DeFiChain Tutorials

This is a work in progress. Please do not go off of this tutorial as it is incomplete, unedited, and may not be accurate.

This tutorial is designed with easy-to-understand language without complex words or cryptocurrency jargon, for a new cryptocurrency user who has already done their research and would like to invest in DeFiChain.

A Short Introduction

DeFiChain has been designed specifically for decentralized finance, with its own blockchain anchoring (attaching) to the Bitcoin blockchain for extra security, as Bitcoin has the oldest and arguably the most secure blockchain.

The main coin of DeFiChain is DFI (it is also called "native coin," basically meaning that DFI is the main coin of the blockchain, powering the network). For example, the Bitcoin blockchain's native coin is BTC, and for the Ethereum blockchain the native coin is ETH. In essence, native coins are used for almost everything on a blockchain.

After reading this article, you probably will have more questions. Here are the official groups/social media of DeFiChain. Please note: Scammers are attempting to steal your money and personal information. If you receive a sudden DM, you do not need to respond and simply ignore them/block them. Community mods/admins/support will never start the conversation. If you are unsure if someone is attempting to scam you, chat in the official groups. Remember: There is only one legitimate group in every language. If you are already in the DeFiChain English group, there is no other DeFiChain English group.

• Telegram: https://t.me/defiblockchain (English)
• Reddit: https://www.reddit.com/r/defiblockchain/
• Twitter: https://twitter.com/defichain

How to Obtain DFI

There are multiple ways to obtain DFI.

• CakeDeFi, also known colloquially as Cake (https://cakedefi.com)
• Exchanges
• Atomic Swaps

Here we will describe the advantages and disadvantages of each method.

CakeDeFi

Background

Cake was founded in early 2019 by Dr. Julian Hosp and U-Zyn Chua. As you may or may not know, they also started the DeFiChain project.

They do have their own subreddit and Telegram group. These cannot provide official support, do not let anyone lead you to believe so. It will be made clear in their respective groups.

• Reddit: https://www.reddit.com/r/cakedefi/
• Telegram Group: https://t.me/CakeDeFi_EN

Advantages

• Founded by same crypto investors as the project itself, so they have a great understanding of the project
• Largest company involved with DeFiChain
• Hundreds of thousands of users also use the platform (400,000 according to the website, cakedefi.com)
• Offers other services on DeFiChain and supports other coins, allowing you to use it for multiple purposes
• They are offering a $30 deposit bonus on any first deposit of more than $50, incentivizing users to start with them

Disadvantages

• 4% premium, according to the official DeFiChain website (defichain.com)
• KYC is required (you need to provide proof of residence and other personal information)
• Certain locations are prohibited from using Cake, you must ensure you are in an authorized location
• Fees may be higher than using the blockchain, and withdrawals will take longer than using the blockchain

Registration (more information needed)

The official registration form is at https://app.cakedefi.com/register. Referral codes may enable you to get a larger bonus.

Exchanges

Background

You may have heard of exchanges such as Binance and Coinbase. These are two of the largest centralized exchanges in the world. However, these exchanges do not currently support DFI. If you wish to trade DFI using this method, here are a couple conventional options:

• KuCoin (large exchange)
  • The registration link is here. Once again, referral codes may give you certain bonuses, so take advantage of them.
  • Advantages
    • Fees are 0.2% and decrease if you trade significantly more. You also get a 20% deduction if you pay with their native token KCS. Find more information here.
    • DFI staking is offered, although with much higher fees than Cake.
    • Offers a large variety of cryptocurrencies, allowing you to trade other coins and tokens as well.
    • No KYC is required
  • Disadvantages
    • Failure to complete KYC results in a lower daily withdrawal limit. Unfortunately, it is not possible for U.S. users to complete KYC and become verified as KuCoin is not licensed to operate in the U.S. Therefore, your funds are at a greater risk should the government crack down on such exchanges.
• Bittrex (small exchange)
  • Bittrex's registration link is here. They do have referral codes, which may give various bonuses and discounts.
  • Advantages
    • Like KuCoin, there is a large selection of cryptocurrencies available for purchase
  • Disadvantages
    • Fees are higher than at KuCoin, starting at 0.35%

In addition to these traditional exchanges, you may also use DFX.Swiss to obtain your DFI if you have a SEPA bank account. It is a community-run project and also offers DFI staking and the trading of tokens that are offered on DeFiChain. However, their services are available only on their app, and their fees are significantly higher. They begin at 2.9% for low-volume traders and decrease to 2.4%, although there is a 1% discount if you use a referral code.

Advantages

• May be easier to use and have proven track records for exchanging all types of coins
• Lower fees than Cake

Disadvantages

• Exchanges are not as familiar and do not specialize in DFI

Atomic Swapping/Bridges (in progress)

Background

One feature that DeFiChain is currently working on are bridges and atomic swapping from native DFI to native coins on other blockchains such as BTC and ETH. Bridges and atomic swaps are methods of exchanging coins between blockchains. Bridges allow users to send coins from one blockchain and receive their equivalent amount in a coin on another blockchain. DeFiChain atomic swaps, which are currently (source?) available for Bitcoin, allow users to swap native bitcoin (bitcoin you can trade on exchanges) to dBTC, a tokenized form of bitcoin on DeFiChain. In other words, when you perform an atomic swap, you give away your native bitcoin and receive the form of bitcoin on the DeFiChain blockchain instead. This is similar to the concept of WBTC (wrapped BTC) on Ethereum; however, it is much more technical and complicated at the moment and is not recommended for the average user.

Advantages

• Much more decentralized than any other option. Work is done by the system with no input needed from a centralized entity.
• Fees may be lower than using exchanges or Cake

Disadvantages

• Atomic swaps are complicated for the average user and beginners; small errors can lead to a total loss of funds
• Bridges are not yet available, and are still being tested

This concludes the section, you should now have a better understanding of how to get DFI.

What you can do with DFI

While you can simply hold your DFI, you have opportunities to use that DFI to make a greater return on your investment. There are multiple ways you can generate more income on your DFI:

• Staking
  • Masternodes
  • Centralized Delegation
• Liquidity Mining
  • Tokenized Cryptocurrencies
  • Tokenized Stocks
  • Tokenized ETFs on bonds and various markets and commodities
• Collateral for Vaults (Loans)
• Bidding on Liquidated Vaults