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dtokens

What Are Decentralized Assets And How do They Work?

Decentralized Assets (or dTokens) on DeFiChain are an entirely new and revolutionary form of crypto investment. These dTokens can be created (minted) by anyone on the DeFiChain blockchain, simply by first locking a minimum of 50% DFI (with the option to add more in BTC, USDT and USDC) into a vault.

A dToken can then be minted and taken out in the form of a decentralized loan, which is collateralized by crypto. The price when minting a dToken is set by pricing oracles as a point of reference (for example, a TSLA oracle price is used to create dTSLA). A dToken can then either be held as an investment, traded on the DeFiChain DEX, or used for Liquidity Mining on the DEX.

A dToken’s price moves freely and independently of the oracle price, depending on supply and demand of a given dToken on the DeFiChain DEX. In order to close a loan and get back the collateralized cryptocurrencies, the corresponding dToken has to be paid back with interest, all of which is visible when a user takes out a decentralized loan.

A dToken can also be purchased directly on the DeFiChain DEX without having to take out a loan. This is applicable for investors who want to invest in decentralized assets without the need for collateralization or dealing with loan interests.

These dTokens are minted by users, and any decentralized asset’s inherent value mostly depends on the value that the collective attributes to it (through trading on the DEX). The exchange of these dTokens are facilitated by blockchains and is thus just the logical next step towards an egalitarian financial system for all participants.

Advantages​

  • Easy access
  • 24/7 trading
  • Censorship resistant
  • Fractional ownership
  • Tax privileges
  • Stock Token Liquidity Mining

Disadvantages​

  • No real stock ownership
  • No dividend payments
  • Project risk