Thread by @uzyn

As @defichain has recently overtaken one of the large DeFi blockchains – @solana in terms of TVL defillama.com/chains, a lot have started to wonder what @defichain is.

A thread to introduce you to the wonderful world of @defichain 🧵:

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@defichain is a Bitcoin code-fork, like @Litecoin and @dashpay. It was a project started in 2019 with the idea of introducing secure DeFi via Bitcoin Script style en.bitcoin.it/wiki/Script – limited instruction sets just sufficient for DeFi, but nothing more.

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This is also commonly referred to as non-Turing complete.

@defichain is a proof-of-stake blockchain that periodically anchors to #Bitcoin. Anchors are done purely via economic incentives & can be done by anyone that runs a @defichain node.

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@defichain added support for tokenization & later for wrapped tokens such as $BTC, $ETH, $USDT, $USDC, $LTC, $BCH & $DOGE.

The wrapped tokens are fully solvent. Its backing can be tracked at defichain-analytics.com/token?entry=cr… (thx @DanielZirkel ) All backing addresses provided.

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Support for DEX and liquidity mining were then added, remember this is non-Turing-complete, every DeFi transactions have been be supported explicitly at the consensus level. And later on oracles and loans support.

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Today, DeFiChain has over $357m in TVL in DEX alone. Counting masternodes & vaults, it would be $500m. Peak was >= $1B. Considering how much crypto has dropped since peak while DeFiChain TVL only dropped half – it is evident that @defichain community & utility have grown.

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DUSD, a decentrally-issued "stablecoin" is currently trading at about 65¢ to USDC. It was originally intended to be traded at around $1, it is now not – what happened?

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$DUSD's primary intention is to provide a fiat pair to dStocks. It started very similar to @MakerDAO's $DAI model, where DUSD is minted with overcollateralization of BTC, ETH, & DFI.

$DFI is the native coin of @defichain, similar to $BTC of #Bitcoin

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However, due to the bull market and over-popularity of $DUSD, it caused the price of $DUSD to be traded at a premium to $1, peaked at $1.50.

A community proposal, via DFIP, similar to #Bitcoin's BIP, was proposed to bring the price down in the form of "future swap".

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Future swap allows DUSD arbitrage against oracle prices. While this was helping during bull market, it unfortunately is causing an issue during bear market as many free-floating DUSD was created.

The free-floating DUSD is unaffected by loan's interest rate – a mechanism to increase the price of loan token similar to the initiative at MakerDAO.

While DUSD is currently "depegged", there have been many initiatives that have been carried out to bring it back to peg.

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All of the DUSD suggestions are by community & via DFIP. See github.com/DeFiCh/dfips/s…

TL;DR:
$DUSD will be $1, without any central reserves nor intervention.

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Common qn: Risk of death spiral on $DUSD? Non-existent as DUSD cannot mint DFI. DFI emission follows a strict decreasing supply curve, just like #BTC.

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As dStocks the term was used, here's a quick intro:
dStocks, similar to DUSD, is decentrally-issued via over-collateralization of crypto assets. On @defichain, you can find dStocks such as $dTSLA, $dTLT, etc. More details: github.com/DeFiCh/pinkpap…

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There have been many projects going on on DeFiChain. Upcoming upgrade on @defichain is DeFi Meta Chain (DMC) – an endeavor similar to that of C-Chain of @avalancheavax to bring smart contract and EVM support to @defichain.

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On the similar analogy with Avalanche, @defichain today is the combination of both the P-Chain (consensus) & X-Chain (DEX) of @avalancheavax.

DMC progress can be followed here: github.com/DeFiCh/metacha…

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If you are new to @defichain, welcome to hangout with the community at:
- Reddit reddit.com/r/defiblockcha…
- Telegram t.me/defiblockchain
- Discord: discord.com/invite/deficha…

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Please share with anyone who's learning about @defichain and its mission is to connect old & new worlds.

On the next ones I will share more about DeFiChain projects and what you can do with your $DFI.

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