DeFi For You. | Technical Chapter| What case DFY tokens can be used for?

17 min readJan 11, 2021

DeFi For You. | DFY token | Technical Chapter| What DFY tokens can be used for?

WHITE PAPER — DeFi For You.™ Technical Document

8 DECEMBER 2020

#DFY — DeFi For You.™

INTRODUCTION

In this white paper, we will explain the profound benefits and our way to make them happen. This is year 2020 and DeFi hasn’t even started. Our vision is bold.

Our Mission to build a unique and groundbreaking service platform that gives our users the opportunity to purchase goods and financial services online using the #DFY blockchain token. The #DFY token is LIVE already today and works on both the legacy blockchain (Ethereum ERC-20) as well as on the just new state-of-the-art blockchain Binance Smart Chain™ (BEP20 which is 100% code compatible with the Ethereum blockchain ERC-20). #Binance DeFi software base protocol has exceeded our expectations from both quality and performance perspective. The migration from ERC-20 is seamless. As Ethereum struggle with scaling and may do for a few years to come, we expect the Binance Smart Chain™ to become a Ethereum “killer from a technical and

a d o p t i o n p e r s p e c t i v e . There are 3 standards of DeFi tokens, BSC = Binance Smart Chain™ (BEP20), this is t h e b a s e

protocol where we build smart contracts on. There will be two token standards for the DEX trading (BP2 and BP8).

Over time we will more than likely run a combination of the two.

You can purchase the #DFY token and hold in your “Trust Wallet”.

We have selected the “Trust Wallet” which you download at the Apple© AppStore™ or Google™Play (https://trustwallet.com/.

We support Binance™ and have great experience with the #TrustWallet.

The #DFY token is not available for public purchase until launch of the DeFi For You.™ platform. The DeFi For You.™ corporation and holding company NxLux Club Limited is based in Vietnam.

The #DFY token is already in live operation. Final verification was completed in September 2020 . You can hold your #DFY Tokens in your #Trust wallet (downloaded from Apple or Google Play). You will not be able to transfer your #DFY tokens from your wallet until final software protocol verification has been completed.

DeFi For You.™ — #DFY Token Distribution

The initially issued and sold ERC-20 tokens will automatically be transferred over to the Binance Smart Chain™ (#BEP20 blockchain).

Total amount of #DFY tokens issued (100%) = 1 billion;

• #DFY Tokens released to seed investors (5%) = 50 million

• #DFY Tokens available for sale (30%) = 300 million

• #DFY Tokens available for R&D, marketing and cost of sales (30%) = 300 million

• #DFY Tokens available for team, founders and future hires (15%) = 150 million

• #DFY Tokens Locked in DeFi For You.™ Treasury for 5 years by smart contract (20%) = 200 million

Demand for DeFi quality assets is increasing rapidly. We are expecting a significant demand from a market looking for quality DeFi token investments. DeFi For You.™ and #DFY lead the future of DeFi using #Binance blockchain technology.

REAL CUSTOMER VALUE DEFI FOR YOU.™

Taking a loan against collateral, with conditions closely tied to your reputation, has been around for a millennium with surprisingly little change.

Someone with no collateral and no reputation will probably not get a loan at all, if they do, it will be at a huge interest rate. From that baseline, conditions can be improved in two dimensions as follows;

1. Providing better collateral

• Collateral => Average conditions.

• A stable collateral => Good conditions.

• A stable an easy to repossess collateral => Excellent conditions.

2. Proving a better reputation

A good reputation of the lender => better conditions.

Loan Conditions — Zero Collateral -Average Collateral-Good Collateral

No reputation= Very Poor- Poor-Average

Average reputation= Poor- Average- Good

Good reputation: Average-Good-Excellent

Smart contracts introduced a rare improvement in that the collateral can be trivially repossessed, in fact extending the dimension 1 with a fourth level:

• Ideal collateral => ideal conditions

When cryptocurrencies are used as collateral, in combination with a smart contract, a collateral is created that is both value transparent, trivially and instantly repossessed.

