With all the benefits and options available, Dfinance has high chances to become one of the leading platforms in DeFi by 2021.
The Dfinance project is not exactly the WING foundation was aiming to create from the start. Rather it was born out of necessity while researching and analyzing extensively for new potential market fit.
The crypto market was realizing the growth potential of decentralized finance (DeFi) back in late 2018. However, the WING team noticed a glaring reality – in the traditional finance market, many financial tools are created with financial experts who have little to no technical know-how.
Hence, the WING foundation decided to create a platform where these non-technical financial wizards can show their creativity with very little easy-to-do technical knowledge on the blockchain. And thus, Dfinance was born to bring unlocked value to DeFi.
The article will explore how Dfinance plans to realize the dream and the core technologies it employs.
Addressing Composability
The core work for Dfinance began in late 2018 and DeFi also started to become popular around this time. The reason is DeFi not only offers permutability, transparency, and permissionless finance, but also brings composability to the table. The modular approach inherent in DeFi allows users to combine different assets, instruments, and networks for innovative products and services.
To realize this potential, Dfinance entered a collaboration with Elrond Network – a high-performance public smart contract platform. The objective is to co-benefit through expanded utility and lowered usability barriers.
This will establish a two-way gateway between the two networks to facilitate easy asset transfers. The Dfinance users will create new types of products, including Elrond asset-collateralized products like the native $BUSD or $ERD stablecoins. On the other hand, this will enable Elrond users to access existing instruments and build their DeFi tools on the Dfinance platform.
This partnership will boost what Dfinance has set to achieve – total access to DeFi’s potential.
The Core Technology
Consensus Mechanism
Dfinance opted for Consensus Network’s Tendermint Proof-of-Stake (PoS) consensus mechanism. The team has yet to decide the final number of validator nodes for the mainnet. The present testnet contains 31 validator nodes. Dfinance is working to make the node setup process much easier.
Tendermint offer the following benefits:
The PoS mechanism offers excellent scalability and great speed, which is needed for a rapidly expanding platform. Even Ethereum has planned to switch to its own PoS.
Tendermint’s inherent Byzantine fault tolerance (BFT) feature enables the Dfinance network to withstand unpredictable malicious attacks or network node failures.
It helps in p2p communications and security purposes.
The Architecture
Dfinance network consists of three main components:
dnode – The blockchain node is built with Cosmos SDK. It includes Tendermint consensus, PoS modules, Oracles, VM functional, etc.
dncli – This is the command-line interface (CLI) for interacting with dnode. It also enables launching REST API server.
dvm – Move Virtual Machine by Libra packed as gRPC server, allowing smart contracts execution via gRPC. Also, it contains compilers of Move language. Requires dnode for correct functioning.
Token System
Dfinance employs a two token system.
DFI- The native DFI coin is used for multiple utilities like staking, paying gas fee, governance, and to offer liquidity in the network.
XFI – The primary ticker coin (ERC-20) is used for transactions. It will be available once the mainnet launches and can only be acquired through WING token swaps.
The Smart Contract Execution Platform
In its pursuit to offer a powerful code execution platform, Dfinance uses Move language and virtual machine (VM) by Facebook‘s Libra on its decentralized nodes. This allows connecting to dnode to read data from storage, while dnode connects to VM to execute smart contracts. Unlike other EVM, the Move platform function is resource-oriented and offers bytecode verification, making it much more protected.
Also, the transaction-as-script functionality enables users to do multiple operations within a single transaction written in Move language, thus offering flexibility.
The Dfinance network uses two types of smart contracts – module and script. The module type is issued into blockchain storage and filed under the publisher’s account. On the other hand, script smart contracts are simply a transaction-as-script and therefore can operate only with existing modules. These default modules, called Standard Move VM library, are used to develop new modules.
PegZone
An integral part of DeFi is achieving as much liquidity as possible. This means being interoperable with other popular blockchains.
