Know dFed.finance: the Decentralized Federal Reserve Board

4 min readSep 26, 2020

What is dFed.finance？

The vision of dFed is to build a decentralized world central bank, so we called it dFed (FED is the abbreviation of the Federal Reserve Board).

dFed will establish a fully decentralized system that integrates market dealing, borrowing & lending, and currency-issuing.

dFed is a self-service open system run by smart contracts, and it will support any kinds of cryptocurrencies trading, lending, and mining.

What problems have been solved?

1. Stable coins such as USDT, which are guaranteed by centralization, they are not open and transparent enough, and there is a risk of evil, such as the bank behind USDT isn’t audited, the long-term price discount, and the issuance of additional coins is not transparent.

2. Decentralized stablecoins, such as DAI, only supports limited assets, which need to be checked and confirmed by the team. The essence is guaranteed by the team. Once the price fluctuates greatly, there will be liquidation risk. For example, in the case of the March 12 incident, the MakerDAO foundation was forced to auction tokens to pay its debts.

3. The value of governance token becomes the debt guarantee of DeFi projects, which depart from the original intention of decentralized governance, and the rights and interests of the holders become debts. Once the project has bad debts and the foundation decides to sell, the holder will lose.

How does dFed work?

dFed.Finance consists of a decentralized trading market based on AMM and a mintage platform based on liquidation priority strategy. It supports an open asset platform with no permission and freely exchange but has no bad debts at all. This platform issues USDD which is equivalent to USD and based on the liquidity pool, relying on the underlying trading market, the platform can ensure the absolute security of assets by the strategy of liquidation priority.

dFed is a pure decentralized StableCredit and Liquid, it can be simply understood as dFed.finance = MakerDAO-like Mint x Uniswap-like Exchange x Compound-like Governance.

What is dFed’s Advantage?

1. The stable coin USDD generated by cryptocurrencies asset, it does not need a centralized world and centralized asset guarantee.

2. Support all cryptocurrencies participate in the generation of USDD through a mortgage, regardless of Bitcoin, Ethereum, or any kinds of altcoins.

3. Self-service, similar to Uniswap listing, the community distributes and withdraws funds by themselves, without a central team examine and verify.

4. Liquidation priority strategy ensures the 100% security of exchange between mortgaged tokens and stable coins and completely eliminates the liquidation risk caused by price fluctuation.

What’s the benefit if a token listing on dFed?

dFed can make any kind of tokens fair trading, easy lending, and yield farming.

1. Increasing trading platforms, it is equivalent to list on a DEX, creating trading pairs, and adding liquidity will make the community more active.

2. mortgaging and lending, whatever the token is, whether it is unable to sell or do not want to sell, it can be used as a mortgage, to lend stable coins for financial management.

3. participating in mining, as the governance token of dFed, FED will reward all the liquidity providers for all the trading pairs, that is additional income. Transaction fees will buy back FED and burn it.

In short, more usage, more liquidity, more income, but less circulating supply.

What’s the usage of FED?

All the people that provide liquidity to the pool will be rewarded of the FED governance tokens, which is defined as mining in dFed. The more and the longer liquidity they provide, the more FED tokens they will get.

The transaction fees and lending interest will be used to buy back FED and burn the FED tokens in the market.

FED tokens represent the governance rights, everyone can participate in project governance by deposit FED, including proposal, voting, execution, etc.

What’s the future of dFed ?

dFed is a kind of lending system that is impossible to generate bad debts. It is open and self-help. It supports trading and lending of all assets. It is in line with the concept of a decentralized central bank. It solves problems that have not been solved in the real world. It is a decentralized world central bank that supports decentralized governance.

dFed is a basic protocol and service framework. At present, it provides basic trading, lending, and mining capabilities. More DeFi applications can be built on it in the future, such as insurance, DAO, asset management, forecasting, etc. At the same time, it can also combine with various kinds of DeFi LEGO freely, such as stable coins exchange like Curve, mining strategy to join YFI pool (yVault), liquidity docking with various swaps, etc.
The first phase of dFed will deploy on Ethereum, and will later be deployed on the well-known public chains such as TRON Chain and Binance Chain, and will also support the MultiVAC mainnet that will be released in Q4. As a DApp, the dFed will also add support for cross-chain scenarios, with the goal of becoming a platform to support the trading, lending, and mining of all kinds of cryptocurrencies assets on all mainstream chains.