In addition to transactions, dFuture users can also profit through three ways: transaction mining, FOMO reward pool, and dynamic program fees and interest rewards.
Written by: Zombit
The rapid development of DeFi has contributed to the qualitative change of DEX in the past six months. Head decentralized exchanges such as Uniswap have shown the potential to threaten centralized exchanges, but they are subject to high transaction costs on the chain. At present, spot trading, or to be precise, the exchange between currency and currency is still the main application scenario of DEX. In centralized exchanges, the considerable scale of futures derivatives has not found a sufficiently good decentralized solution. And dFuture is trying to pry open the door behind the huge market.
dFuture is a decentralized derivatives exchange created by Mix Labs, a subsidiary of the MIX Group. It does not use AMM (Automatic Market Maker Agreement) that uses “algorithms to determine prices” like other decentralized exchanges, but uses external Quotation, so a “no slippage” transaction is realized.
dFuture is a financial derivatives trading agreement based on external quotations and dynamic commissions based on constant sum formulas. Its QCAMM protocol uses multiple external oracles to obtain the latest comprehensive quotations of traded commodities from multiple exchanges.
Since it is a decentralized exchange, it is naturally divided into two roles: traders and liquidity providers.
For traders, dFuture is to directly complete long or short take orders based on the quoted price, no pending orders and no slippage; for liquidity providers, since dFuture only provides collateral for a single stable currency USDT, There is no impermanence loss that AMM has.
Photo credit: dFuture white paper
Next, the author will gradually analyze how to operate and how users will arbitrage the two roles.
Receive faucet tokens
According to the announcement, the governance token DFT of the dFuture platform has been issued on December 28. Anyone who participates in the public beta version and meets the conditions can get an airdrop of DFT tokens. Since dFutue is currently in the public beta and uses Kovan, the test network of Ethereum, dFuture will issue test tokens of 100,000 USDT and 0.1 ether (handling fee).
Testers need to adjust Metamask or other wallets to the Kovan testnet before they can connect to the dFuture platform:
It is important to note here that the tester needs to receive the test version of USDT and Ether in order to operate, because the platform and smart wallet interaction requires Ether as the gas fee.
User interface is not difficult to get started
The dFuture platform currently provides 4 types of encrypted derivative commodity trading pairs, namely BTC/USDT, ETH/USDT, LINK/USDT, YFI/USDT. Unlike other decentralized exchanges, you need to keep an eye on platform quotes and pay attention to slippage. Since dFuture obtains the latest comprehensive quotations of traded commodities from multiple exchanges through multiple external oracles, traders will directly trade when opening a position, and there is no slippage problem.
Taking the opening test order as an example, the author opened a 0.1 BTC position at 27,588 USD, with a leverage of 15.4 times. Not only did the price have no slippage, but the transaction fee was only USD 0.59.
In fact, due to the relationship between trading and mining to earn DFT tokens, the transaction fee will theoretically be even lower, and it will even become “the more transactions the higher the profit”.
It’s worth mentioning that dFuture’s trading interface is quite straightforward and easy to operate. It operates just like a general centralized exchange. It only takes a few steps to open a position: select a trading pair, then choose to go long or short, and enter For the quantity or amount of the position, set the leverage and click the “Open Position” button to complete.
Trading rewards and arbitrage methods
In addition to trading, traders can also use three ways to profit on the dFuture platform.
Transaction mining: The transaction mining reward is divided into DFT mining rewards based on the proportion of the user’s effective transaction volume from the previous day to the total effective transaction volume of the platform that day.
dFuture FOMO Reward Pool: If the FOMO pool has no users trading on the platform for more than (including) 120 blockchain time periods in Ethereum, all DFTs in the FOMO pool will be rewarded to the last trader before no transaction.
Dynamic program fees and interest rewards: To encourage transactions to tilt in the direction of reducing naked positions, traders can obtain additional USDT rewards through counter-naked position trading; to encourage positions to tilt in the direction of reducing naked positions, traders can reverse The method of holding open positions in the direction of naked positions will receive additional USDT rewards.
In summary, traders on the dFuture platform can obtain additional funding rates by trading against the direction of naked positions, which allows traders to obtain additional USDT rewards in addition to hedging.
In addition, traders can also obtain transaction mining rewards, which are allocated to DFT mining rewards in proportion to the effective transaction volume of the previous day. And holding DFT tokens can reduce the handling fee. In addition, if more and more traders trade on the dFuture platform in the future, DFT tokens will become more valuable. In other words, the transaction will not only cost no handling fees, but even It is possible to reach a “transaction earning commission”.
Liquidity provider rewards
dFuture is a decentralized exchange and naturally needs liquidity providers. Liquidity providers can explain to obtain part of the transaction fees and platform tokens by collateralizing tokens into the trading pool.
Unlike other exchanges that need to mortgage specific tokens in different pools, dFuture only accepts the collateral of the stable currency USDT, which means that liquidity providers will not experience “impermanent losses” due to the decline in token prices on the dFuture platform.
The mortgage operation process is also quite simple, just click the “Liquidity” button, select the amount of USDT to be mortgaged, and you can proceed to mortgage.
The specifications of dFuture are as follows:
- According to the proportion of USDT deposited in the liquidity pool, LP tokens (liquidity shares) are obtained, which are used to track the proportion of liquidity contributed by each liquidity provider (LP) in the total liquidity pool.
- Liquidity providers (LP) will receive USDT rewards and mining rewards from the liquidity pool in proportion to the proportion of their holdings;
It should be noted that although dFuture can redeem liquidity to obtain USDT at any time, it needs to pay a 0.5% handling fee. If a large amount of USDT is mortgaged, users will need to pay attention to whether the amount will exceed their own profits.
Self-contained economic model
For traders, the dFuture platform allows users to keep their own funds and only “authorize” to obtain the user’s transaction funds in the wallet during transactions, which avoids many security incidents similar to hacker attacks.
On the other hand, no slippage and low handling fees also meet the needs of traders. In addition, transaction mining allows users to earn platform tokens when opening positions. The only drawback is that there are currently only 4 Trading pair. However, as the platform develops, there will be more and more trading pairs.
Interestingly, since holding DFT can reduce the handling fee, high-frequency traders may choose to keep DFT, thereby reducing the price drop caused by selling pressure.
For liquidity providers, dFuture’s transaction mining mechanism will attract a large number of traders to mine. Coupled with the FOMO pool mechanism, it will rapidly increase the transaction volume of the platform, which will also enable liquidity providers More and more USDT rewards are transferred.
DeFi has proven its potential, but there is currently no decentralized derivatives trading platform like dFuture that solves the pain points of existing AMM. Just like early Compound, Synthetix, and Year, dFuture solves existing pain points through a decentralized approach.
dFuture allows users to use dFuture’s derivative futures transactions to achieve hedging or increase the demand for leverage in addition to borrowing or holding cash, so as to maximize the efficiency of funds in DeFi and complement DeFi One of the important pieces of the missing puzzle.