To achieve this easy value transfer across the chains, Dfinance employs the PegZone protocol. Dfinance plans to be interoperable with numerous layer-1 blockchains such as Ethereum, Bitcoin, EOS, etc. The present testnet version supports Ethereum blockchain only and thus offers any other ERC20 tokens, including ETH compatibility.
PegZone allows you to lock these ERC20 tokens in a smart contract called Bridge in the Ethereum blockchain, which is managed by the approved validators list. Once deposited, they release a proportionate amount on the given address in the Dfinance network. This feature enables the approvers to levy a 0.1% fee of every transaction for cross-chain value transfer only when coins are deposited.
Subsequent upgrade and mainnet launch will make it more efficient and add further chain supports.
Oracles
Dfinance uses decentralized oracles to connect with real-world financial instruments and various data sources. It currently supports price feed oracles only. Dfinance platform collects posted prices from multiple whitelisted oracles, calculates median, and stores the final price for the last block. Dfinance provides the option to write your own module that can use the oracle’s feed.
As of now, Binance is the only platform it fetches price from, supporting ETH-USDT and BTC-USDT pairs. Dfinance plans to supplement more exchanges and ticker pairs.
Staking and Slashing Mechanism
Since using PoS, staking is an integral part of Dfinance network.
The node validators get selected based on the amount of stake they hold. Also, users can delegate their stake to preferred node validators by locking these DFI coins in smart contracts. When the validators earn rewards, the stakers also gain from them as per their stake size – higher stake drawing higher rewards.
On the flip side, Dfinance has a slashing mechanism to discourage undesired activities in the network. The punishment strategy it employs are as follows:
Missing blocks – In addition to a 1% slash in stake, that validator is denied participation in the consensus until he sends a manual release request.
Double signing – A 5% slash in stakes.
Dfinance plans to introduce several liquidity staking mechanisms to bring borrowing, liquidity, borrowing, and other financial services for delegators through earned sDFI coins. Also, this increases the staking maturation time.
Conclusion
The project’s objective is aligned with DeFi’s exponential growth, and Dfinance is building its platform swiftly on a solid foundation. It won’t be surprising if Dfinance becomes one of the leading platforms in DeFi by 2021.
Having obtained a diploma in Intercultural Communication, Julia continued her studies taking a Master’s degree in Economics and Management. Becoming captured by innovative technologies, Julia turned passionate about exploring emerging techs believing in their ability to transform all spheres of our life.
How low could XRP go? Watch these price levels next
Published
6 Stunden ago
on
Dezember 29, 2020
By
XRP price dropped by 30% on Dec. 29 following Coinbase’s decision to suspend trading.
The market sentiment around XRP has become overwhelmingly negative due to the fear of more exchange delistings.
In the near term, XRP faces three key historical support levels at $0.224, $0.1743 and $0.1471.
Where will the XRP price go next?
The ongoing price trend of XRP is not cyclical nor reliant on technical analysis. It is due to investors selling XRP following the suspension of trading across major cryptocurrency exchanges.
On Dec. 29, Coinbase announced that it is suspending the XRP trading pairs on their platform. Paul Grewal, the chief legal officer at Coinbase, wrote:
“In light of the SEC’s lawsuit against Ripple Labs, Inc, we have made the decision to suspend the XRP trading pairs on our platform. Trading will move into limit only starting December 28, 2020 at 2:30 PM PST, and will be fully suspended on Tuesday, January 19, 2021 at 10 a.m. Pacific Standard Time*. We will provide additional updates, if any, through the Coinbase Support Twitter account, including if there are any changes to timing.”
Given the SEC’s recent action against Ripple, all XRP books have been moved to limit only and Coinbase plans to fully suspend trading in XRP on Tuesday, January 19, 2021, at 10 AM PST. Afterwards, users will continue to retain access to their XRP funds. https://t.co/izreZvgHNl
As Cointelegraph previously reported, analysts anticipated Coinbase to suspend XRP trading after the United States Securities and Exchange Commission filed its complaint.
