Decentralized Finance (DeFi) is all the rage in cryptocurrency right now – and for good reason. You could argue that DeFi is the most suitable concept out of the blockchain space so far, since it strongly upholds the values of cryptocurrency. DeFi provides anyone the opportunity to take their financial matters into their own hands and do away with greedy middlemen.
Financial services are known to be lucrative. But only for the people that work in the industry. In developed countries they account for about 20% of the total gross domestic product, which is huge. The problem is that financial service providers lock your money up with complicated terms while only generating you small returns, while they scamper off with the bulk of the profits.
That’s why DeFi is becoming so popular. It’s a new way for people to access financial services completely independently. You choose where you money goes, when you want to access it and you don’t have to share the proceeds with any intermediaries.
Despite the current explosive growth of DeFi, there are some limitations of the current systems, including poor smart contract scalability, confidentiality problems, consensus vulnerabilities, excessive functionality of Turing complete smart contracts that leads to errors, hacking and attacks (like DAO hack where more than 3.6m ether was drained or the Balancer hack where more than $500K was drained) and, shockingly, a degree of centralization that shouldn’t exist.
DEFIS is a cryptocurrency project that’s tackling these issues with their own proprietary solution.
Introducing DEFIS (XGM)
DEFIS is a new blockchain that’s specifically designed to improve DeFi by solving existing limitations. Using DEFIS you can borrow money, earn interest, exchange crypto and create your own cryptocurrencies.
As DeFi has been growing, scalability has become a real stickler. To rectify this issue DEFIS built a new specialized blockchain that approaches scalability in a new way. Other blockchains use a scripting language to specify how coins can be spent. The problem with this is that it results in a lot of data that can’t be compressed. That’s why DEFIS’ blockchain is based on what they call “Scriptless scripts” technology – which enables enforcement and execution to occur off chain, significantly enhancing scalability.
Naturally, security is vital for DeFi. Poor security puts millions of dollars at risk. A large number of DeFi applications are built with what’s known as Turing-complete smart contracts, which has introduced security flaws in the past allowing incidents like the DAO attack, where 3.6 million ETH was made irretrievable and Etheruem had to fork. DEFIS chose to utilize non-Turing-complete smart contracts, which supposedly decreases the risk of security related errors and also makes the code much easier to test for vulnerabilities.
As previously mentioned, smart contract privacy is lacking in current DeFi applications. That’s why DEFIS is set up so the terms of any smart contract are only viewable to the parties involved in the contract. Furthermore, the DEFIS blockchain does not store transactions or addresses, it is fundamentally private. Privacy is achieved using a combination of Confidential transactions (CT), Confidential Assetchains, CoinJoin, Bulletproof, Cut-through and Blinding factor that encrypts all inputs and outputs.
An interesting thing about DEFIS is the choice to use Proof of Work (PoW) rather than Proof of Stake (PoS). Most DeFi systems are based on, or are planning to move to, Proof of Stake for scalability reasons. However, DEFIS discovered that moving to PoS wasn’t required to solve scalability and by avoiding PoS they are able to dodge some other issues.
By choosing to use Proof of Work there isn’t a battle between PoS staking returns and DeFi returns that can compromise network security. In PoS systems, if DeFi is providing better returns then the number of stakers reduces, which reduces the network security. DEFIS’ PoW network uses a parallel chain architecture which connects chains with the atomic swap protocol. Funds can freely move between chains, which allows chains to operate their own networks without burdening the main chain.
XGM is the native coin of the DEFIS ecosystem. It’s required to carry out any operations within the decentralized finance system. XGM is used to pay all payments, transaction fees and smart contract fees. Miners are paid in XGM. XGM can be used as collateral for borrowing other crypto.
DEFIS mystery boxes
The cryptocurrency industry thrives off news and announcements. So the DEFIS team came up with a great way to keep their community in suspense as they promise to bring out a series of announcements: mystery boxes.
DEFIS will be opening mystery boxes at least once a month. Furthermore, once the fifth box is opened there will be a ‘huge surprise’ according to the team. We don’t know what will be in the next ones, but their community was extremely excited about the first box opening.
First box opening
The first mystery box was opened on June 23 on the DEFIS Twitter. Inside was a new listing reveal: XGM will be listed on Hotbit.
The date isn’t announced yet, but the community knows it’s coming and they are excited, anticipating new trading pairs and an influx of trading volume and new attention for DEFIS.
The Daily Chain
*This article has been sponsored. The Daily Chain encourages you to carry out your own research before you make any form of investment and educate yourself about how to stay safe in the crypto space.