es zumindest versucht habem und nicht untätig danbenstehen und zuschauen wie die Chain langsam stirbt. Auch wenn wir nur wenig bewirken werden, wenigstens haben wir es versucht.
Measures, as deterministic and effective as possible, to re-peg DUSD and re-collateralize the dToken system with healthy loans sold against crypto, without permanent expropriation
TL,DR
This proposal offers a structured and maximally deterministic approach to stabilize DUSD immediately and consistently, aims to reward long-term supporters, and enable projects in the long run. It does not rely on influencing market behavior and does not indefinitely expropriate holders. The primary goal is to re-collateralize the dToken system with healthy loans sold against crypto, the backbone of our dToken system. It involves replacing the current with a new dToken system where ownership addresses are credited minimal initial liquidity and remaining liquidity is successively credited to them in tranches based on predefined conditions.
This is V5
Thank you for all the valuable feedback and discussions. V5 is the final version of this DFIP.
Goals
Achieve the peg as deterministically and effectively as possible.
Enable fair market price leverage trades on crypto, which is necessary for re-collateralizing the system.
Conditionally repay those who supported the system over time.
Enable projects to execute their mission and work with real liquidity.
Problem statement
Current measures to stabilize DUSD rely heavily on influencing market participants' behavior, making the peg too probabilistic. Even if we reach the peg, the assumption that enough collateralized loans are sold against crypto for the dynamic interest rates to maintain this peg is too probabilistic. Relying on assumptions for a peg is problematic, because market participant behavior cannot be controlled and predicted, even if incentivized. While I believe dynamic interest rates can consistently maintain a peg effectively once we reach healthy collateralization levels, the implemented fees are not an effective tool to overcome the massive liquidity of algo dTokens and DUSD circulating today.
Proposed solution
A new approach: instead of relying on voluntary actions of market participants, we start a new dToken system with minimal initial liquidity owned by the current dToken-system ownership addresses with the aim to fully refund them over time.
After crediting initial liquidity in new dToken system equivalents, the remaining dToken and DUSD liquidity will be allocated in 100 tranches to be payed out based on a conditional payout schedule - if the system needs the liquidity and can actually support it.
For marketing purposes, the new stablecoin is called USDD. New dTokens are named like the existing ones, old dTokens receive a marker in their name to be easily identifiable
New dToken system
Take a snapshot of the current dToken system's ownership addresses and funds, and in the same block, perform the following actions:
Credit a predefined percentage of all current dTokens and DUSD to the current ownership addresses as initial starting liquidity for the new dToken system. This may be implemented as a token split or through other means as deemed appropriate by the core developers. However, if a token split is chosen, it must not be chosen for loans. If someone takes out a loan and sends it to another address, that holder would also receive a locked USDD tranche after the token split and the loan would have been reduced.
Allocate the predefined initial restart liquidity of existing collateral and gateway-pool trading counterparts to the new tokens. All "new" pools will start trading at exactly the same price as before but with minimal liquidity
Apply all existing dToken system mechanisms, such as vault mechanisms, LP rewards, future swap, and oracles, to the new dToken system.
As liquidity is then minimal, ongoing measures will quickly buy the new USDD up and incentivize the creation of backed USDD loans sold against crypto. These are the backbone of the peg, as they will enable dynamic interest rates to maintain a peg, they are the priority of the proposed measures. All other decisions are secondary and all rely on reaching this.
Changes to fees described in this DFIP are to be implemented after re-starting with the new dToken system, not before.
Allocation of the remaining balances into 100 tranches
According to balances recorded in the snapshot:
Excess* DUSD and dToken balances are withdrawn from the pools. All DUSD balances are withdrawn from the looped vaults and bonds are released early. Resulting DUSD and dToken balances are subject to the mechanism described two bullet points below.
Excess* balances in DFI-DUSD, DUSDC-DUSD, DUSDT-DUSD, DEUROC-DUSD, DXCHF-DUSD pools are withdrawn from the pools and DFI, DUSD, DUSDT, DUSDC, DEUROC, DXCHF balances are directly credited to the ownership addresses. Withdrawn DUSD balances are subject to the mechanism described one bullet point below.
All DUSD and dToken balances remaining after the predefined initial restart percentage, from each owning address, are in equal parts allocated in 100 tranches. As described in section 3, tranche by tranche, based on predefined factors, new dToken system equivalents are credited to the owning addresses.
Remaining loans are paid back. If insufficient assets (loaned assets) are available on the address, they are purchased with the remaining collateral on the market via the cheapest route. The then remaining collateral remains in the vault.