Coinbase plans to undergo an initial public offering, and it is in the firm’s best interest to remain fully compliant with the regulators in the U.S.
Considering the regulatory uncertainty around XRP, traders have emphasized that technical analysis is of less importance in the short term. Scott Melker, a cryptocurrency trader, said:
“A few people have told me that there’s oversold bullish divergence on the $XRP chart. You are doing it wrong. Charts don’t matter here. You cannot trade in a vacuum. Jesus could come down with Biggie and Tupac and put on a concert for Brad Garlinghouse and I still wouldn’t buy.”
In the foreseeable future, XRP has several major support areas it could potentially recover from. However, these are deep support levels on the weekly chart, which shows that it lacks momentum for a major rebound.
The XRP price has fallen by over 60% in merely two weeks, recording one of its steepest two-week drops in history.
What happens next?
Adam Cochran, a partner at Cinneamhain Ventures, was one of the first to break the story that Coinbase had conversations about suspending XRP trading.
Cochran hinted that the SEC are probably looking into more projects and companies than people realize. He said:
“If you thought my scoop on Coinbase delisting/suspending $XRP was insightful, you’re going to love the next scoop I’m working on, this week. Looks like that SEC is far more active than we thought and sniffing around a number of projects and companies!”
In the initial exploit, the attacker liquidated over 11,700 coins on the 1inch decentralized exchange aggregator after inflating the token supply according to data from the Ethereum wallet explorer Nansen. In total, the rogue actor drained more than $5 million from the project as of press time.
Cover Protocol released addressed the incident in a message posted on its Discord group, stating:
“The Blacksmith farming contract has been exploited to mint infinite $COVER tokens. We have restricted minting access to the farming contract in order to stop the attacker. If you are providing liquidity for $COVER token (uniswap or sushiswap) please remove it immediately.”
According to the Cover Protocol team, the issue only affected the token supply with funds held in “claim/noclaim” pools still safe. The project says it is investigating the incident.
The attack caused a massive decline in the COVER token price, falling by more than 97% while also eliciting negative comments from a cross-section of the crypto community on social media. Back in November, Cover was one of the DeFi protocols to merge with Yearn.Finance.
Monday’s incident makes the Cover the latest DeFi project to suffer a malicious exploit in a year ridden with opportunistic profiteering attacks against numerous protocols.
As previously reported by Cointelegraph, the spate of DeFi hacks throughout the year stand out as one of the major disappointments in the crypto space for 2020 with data manipulation deemed as being easy to accomplish on many projects.
XRP price faces a rocky road to recovery ahead of SEC’s Ripple lawsuit
Published
21 Stunden ago
on
Dezember 28, 2020
By
Just over a month ago on Nov. 24, XRP’s value surged to above the $0.90 mark on U.S. cryptocurrency exchange Coinbase, albeit momentarily, leading many backers to believe that the digital currency was all set to skyrocket once again, possibly even retesting its January 2018 all-time high of over $3.
However, in the wake of the recent lawsuit laid out by the United States Securities and Exchange Commission against Ripple, not only does a future value hike look increasingly improbable for XRP but the project’s future as a whole could be in jeopardy. The SEC’s core argument against the digital currency created by Ripple is that from the very beginning, it has been a “security” and, as such, should have been registered with the governmental body before being made available for purchase for American citizens.
Furthermore, the SEC has claimed that Ripple, CEO Brad Garlinghouse and executive chairman Chris Larsen are in the wrong because they were able to acquire over $1.38 billion from the sales of the XRP token. In the wake of these allegations, the now fourth-largest crypto by market capitalization crashed by 24% in just 24 hours.
