Decentralized Asset Tokens or dTokens on DeFiChain are an entirely new and revolutionary form of crypto investments. These dTokens can be created (minted) by anyone on the DeFiChain blockchain, simply by first locking the blockchain native coin DFI (with the option to add up to 50% of the collateral 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 loan interest.
Currently, there are 16 available dTokens:
The liquidity mining rewards are distributed based on volatility and trading volume. This means that the DUSD pool, for example, will receive 50% of all available rewards, simply because it has such a high trading volume, whereas dTSLA will receive 10%, and less volatile assets together with a lower volume will receive even less.
Why these 16 dTokens?
The available dTokens have been chosen with the goal in mind to have a good representation of all asset classes, as well as those assets which have a high trading volume on other exchanges. Basically, they were chosen because they are most exciting and well-known.
Over time, many more dTokens will and can be added by the DeFiChain community.
In the next article, learn how it may be possible to double your money with Decentralized Assets.