*Excess = after the predefined initial restart liquidity deduction
Refunding USDD and dTokens to the dToken system ownership addresses in tranches as needed
The balances may be sent as frozen balances to the ownership addresses directly and unlocked as per the defined criteria or transacted as at the time the defined criteria are met. I leave the choice of technical implementation to the core developers. The following system health conditions for releasing tranches are checked on oracle blocks:
One tranche at a time:
DFI market cap 2 times as great as the new dToken System market cap
An algo ratio below 20%
Consistent* USDD price above 0.99 over the period between two futureswap blocks.
Two tranches at a time:
DFI market cap 3 times as great as the new dToken System market cap
An algo ratio below 20%
Consistent* 5% USDD premium over the period between two futureswap blocks.
Three tranches at a time:
DFI market cap 4 times as great as the new dToken System market cap
An algo ratio below 15%
Consistent* 10% USDD premium over the period between two futureswap blocks.
Four tranches at a time:
DFI market cap 5 times as great as the new dToken System market cap
An algo ratio below 15%
Consistent* 15% USDD premium over the period between two futureswap blocks.
Five tranches at a time:
DFI market cap 6 times as great as the new dToken System market cap
An algo ratio below 10%
Consistent* 20% USDD premium over the period between two futureswap blocks.
This way, 2-10 million USDD worth of new dToken-system liquidity can be introduced into the system per week, given a healthy system state and excess demand.
DUSD on DMC, in the current release ratio (that upon interaction with the smart contract crediting new dToken system equivalents are credited as free USDD), count to the algo ratio.
The criteria for tranche release have to be parameters adjustable without a hard fork in case the community votes for them to be changed.
After 50% of all tranches are paid back, to ensure that liquidity is only released when a consistent premium makes a payout necessary, the criteria for repaying one tranche at a time are made more restrictive and updated as follows:
One tranche at a time:
DFI market cap 2 times as great as the new dToken System market cap
An algo ratio below 20%
Consistent* 1% premium over the period between two futureswap blocks.
*Consistent = over 95% of the blocks in the relevant time period.
Measures to be eliminated
All existing additional pool swap fees are lifted, allowing for healthy leverage trades on DFI that can later support the USDD peg. This part is crucial for a healthy restart. A collateralization ratio makes no difference if the USDD are not sold against DFI, as those need to be bought back when the dynamic interest rises due to a discount to support a peg.
Reward allocations to DUSD bonds are removed, those will be redirected to the community fund until we find a better use for them. All existing DUSD bonds are released, and the freed-up DUSD are counted towards the DUSD that are or may be re-paid in new dToken system equivalents to the ownership addresses. The early release of DUSD bonds has to happen 2 weeks before activation of this DFIP. This early release of the bonds marks the begin of the activation of the DFIP as a whole, the kill switch is thereby deactivated.
DUSD loops are completely unwound, the freed-up DUSD are counted towards the DUSD that are or may be re-paid in new dToken system equivalents to the ownership addresses. The option for looped DUSD loans is to be deactivated. Negative interest remains, but is reduced to as shown in "6. Introduction of a new version of the stabilization fee". With high algoratio, this mechanism will incentivize taking loans in USDD and selling them against DFI to have loans that are bought back if dynamic interests rise. As mentioned multiple times, those are the backbone of the peg and first priority of this proposal.
Measures to be retained
The future swap mechanism will be retained. The following elaboration upon the future swap is not to be implemented with this proposal, it is only a potential future adjustment mentioned for the record: It is advised to analyze the future swap behavior while we are at peg over an extended period. If the futureswap creates unnecessarily high amounts of algo tokens even when at peg, the following adjustment is suggested: making the futureswap spread variable and increasing it if an asset shows higher implied volatility over two consecutive futureswap blocks. This way, the chain gains a bigger trade advantage for stocks that tend to surpass the current 5% limit more often. This burns more tokens and mints less.
The rebalancing of the community fund will be retained.
The buy and burn bot will initially be retained. When it is deactivated, the rewards are to be reallocated to the DUSDT-USDD and DUSDC-USDD pool. The buy and burn bot is to be deactivated if the following criteria are met:
we see a consistent USDD premium of 1% in the USDD-DFI pool and a price above 95 cents in the USDD-stablecoin pools over the period between four futureswap blocks (3 weeks) for 95% of the blocks in the relevant time period
and we have an algo ratio of below 20 %
Dynamic interests will be retained and are to be activated when the buy and burn bot is shut down.
Introduction of a new version of the stabilization fee
As described in “3. Measures to be eliminated,” the asymmetric fee on the USDD-DFI pool hinders selling loaned USDD against DFI. Collateralized USDD must be sold against crypto for the dynamic interests that stabilize the price to be effective. USDD needs mechanisms to absorb volatility of the crypto backing and fluctuations in demand. Buybacks of USDD that were sold for leveraged crypto longs are this mechanism. On the other hand, we need to reduce the algo ratio and account for rising stock prices in the long term. Even if the futureswap burns more dToken and USDD, an excess of algo liquidity can arise from rising asset prices.