In fact, this collateral is so good, that the reputation of the lender no longer matters. In the first phase of DeFi, this 2000-year-old-principle suddenly collapsed into:

Loan Conditions

Zero Collateral

Ideal Collateral

No reputation

No loan

Good

Average reputation

No loan

Good

Good reputation

No loan

Good

With smart contracts using market data oracles and cryptocurrencies as collateral, the value said collateral can be assessed in real time, unlike in traditional finance where e.g. the value of a property that can be rather uncertain e.g. during times of financial crisis. An oracle in blockchain context just means a system that interfaces oﬀ-chain data such as trading information from a centralised exchange to the blockchain world.

Further, smart contracts enabled that cryptocurrency collateral to be instantly and trivially repossessed should the value fall below the threshold where the collateral no longer covers the loan. Again, compared to a property as collateral, this is a huge improvement.

Further, smart contracts enabled that cryptocurrency collateral to be instantly and trivially repossessed should the value fall below the threshold where the collateral no longer covers the loan compared to a property as collateral, this is a huge improvement.

As a result of these risk mitigating and operational advantages, suddenly a whole industry of “DeFi” emerged, where entities could oﬀer loans far at far better conditions than has ever existed in the traditional loan industry and with no requirement for credible reputation for the lender.

Initially, many critics claimed the entire DeFi space is a scam for oﬀering such “unsustainable conditions”, without understanding that there is a fundamental advantage over the traditional loan system, enabled by smart contracts as explained. While many initial projects were no doubt simple cash grabs, there is a genuine systematic eﬃciency and risk mitigation advantage enabled by this technology that manual traditional handling can never do, that is why better conditions can be oﬀered. People who have claimed that “crypto and DeFi is a Ponzi” have not taken the time to understand this in our experience.

While this 1st phase of DeFi no doubt is one of the few huge inventions to this sector in two millennia, providing enormous and genuine value to millions of people already, we believe it can be taken to Phase 2 already now.

In our opinion, the concept of Reputation has not become irrelevant, it is a fundamental principal of humanity, spanning probably 100,000 years back and it will not go away.

DeFi For You.™ is an initiative to combine the innovations of DeFi Phase 1 with a new blockchain based reputation system and a few elements from the traditional lending and pawn world, creating a new complex as follows:

DeFi For You.™

๏ Competing loan providers on a transparent market

๏ Lender reputation system, irrefutably stored, updated and viewable on the blockchain

๏ Cryptocurrencies as loan collateral

๏ Physical assets as loan collateral

๏ Smart contract to enforce and administer loan repayment

Credit is one of the key enablers to modern society. One of our idols, Swedish industry legend Percy Barnevik, spent most of his later part of his life eliminating poverty in entire regions of the world with micro loans as the only tool.

Unfortunately, such funding and dedication is in short supply. Eventually even Mr. Barnevik’s fortunate ran out and in an interview he said that he wished he had made more money, so that he could have helped more people. (No aﬃliation, we are just fans.)

Without such initiatives, credit remains completely out of reach or available with only poor conditions to the majority of the world population today, not just in 3rd world countries, but also in the most advanced societies.

In fact, it is at a point where people with a good reputation and collateral to oﬀer in advanced societies, still cannot get good loan rates because much of the traditional finance is stuck with a view where a life-long 9-to-5 job is expected, with modern work setups in the gig economy and social media being frowned upon as “not real jobs”.

Some FinTech companies have already begun disrupting this space by using other indicators than 9-to-5 salary to assess the likelihood of loan repayments, especially in China where apps like WeChat provide a gold mine of data with little privacy concerns.

For example, it has been found that people who answer the phone are more likely to repay a loan than people with a lot of missed calls. By combining 20 or so indicators, loan conditions can be set with great success.

We believe these ideas can be improved upon using smart contracts and the irrefutability and immutability of the distributed ledger (blockchain).

We believe better loan conditions can be oﬀered to lenders, at the same time as oﬀering higher profitability for the lenders.

We believe in creating a more inclusive credit system for the modern world.

We believe access to credit is one of the most important tickets to success today.

Most “crypto projects” don’t need a token or a smart contract. DeFi For You.™ is uniquely enabled by smart contracts and cannot be built without one.

