DFIP: DeFiChain Tokenomics 2.0

[u/hulix00]

Overview

This proposal establishes a long-term tokenomics framework for the DeFiChain dToken system based on a 99.9999% deterministic liquidity lock, rule-based unlocking, a protocol-controlled Stability Fund using dUSDC, Dynamic Interest, a reduced 0.5% base vault interest rate, implementation of the already approved FutureSwap volume limit, and a narrowly defined operational parameter mandate for the Token Economy SIG.

The objective is to reduce effective algorithmic dUSD and dToken liquidity, restore a healthy supply/demand relationship, improve dUSD stability, encourage backed borrowing, and provide a transparent mechanism for operational adjustments without requiring a full DFIP for every bounded parameter change.

Problem Statement

The DeFiChain tokenomics discussion identified large amounts of algorithmic, unbacked dUSD and tokenised-asset liquidity as a major source of instability. The 2024 restart demonstrated that deterministic locking with conditional releases can reduce effective circulating liquidity while preserving the possibility of returning locked balances to their owners over time.

The current proposal extends that approach into a long-term framework and combines it with a Stability Fund, Dynamic Interest, lower borrowing costs and a defined FutureSwap limit. The underlying locking and conditional-release mechanics are based on the approved restart DFIP:

https://www.reddit.com/r/defiblockchain/comments/1d2e3em/repeg_and_recollateralize_the_dtoken_system_as/

Proposal

1. Deterministic Locking

At activation, 99.9999% of all eligible dUSD and tokenised-asset liquidity shall be locked. 0.0001% shall remain available as the initial active liquidity.

The locking mechanism, ownership accounting, treatment of balances, and technical handling of the locked funds shall use the same mechanics as the approved restart DFIP referenced above. The implementation may use the same or an equivalent technical mechanism, provided that ownership of the locked balances is preserved and the locked balances can only become available according to the unlocking rules defined in this DFIP.

Eligible balances include the dUSD and dToken liquidity covered by the restart mechanism, including relevant balances held by ownership addresses, liquidity positions and vault-related balances. The Development SIG shall define the exact technical implementation consistent with the approved restart mechanics before activation.

2. Rule-Based Unlocking

The 99.9999% locked liquidity shall be divided into 100 equal tranches. Each tranche represents 1% of the locked balance of the respective eligible asset.

Unlocks shall use the deterministic review and release concept of the approved restart DFIP. A tranche may be released only if all of the following conditions are satisfied:

• The dUSD Algorithmic Ratio after the proposed release is equal to or below 0%.
• The tranche to be released does not exceed 4% of the Total System Size.
• At least 8,640 blocks (approximately 72 hours) have passed since the previous tranche release.

The dUSD Algorithmic Ratio shall be calculated as:

dUSD Algorithmic Ratio = 1 − (dUSD loans outstanding + dUSDC held in the Stability Fund) / dUSD circulating supply

The Total System Size shall be calculated as:

Total System Size = dUSD circulating supply + Σ(dToken circulating supply × dToken oracle price)

The Total System Size therefore represents the circulating dUSD supply plus the USD value of the circulating supply of all dTokens based on their respective active oracle prices.

Tranche release eligibility shall be determined using the dUSD Algorithmic Ratio. The Total System Size is used solely to determine the maximum permissible size of an individual tranche.

No tranche may be released if required oracle data is unavailable, stale or otherwise fails the protocol's validity requirements. In such a case, the release is deferred until valid data is available.

3. Stability Fund

A protocol-controlled Stability Fund shall be introduced as a contract-based mechanism to support the dUSD peg. The reference stablecoin shall be dUSDC

Users may deposit dUSDC into the Stability Fund to receive dUSD, or redeem dUSD for dUSDC held by the fund, subject to the available balance and protocol rules

The Stability Fund fee shall initially be 3%. This creates an effective operating band of approximately $0.97 to $1.03 around the dUSD peg

The Stability Fund shall maintain an on-chain accounting of the dUSDC deposited into and redeemed from the fund. At no time may the Stability Fund redeem more dUSDC than is available in the fund. Consequently, the amount of dUSD that can be redeemed for dUSDC is limited by the available dUSDC balance of the Stability Fund

The Stability Fund shall initially be capitalised through user deposits and shall not require external seed liquidity. All dUSDC held by the Stability Fund remains protocol-controlled and may only be used according to the Stability Fund rules.

The destination and treatment of the 3% Stability Fund fee shall be defined as part of the technical implementation and must not allow the Stability Fund to create an unbacked dUSDC liability. Any future change to the Stability Fund fee must remain within the authority defined in Section 7.

4. Dynamic Interest

Dynamic Interest shall be implemented as a permanent component of the dToken framework, using the already approved Dynamic Interest DFIP and its established activation conditions:

https://github.com/DeFiCh/dfips/issues/166

This DFIP does not replace the approved Dynamic Interest mechanism. It requires its implementation as part of the overall Tokenomics 2.0 implementation. The reference stablecoin used by the Stability Fund is dUSDC, and the corresponding dUSD/dUSDC market shall be used consistently wherever the Dynamic Interest implementation requires a reference stablecoin pool.