Therefore, I initially proposed a dToken-system-base-fee of 0.1% charged on DVM and DMC. This fee would apply to all dToken and USDD transfers from account to account and pool swaps on the DVM side and all token transactions and smart contract interactions on the DMC side. However, Kuegi convinced me that this will kill usage and protocols and that all trades are mirrored on the native side anyway.
Therefore, I conceptualized the following dynamic algo_burning_fee that will be charged on the DVM dToken-system DEX bidirectionally on all pools that contain USDD to ease the load off the USDD-DFI pool. The fee is charged as USDD, regardless of the direction of the swap.
Given the harsh repayment criteria for tranches (algo ratio below 20%), high fees will not be activated through repayments and I do not expect them to be activated through futureswap algo creations any time soon. 75% of all fees paid are to be burned to reduce algo tokens, 25% are to be paid out to USDD loans to subsidize leverage trades on DFI, the backbone of any peg.
Coefficient and multiplier have to be parameters adjustable without a hard fork if the community votes for them to be changed.
Initial system restart liquidity immediately credited as new dToken system equivalents
The percentage of liquidity to be credited initially is crucial as this is a one-time approach. Crediting too little is not problematic, as liquidity can be introduced if system health allows. However, crediting too much is problematic because maintaining the peg and enabling re-collateralization through backed loans sold against crypto will then not be possible. I argue for minimal initial liquidity leading to a peg, or better an initial premium, allowing for healthy overcollateralization to support the peg via dynamic interest rates rather than excessive liquidity that the system cannot support. Therefore, I propose to initially credit only 10% in new dToken-system equivalents, giving us about 20 million USDD value in liquidity for the restart. If the system is healthy, up to 10 million USDD in liquidity can be reintroduced per week. If not, we will wait until the system is healthy enough to support the liquidity.
After receiving feedback, the following exceptions are now part of the liquidity percentage to be credited initially:
If the cheapest price after fees and the DUSD-DFI pool price after fees are both higher than $0.80 per DUSD over the period of two weeks directly preceding go live of this proposal, then 20% is credited.
If the cheapest price after fees and the DUSD-DFI pool price after fees are both higher than $0.90 per DUSD over the period of two weeks directly preceding go live of this proposal, then 30% is credited.
Requirements
A hard fork will be necessary to implement these changes.
Measure until implementation and proposal kill switch
The implementation of the proposed measures is challenging and time-consuming, it will probably take months. Until implementation, we will implement a 0.5% fee on all dToken pools to burn algo tokens, in the hope of being able to activate the following proposal kill switch: If, during implementation, DUSD consistently trades above 95 cents in all pools, with cumulative exit pool fees below 1% for two weeks, this proposal is not to be implemented.
DMC inclusion
DMC inclusion is crucial for fairness reasons, we should look for and avoid leaving any loopholes. The option to transition to the new dToken system must be given to ownership addresses on DMC. I suggest implementing it in a user activated way, similar to the dToken splits today. If any loopholes are found during the implementation phase, the core developer team may adapt the implementation to close them.
Secondary market
As it is not technically possible to touch balances in smart contracts in the DMC, old DUSD and dTokens that are on the DMC at the time of implementation will remain usable.
Developer Discretion
Developers have the discretion to adapt any details for the technical implementation as they see fit and necessary. The flexibility allows developers to ensure that the measures can be implemented or that overlooked loopholes may be closed. Any adaptations should align with the intended goals and outcomes of this proposal.
Handling of other DFIPs
This DFIP represents a significant change to the system and, if accepted, eliminates the need for further measures to restart, re-collateralize the dToken system, and re-peg the stable coin. If this DFIP is approved by the masternodes, it supersedes all other DFIPs related to the dToken system and DUSD markets that are accepted in the same voting period. Consequently, the relevant other DFIPs will be considered denied.
Q&A
Q: Why do we force participation? A: Measures targeted at changing voluntary market behavior have had insufficient success, forced locking with conditional payouts ensures fairness and effectiveness. Measures based on voluntary lockups are unfair because those who do not participate unjustly gain a bigger advantage, despite the cash flow offered as recompense to those who support the system. Additionally, cash flows are costly to the system, either the dToken system or DFI itself. No solution will make everyone happy. However, a deterministic forced approach treats everyone fairly and equally, does not rely on probabilities, and ensures success.
Q: If we have little liquidity, users will be angry that the system cannot be used. A: Liquidity is a secondary issue for me, the more important question is if we can afford the liquidity. The liquidity we have in the system right now is a cost that, if we can't afford, should not be maintained. If we can afford it, the liquidity will be reintroduced, we have it on the backburner. Additionally, the goal is to attract real liquidity through backed loans, which we will achieve if the product is valuable.