And while XRP did experience a small window of relief on Dec 25, rising by around 40%, the SEC’s announcement has led to many major crypto exchanges delisting or freezing the token. Initially, it was only platforms such as OSL, Beaxy and CrossTower that temporarily stopped trading or removed XRP from their platforms, but more recently, the U.S.-based trading platform BitStamp announced via Twitter that it was going to prohibit customers from trading and depositing XRP starting January 2021. Ben Zhou, CEO of cryptocurrency exchange ByBit, told Cointelegraph:
“SEC and Ripple will have their day in court with due process of law, so we shall not prejudge the case in the court of public opinion. It is of course likely that the case will take up much of Ripple’s attention and resources. […] We hope a clear precedent and framework emerge from these proceedings.”
The nitty-gritty of the case
In its complaint, the SEC has laid out a fairly straightforward argument stating that XRP was never registered with the body and that Ripple’s executive brass did not make any attempts to pursue an exemption from registration. Thus, from the commission’s point of view, this amounts to a sustained practice of illegal sales of unregistered, nonexempt securities under Section 5 of the Securities Act of 1933.
However, what seems unusual to some is that the case has been brought forward in a New York federal court even though Ripple’s headquarters are in California. The simple reason for this is that Ripple has one of its offices situated in the Southern District of New York and some of the statements issued publicly by Garlinghouse regarding XRP were made within the state. Not only that, a substantial number of XRP tokens were sold to New York residents, which in legal terms makes it absolutely fine for the lawsuit to be tried in a New York court of law.
Also, the lawsuit names Larsen and Garlinghouse personally — so as to recover any money obtained by them via their various fundraising efforts — even though the initial XRP was sold by Ripple’s wholly owned subsidiary XRP II LLC. In this regard, the SEC claims that both individuals sold significant volumes of XRP illegally — 1.7 billion XRP by Larsen and 321 million XRP by Garlinghouse — even contending that they “aided and abetted” Ripple in its unethical sales practices.
Providing his thoughts on the matter, Todd Crosland, CEO of cryptocurrency exchange CoinZoom, stated that the lawsuit casts a large shadow over the price of XRP, claiming that it will be interesting to see how things play out as “Lack of institutional support will hurt liquidity,” adding: “Institutions will not bet against the SEC, and will be unloading their positions and will avoid taking new positions in XRP until the lawsuit is resolved.”
What are the implications of the lawsuit?
If the SEC succeeds in its prosecution efforts, Ripple will be framed as the primary violator, with both Larsen and Garlinghouse facing serious legal implications, as both are alleged to have participated in the pattern of XRP sales.
Technically speaking, the SEC’s issues with XRP stem from the fact that the digital currency satisfies key elements of the Howey test under federal securities laws, thus leading to the question of how exactly Garlinghouse and Larsen were able to take part in the token’s various sales efforts.
The commission is now seeking to not only obtain all of Ripple’s ill-gotten gains but is also looking to permanently ban the named defendants from ever selling unregistered XRP or participating in the sale of unregistered, nonexempt securities. Not only that, but the SEC is also seeking an unspecified civil monetary penalty, the exact amount of which has not been made public.
A twist in the tale?
The ongoing XRP saga comes at a time when SEC Chairman Jay Clayton has submitted his resignation, with his duties being taken over by Elad Roisman, who has been appointed acting chairman of the U.S. financial regulator. Also, in a recent letter sent to Clayton, Joseph Grundfest — a former SEC commissioner — was allegedly quoted as saying that while the Ripple lawsuit is an “unprecedented” event, “no pressing reason compels immediate enforcement action.” He added: “Simply initiating the action will impose substantial harm on innocent holders of XRP, regardless of the ultimate resolution.”
Related: SEC vs. Ripple: A predictable but undesirable development
In the midst of all the aforementioned events, Garlinghouse has continuously reiterated that he will “aggressively fight” in court the SEC’s allegedly unwarranted actions against Ripple and will rest only after the case has been proven to be entirely untrue. Furthermore, he also emphasized that even though he had the option of settling with the SEC, he has decided to not take the easy way out.
It now remains to be seen what fate, or the American judicial system, has in store for Ripple. As of publication, XRP is trading at $0.29, with the asset showcasing a seven-day decline of nearly 50%.
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