IN SUMMARY

We have created a decentralised loan economy on the blockchain, whereby the irrefutable reputation of the individual as verifiable on the public ledger (blockchain) is combined with type and terms of collateral to create a bid and ask economy setting the interest and terms of loans.

This is true decentralised finance. A traditional financial loan is inflexible and inaccessible to most people on earth. Blockchain has proven that there is a working use case in decentralising such financial services.

However, blockchain also comes with anonymity and trust-less, limiting the types of loans that can be issued, because in reality, some people are more likely to pay back a loan than others.

Trust and reputation still matters. DeFi For You.™ (#DFY) solves this, by moving an irrefutable, verifiable reputation system onto the blockchain and tying it together with the decentralised finance that during 2020 has become a massive industry worldwide.

BUILT ON BINANCE© SMART CHAIN™

DeFi For You.™ has chosen to implement our protocol and smart contract on Binance Smart Chain, BSC.

BSC has the following characteristics:

• Compatible with the Ethereum Virtual Machine (EVM) and the Ethereum programming language Solidity, which opens to the largest ecosystem of developers, libraries, tools and know-how.

• Faster, Cheaper and better scalability than Ethereum because it relies on a variant of Proof-of-Stake called Proof of Staked Authority (PoSA) where there are a limited number of validators (up to 21) but anyone can stake BNB to become a validator.

• Blocktime 3–5 seconds

• Uses BNB for gas

Opponents of BSC could claim Binance Smart Chain it is less decentralised than Ethereum, but in our opinion it is decentralised enough and because of the higher speed, lower cost and better scalability, it works.

If we bring hundreds of millions of new users onto Ethereum with this application, Ethereum of today won’t work. While there are excellent improvements coming in ETH2.0, and ETH2 Phase 1 is soon here, many of the other improvements are still years away.

We are not here to win a philosophical argument but to build a working product that provides real world value to millions or even billions of people and we can’t risk building that on a platform that might not scale to handle it in the timeframe we need it.

BSC also has other benefits, e.g. the DFY BEP20 token could also be paired with a corresponding BEP2 token on the Binance Chain BC, where sub second block finality is accessible.

BC adds the following key characteristic:

• Blocktime <1 second

OUR IMPLEMENTATION

DFY Token Phase 1, BSC-BC Cross Chain

The DFY token implements the following requirements:

• The token is issued as a BEP20 and BEP2 Cross-Chain compatible token on the Binance Smart Chain (BSC) blockchain and on the Binance Chain (BC) blockchain.

BEP20 BSC Domain:

• Public token tracker, BSC: https://bscscan.com/token/0xd98560689c6e748dc37bc410b4d3096b1aa3d8c2

• Contract address: 0xD98560689C6e748DC37bc410B4d3096B1aA3D8C2

• Symbol: DFY

• Decimals: 18

• Max supply: 1,000,000,000 — in total BEP20+BEP2

• Initial supply: 1,000,000,000

• Additional minting possible in smart contract: No

• Initial circulating supply: 350,000,000

• The DFY phase 1 token code is based on the much trusted-

and-tried Solidity ERC20 template of of https://github.com/vittominacori adopted for BEP20.

• The DFY phase 1 token is open source available on https://github.com/defi-vn

• In a previous iteration, the team built the token as an ERC20 token on Ethereum, before migrating to BSC. Users received the equal number of DFY tokens by airdrop.

BEP2 BC Domain

• Public token tracker: https://explorer.binance.org/asset/DFY-EA0

• Symbol: DFY

• Additional minting possible in smart contract: No

Take note of the “Cross-Chain” badge on the first public token tracker link above. Each tokens can at any point of time exist either as a BEP20 token on the Binance Smart Chain, BSC or as a BEP2 token on the Binance Chain, BC (but not at the same time).

The Cross Chain capability enables the token to take advantage of both the EVM smart contract code execution on BSC and the 1 second block time of BC. Users can easily convert between the two modes inside e.g. the Trust Wallet app in an easy-to-use GUI and can easily keep some of the tokens in BEP20 BSC space and some tokens in BEP2 BC space, within the same wallet.

