DeFiChain, the world’s first native DeFi blockchain devoted to decentralized monetary applications and services for Bitcoin, has announced the launch of decentralized “stock token trading” in the form of loan tokens, to provide greater liquidity for cryptocurrencies and greater access across financial asset types.
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In addition to bringing decentralized stock token trading, DeFiChain delivered multiple asset class tokens, including real-estate, commodities, bonds, precious metals, FOREX and equities — referred to as dTokens (or decentralized loan tokens). This form of token trading is one of the newest and most anticipated innovations to be introduced in the industry. Unlike other OTC services or even some blockchain protocols, stock and asset tokens on DeFiChain are not securities, but actually decentralized loan tokens minted by DeFiChain users. The holding of loan tokens does not offer users any ownership of underlying assets, as it does with traditional stock or asset market trading. Instead, DeFiChain has created a new and unique form of DeFi stock and asset trading that in part, tracks a number of variable factors of listed companies, such as Apple Inc., Tesla Inc., Amazon.com Inc. and GameStop Corp., as well as other ETFs.
Decentralized stock and asset tokens in the form of loan tokens will be collateralized against cryptocurrencies, via an intricate yet robust DeFi vault and loan system, requiring users to fund their loans with a minimum of 50 per cent in DFI (DeFiChain’s native digital currency) in order to facilitate the minting of dUSD and / or dToken. At launch, the collateralization ratio starts at 200% and higher, which means that the decentralized asset tokens are overcollateralized on-chain at a minimum rate of twice their values. In turn, experienced and novice users have the ability to trade DeFi stock and asset tokens freely in the same way they would trade cryptocurrencies on a DEX, all without having to pay costly intermediary fees.
Julian Hosp, Co-Founder of DeFiChain, “DeFiChain, being a decentralized blockchain, serves users from all around the world, some of whom do not have access to traditional financial markets. Based on all of the conversations taking place on DeFiChain’s community channels, it’s safe to say that the entire community is thrilled by the launch.”
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When we initially founded DeFiChain, our vision was to provide access to decentralized financial services and applications servicing millions around the globe in support of a more inclusive financial future, in a highly secure manner, without smart contract vulnerabilities that bound to hacks, exploits and “rug-pulls”. Since taking the conscious decision to step back — thereby making it a truly decentralized project that is fully governed by its users — it’s impressive to witness what they’ve created. This really is a financial and technological bridge that will aim to democratize value creation and transfer easily, seamlessly, in a fully transparent and trustless manner,” he added.
Decentralized stock tokens on DeFiChain can be minted in fractions through the utilization of the decentralized loan mechanics, by over-collateralizing cryptocurrencies through a vault system, or purchased via the DeFiChain Decentralized Exchange (DEX). These rules have been implemented to calculate and automate multiple factors such as collateralization ratios, interest rates, liquidation processes, as well as the minting of tokenized assets and trading, completely backed by crypto.
Decentralized stock token trading will be facilitated, priced and settled in DUSD, a decentralized stablecoin algorithmically tied to the value of the U.S. Dollar. Through the vault and loan mechanism, users can create a form of exchange between a stock token and cryptocurrency, which users can provide liquidity to and eventually, liquidity mine for rewards. This architecture ultimately powers the stock token trading mechanics on DeFiChain in a trustless manner, and utilizes DeFiChain’s native digital currency, DFI, as well as BTC, ETH, USDC, USDT and DUSD.
The DeFiChain Ticker Council added, “This is something that we — as the community — have been pushing to launch on DeFiChain for a long time. Users will have the ability to Liquidity Mine for rewards after minting asset tokens, and this is something that we are thrilled to be able to deliver in such an exciting format.”
For complete transparency, governance of decentralized stock token trading will be carried out collectively by masternode owners and operators on DeFiChain, which will occur on-chain in a fully decentralized manner. All transactions, vault information and even oracle details are trackable and viewable on DeFiScan.
DeFiChain will continue to list popular stock tokens as well as introduce innovative additional features in due course. Being a fully decentralized blockchain with on-chain governance, interested parties are not required to complete identity verification to be able to hold decentralized stock tokens on DeFiChain.
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