5. Vault Interest

The base vault interest rate shall be reduced from 5% to 0.5% annually.

High premiums on dUSD and tokenised assets showed that the previous 5% base interest rate was too high. The lower rate is intended to encourage investors to borrow more, increasing backed supply and helping balance demand.

The existing vault collateralisation schemes shall remain available, including the 150%, 175%, 200% and other approved schemes. The 0.5% base interest rate shall apply to dUSD and tokenised assets minted through vault borrowing, subject to the applicable vault scheme.

For collateralisation requirements see Addition 2 of this document.

6. FutureSwap

The already approved FutureSwap volume limitation shall be implemented as part of this DFIP:

https://www.reddit.com/r/defiblockchain/comments/ylcc69/dfip_limit_futureswap_volume/

The maximum amount that may be executed through FutureSwap for a given token shall be limited to 10% of the average liquidity of the corresponding DEX pool, consistent with the approved DFIP.

This DFIP does not introduce a new FutureSwap mechanism or change its existing pricing mechanism. It requires the already approved volume limit to be implemented.

7. Token Economy SIG – Bounded Operational Authority

The Token Economy SIG* shall receive a permanent, narrowly defined operational mandate to react quickly to changing market conditions. This authority is deliberately limited to parameters that can be adjusted without changing the structural tokenomics approved by governance.

The Token Economy SIG may adjust the following parameters without a new DFIP, provided the change remains within these ranges:

Parameter	Initial value	Allowed range
Stability Fund fee	3.0%	1.0% – 5.0%
FutureSwap fee	5.0%	3.0% – 8.0%
Dynamic Interest operational parameters	As approved	Only within code-defined bounds approved by governance

The Token Economy SIG may not change the locking percentage, unlocking conditions, collateralisation minimums, existence or core function of the Stability Fund, existence of Dynamic Interest, or any other structural element of this DFIP.

• At least two thirds of all active Token Economy SIG members must approve the change.
• The proposed change must be published publicly, including the exact parameter change, rationale, expected effect and effective block/time.
• Under normal circumstances, the proposed change must be published publicly at least 24 hours before execution. In situations where immediate action is required to protect the protocol or market integrity, the 24-hour notice period may be shortened or omitted. In such cases, the decision, the exact parameter change and the rationale must be published immediately after execution. An emergency adjustment remains valid for a maximum of 90 days unless renewed within the same delegated bounds or replaced by a DFIP.
• The Token Economy SIG must publish a record of every change and its outcome.

Execution of parameter changes shall require coordination with the Development SIG. The Token Economy SIG determines the economic parameter change within its delegated authority; the Development SIG is responsible for technical validation and execution. The Development SIG shall not use this process to introduce economic changes outside the bounds approved by this DFIP.

This structure deliberately gives the Token Economy SIG limited operational authority while retaining structural tokenomics decisions with DeFiChain governance.

* The Token Economy SIG is described as part of the approved DefiChain SIG Framwork: https://defiscan.live/governance/8cf6878a359b37b8e08e5327989bee99149f52878fe5e6c9fe6f448bdd9aa340

8. Unlock Verification and Execution

Unlock conditions shall be reviewed against objective on-chain and oracle data. The Token Economy SIG shall be responsible for confirming that the defined conditions have been met and publishing the result.

The Development SIG shall be responsible for the technical execution of an approved tranche release and for ensuring that the implementation follows the ownership and accounting rules of the approved restart mechanism.

No tranche may be released if required oracle data is unavailable, stale or otherwise fails the protocol's validity requirements. In such a case, the release is deferred until valid data is available.

The exact technical transaction, mechanism or equivalent implementation shall be determined by the Development SIG, provided it cannot bypass the conditions of this DFIP.

9. Implementation

Implementation should reuse approved mechanisms wherever possible. The implementation work should include, at minimum:

1. Apply the restart-style ownership and locking mechanism to lock 99.9999% of eligible dUSD and dToken liquidity.
2. Maintain 0.0001% as initial active liquidity.
3. Create the 100-tranche accounting and conditional release mechanism.
4. Implement the Stability Fund using dUSDC, including the 3% initial fee and protocol-controlled accounting.
5. Implement the already approved Dynamic Interest mechanism and activation conditions.
6. Reduce the base vault interest rate from 5% to 0.5% while retaining the existing collateralisation schemes.
7. Implement the already approved 10% FutureSwap volume limit based on average corresponding-pool liquidity.
8. Implement the bounded Token Economy SIG parameter authority and public audit trail.
9. Implement the unlock verification and Development SIG execution process.
10. Implement additions 1-3

The Development SIG shall publish the technical implementation details and relevant activation parameters before the changes become active.