For the technically inclined, the mechanics of the conversion between BEP20 and BEP2

can be monitored for the ecosystem here:

BEP20 BSC Token Hub:

https://bscscan.com/address/0x0000000000000000000000000000000000001004

For example under:

https://bscscan.com/token/0xd98560689c6e748dc37bc410b4d3096b1aa3d8c2#balances

Take note of the holder “BSC: Token Hub”. That is the system contract that hold tokens sent to BEP2. It is also from where BEP20 tokens will be returned when a user converts from BEP2 back to BEP20.

Custom Token Functions DFY Token Phase 2 Reputation DeFi Loan — PAWN Use Case

This set of requirements creates a decentralised loan economy on the blockchain, whereby the irrefutable reputation of the individual as verifiable on the public ledger

(blockchain) is combined with type and terms of collateral to create a bid and ask economy setting the interest and terms of the loan.

DF.301 — All custom token functions for the DeFi Loan — Pawn Use Case shall be issued in Solidity on the Binance Smart Chain blockchain.

DF.302 — Revisions of the smart contract code shall be enabled using the Upgrades Plugin from OpenZeppelins, https://github.com/OpenZeppelin/openzeppelin-upgrades

DF.303 — The custom functions for the DeFi Loan — Pawn Use Case shall initially be built as a separate smart contract revision on TestNet.

DF.304 — Following a period of stability and active usage, the separate smart contract for DeFi Loan — Pawn Use Case can be merged with the DFY BEP20 token, following a migration procedure to be exactly defined at a later date.

DF.305 — The smart contract shall have a function for issuing a Collateral Proposition, whereby the customer oﬀers an item as collateral for a loan, recorded on the blockchain.

DF.306 — The smart contract shall have a function for responding to a Collateral Proposition with a Loan Oﬀer, whereby a loan provider oﬀers conditions for the loan. Conditions shall include as minimum: Collateral Reference, Collateral Type, Interest, Duration. The loan provider will typically take the reputation value of the prospective customer into account. It is up to the loan provider what algorithm to use based on that input and other parameters, meaning oﬀers to the same collateral propositions from diﬀerent loan providers will typically vary.

DF.307 — The smart contract shall have a function for accepting a Loan Oﬀer, whereby the customer accepts the Loan Oﬀers. After acceptance two things shall happen as a

single transaction, the collateral oﬀered shall be locked, and the loan shall be issued in cryptocurrency.

DF.308 — The collateral can be a physical item and the data stored on the blockchain is a legally binding agreement. It is up to the loan provider to set the terms of the loan, taking aspects such as default risk and ability to enforce the agreement into account. Typically the ability for the loan provider to collect the collateral could be uncertain, hence a higher interest loan could potentially be oﬀered.

DF.309 — The collateral can be a physical item and the customer needs to deposit the item at a designated partner facility. The data stored on the blockchain in this use case will be the deposit slip and the agreement. It is up to the loan provider to set the terms of the loan, taking aspects such as default risk and ability to enforce the agreement into account. Typically the ability for the loan provider to collect the collateral would be good in this use case, hence a lower interest could potentially be oﬀered.

DF.310 — The collateral can be a legally binding transfer, such as transfer of car or property ownership to the loan provider, whereby the data stored on the blockchain is a legally binding agreement. It is up to the loan provider to set the terms of the loan, taking aspects such as default risk and ability to enforce the agreement into account. Typically the ability for the loan provider to collect the collateral would be good in this use case, hence a lower interest could potentially be oﬀered.

DF.311 — The smart contract shall have a function for repayment of the loan, in part or full. If repaid in full, the transaction is ended and the reputation system is updated accordingly.

DF.312 — The smart contract shall have a function for handling loan defaults, at which point the transaction is ended and the reputation system is updated accordingly.

DF.313 — A reputation system for loan providers shall be built on the blockchain, where anyone can validate its validity. The reputation system shall be centrally visible for all DeFi Loan use case flows.

DF.314 — A reputation system for customers shall be built on the blockchain, where anyone can validate the validity of the credibility score on the public blockchain. The reputation system shall be centrally visible for all DeFi Loan use case flows.

DF.315 — To qualify as a loan provider, a minimum number of DFY tokens needs to be held in the loan provider’s wallet connected to the person’s reputation score.