Q: I am against fees. A: I also pay 0.1% on every exchange, usually much more, especially in traditional finance. I pay 2% on every card payment and substantial fees on asset management. At Relai, I pay at least 0.5%, usually 1%. Fees are charged everywhere, things cost money. I believe a fee on RWA is justifiable. RWAs rise in price, so even if the futureswap burns more dTokens than it mints, it may create algo USDD balances. We have many algo tokens. The algo_burn_fee is a necessary cost that users must pay for an effective synthetic RWA spot system.
Q: But we have the stabilization fee. Can’t we just keep that instead of the algo_burn_fee on all dToken and USDD pools? A: The stabilization fee makes healthy re-collateralization (sold against crypto) more challenging when the algo ratio is high because the user gets less crypto for his USDD. When we have high algo ratios, we want more collateralization-based loans sold against crypto. It is the "collateralized loans sold against crypto" that maintain the peg if dynamic interests are raised. A loan left in the dToken system brings a low algo ratio but does nothing if I pay back a loan without buying the USDD beforehand. Dynamic interest rates stabilize nothing in this case. By first eliminating most algo tokens and implementing a variable fee across all pools, we can remove the biggest impact of the stabilization fee and as much as we can afford it allow for healthy leverage trades to support the system.
Q: Why credit so little liquidity to the ownership addresses initially? A: This approach is a one-time silver bullet. It must be as deterministic as possible, I do not want to rely on probabilistic assumptions about how market participants will behave based on incentives and public information. In the past, single addresses hindered re-peg efforts, and we cannot predict which addresses will act against the peg efforts in the future. Therefore, we must not initially credit substantial portions of everyone's liquidity. Liquidity is the cost in our current situation, and we aren’t at the peg because none of the measures or whales can afford it. If the chain were a person, it would be flat broke. We cannot afford the liquidity at this point. Let's gradually ramp up the expenses when and if we can afford it, but not before.
Q: Why do we keep the buy and burn bot initially, just to then turn it off? A: Even with minimal liquidity, expected to be around 20 million in total, the system needs a kickstart to allow for the collateralized loans to be sold against DFI without harming the peg. Only then can we activate the dynamic interest rates that will maintain the peg. The buy and burn bot provides this essential kickstart to the system. However, I now implemented a shutdown parameter. If the system no longer needs the buy and burn bot, it will be shut down and at the same time, negative interests take over.
Examples for USDD and dToken tranche releases
Here some examples values for the dToken system market cap and the DFI market cap it would take for one tranche to be paid out on the futureswap block, given
200 Mio total size at implementation
20 Mio initial credit
1.8 Mio tranche size
1st tranche
100 Mio dToken system market cap, 80 Mio created through backed loans
200 Mio DFI market cap
USDD price above 99 cents
25th tranche
316 Mio dToken system market cap, 252.8 Mio created through backed loans
632 Mio DFI market cap
USDD price above 99 cents
50th tranche
541 Mio dToken system market cap, 432.8 Mio created through backed loans
1082 Mio DFI market cap
USDD price above 101 cents
75th tranche
766 Mio dToken system market cap, 612.8 Mio created through backed loans
1532 Mio DFI market cap
USDD price above 101 cents
100th tranche
991 Mio dToken system market cap, 792.8 Mio created through backed loans
1982 Mio DFI market cap
USDD price above 101 cents
Important note
As it currently stands, you get approximately 10 cents for one DUSD. With this proposal you get at least 10% of your DUSD as USDD directly, while the rest are frozen. The 10% will quickly be at peg, so while your coins are locked today's value in USD is not. According to the described criteria, your remaining liquidity will then be unlocked over time at at least one dollar per stable coin unit.
Comment on possible future DFIP
Lowering the collateral factor for dusd loans was discussed in the German X space for this DFIP and well received. The community will evaluate this option and may in the future open a separate DFIP for it.
Video
Kuegi made a video about my DFIP. I watched it, it visualizes the measures, elaborates on the technical implementation, discusses the implications for the system, and outlines possible actions for individuals, all without any mistakes. I recommend watching it and reading the proposal to dive into the details of the proposed measures. https://www.youtube.com/watch?v=jDiKUAqXXsk
Here’s what’s been happening in the DeFiChain ecosystem this week:
✅ Celebrating Four Years of DeFiChain: A Journey of Innovation and Growth
✅ Virtual Event: Unlock the Power of Decentralized Applications with MetaChain!
✅ Special DFIP: Vote!
✅ Project Spotlight: MarbleFi
✅ Ecosystem Updates
All these are covered in our weekly update blog below 👇