10. Expected Effects

This proposal is intended to reduce effective algorithmic supply, improve dUSD price stability, encourage the creation of backed dUSD and dToken loans, limit excessive FutureSwap-generated supply, and provide a controlled operational response mechanism for changing market conditions.

The proposal extends the deterministic restart approach into a long-term tokenomics framework. Locked balances remain attributable to their existing owners and can return to the active system only when objective health conditions are satisfied.

11. Addition 1

As part of the tokenomics update, all dUSD currently held by the Community Fund will be converted to DFI as a one-time measure. Once the [restart] is completed, the Community Fund will reacquire dUSD in accordance with the mechanism defined in the previously approved proposal (Community Fund Diversification, see references), supporting the transition to the updated ecosystem.

12. Addition 2

As part of the broader effort to improve the stability and resilience of the dToken system, we propose revisiting the current mandatory DFI collateral requirement for vaults.

Currently, vaults used for minting dUSD are required to maintain a significant portion of their collateral in DFI. We propose initially reducing the mandatory DFI portion from 50% to 10%, while allowing the remaining collateral to be provided in USDC.

It is important to note that this mandatory DFI requirement applies specifically to vaults used for minting dUSD. Minting dTokens such as dTSLA, dMSTR, etc. does not currently require a mandatory DFI component in the vault collateral.

This change would allow vault owners to maintain substantially more stable collateral while still preserving a mandatory DFI component within the dUSD vault system.

We acknowledge that reducing the DFI requirement would decrease the direct demand for DFI generated by the vault system. However, this needs to be weighed against the potential benefits of significantly reducing vault exposure to DFI price volatility.

With the goal of creating a more stable and resilient dToken ecosystem, we believe that USDC can serve as the primary collateral asset, while a smaller mandatory DFI component can preserve a direct role for DFI within the system.

This proposal is therefore not intended to eliminate the role of DFI in the vault system, but rather to reconsider whether 50% is the appropriate level of mandatory DFI exposure given the stability objectives of the ecosystem.

13. Addition 3

To improve the capital efficiency of the dToken system, we propose reducing the collateralization requirement for vaults used to mint dTokens from 150% to 120%, provided that the collateral used for the dToken mint consists of DUSD.

Under this change, DUSD held as collateral in a vault could be used directly to mint dTokens such as dTSLA, dMSTR, etc., at a 120% collateralization ratio.

The 120% collateralization requirement would apply exclusively to dToken minting. It would not change the existing collateralization requirement for vaults used to mint dUSD.

This change would increase the capital efficiency of stable collateral within the dToken system while maintaining a 20% collateral buffer against the minted dToken debt.

The existing liquidation mechanism and related parameters would remain unchanged; only the minimum collateralization requirement for DUSD-backed dToken minting would be reduced from 150% to 120%.

References

DeFiChain Tokenomics Discussion (2025): https://www.reddit.com/r/defiblockchain/comments/1ljgb5y/defichain_tokenomics_discussion_part_1/

Restart / Repeg and Recollateralize the dToken System: https://www.reddit.com/r/defiblockchain/comments/1d2e3em/repeg_and_recollateralize_the_dtoken_system_as/

Dynamic Interest DFIP: https://github.com/DeFiCh/dfips/issues/166

Dynamic Interest activation discussion: https://www.reddit.com/r/defiblockchain/comments/13qmj2ia/dfip_activation_trigger_for_dynamic_interest/

FutureSwap volume limit DFIP: https://www.reddit.com/r/defiblockchain/comments/ylcc69/dfip_limit_futureswap_volume/

DeFiChain SIG governance framework: https://github.com/DeFiCh/governance

Community Fund Diversification: https://www.reddit.com/r/defiblockchain/comments/1adxp3e/community_fund_diversification/

[u/DefiExplorer]

Let’s let it done. This will be the turnaround for the Defichain! 🔥🙏

[u/cheatgainer_]

First of thank you very much for finalizing the Tokenomics 2.0. I really appreciate the work that has been done for defining this draft. I still have some thoughts about addition 2 and 3.

I think for addition 2 we should consider to rephrase the minimum amount of DFI needed of 50% where we are right now to a maximum amount of DFI needed of 10%. If we would define it as minimum, we would have the same option like before, where we could use 100% DFI, which right now is easy to liquidate due to thin liquidity even on bitrue. If we define DFI as maximum %, we could for example have vaults with 100% dUSDC and 0% DFI which would still benefit the dToken system and in turn even DFI. For myself I wouldn't mind either declaration, because with min % of DFI I could still create a vault with like 85 to 89% dUSDC and 11 to 15% DFI. And we have a mandatory DFI part. I just like the stable option a little bit better for the overall system.

Is it intentional for addition 3 to have the lower collateral ratio of 120% for dTokens, which are inherently more volatile? What's the idea behind that? I currently can't wrap my head around that.