DF.316 — A percent of profits generated by the loan provider is deducted by the smart contract as a “gas fee” to run the decentralised DeFi For You.™ network whereby the smart contract uses these funds to perform an automated buy-back and burn of DFY tokens from the (at the time) dominating “UniSwap type” decentralised liquidity provider for BSC20 tokens. This creates a long term value from holding DFY tokens.

Custom Token Functions — Reputation DeFi Loan

Cryptocurrency Use Case

This set of requirements creates a decentralised loan economy on the blockchain, whereby the irrefutable reputation of the individual as verifiable on the public ledger (blockchain) is combined with cryptocurrency collateral to create a bid and ask economy setting the interest and terms of the loan.

DF.401 — All custom token functions for the DeFi Loan — Cryptocurrency Use Case shall be issued in Solidity on the Binance Smart Chain blockchain.

DF.402 — Revisions of the smart contract code shall be enabled using the Upgrades Plugin from OpenZeppelins, https://github.com/OpenZeppelin/openzeppelin-upgrades

DF.403 — The custom functions for the DeFi Loan — Cryptocurrency Use Case shall initially be built as a separate smart contract.

DF.404 — Following a period of stability and active usage, the separate smart contract for DeFi Loan — Cryptocurrency Use Case can be merged with the DFY BEP20 token, following a migration procedure to be defined at a later date.

DF.405 — The smart contract shall have a function for issuing a Collateral Proposition, whereby the customer oﬀers cryptocurrencies as collateral, recorded on the blockchain.

DF.406 — The smart contract shall have a function for responding to a Collateral Proposition with a Loan Oﬀer, whereby loan provider oﬀers conditions for the loan. Conditions shall include as minimum: (Over-)Collateralization ratio, Interest, Duration. The loan provider will typically take the reputation value of the prospective customer into account. It is up to the loan provider what algorithm to use based on that input and other parameters, meaning oﬀers to the same collateral propositions from diﬀerent loan providers will typically vary.

DF.407 — The smart contract shall have a function for accepting a Loan Oﬀer, whereby the customer accepts the Loan Oﬀers. After acceptance two things shall happen as a single transaction, the collateral oﬀered shall be locked, and the loan shall be issued in cryptocurrency.

DF.408 — Any BEP20 compatible cryptocurrency shall be supported as collateral, including BEP20 wrapped Bitcoin.

DF.409 — A set of BEP20 compatible cryptocurrencies shall be available as loan currency, including BUSD, BEP20 wrapped Bitcoin and BNB.

DF.410 — The smart contract shall have a function for liquidating the cryptocurrency collateral based on the agreed collateralization and other terms.

DF.411 — The smart contract shall have a function for repayment of the loan, in part or full. If repaid in full, the transaction is ended and the reputation system is updated accordingly.

DF.412 — The smart contract shall have a function for handling loan defaults, at which point the transaction is ended and the reputation system is updated accordingly.

DF.413 — A reputation system for loan providers shall be built on the blockchain, where anyone can validate its validity. The reputation system shall be centrally visible for all DeFi Loan use case flows.

DF.414 — A reputation system for customers shall be built on the blockchain, where anyone can validate the validity of the credibility score on the public blockchain. The reputation system shall be centrally visible for all DeFi Loan use case flows.

DF.415 — To qualify as a loan provider, a minimum number of DFY tokens needs to be held in the loan provider’s wallet connected to the person’s reputation score.

DF.416 — A percent of profits generated by the loan provider is deducted by the smart contract as a “gas fee” to run the decentralised DeFi For You.™ network whereby the smart contract uses these funds to perform an automated buy-back and burn of DFY

tokens from the (at the time) dominating “UniSwap type” decentralised liquidity provider for BSC20 tokens. This creates a long term value from holding DFY tokens.

The Access Gateway

The DFY smart contract and its token creates a decentralised economy. The DeFi For You.™ company or its founders does have any monopoly access to a public smart contract. On the contrary, we want to encourage more parties to create websites, apps and other gateways into this new decentralised economy.

We will simply build an open source reference interface in the form of a website accessing the decentralised smart contract, which other developers can use as template in creating their own frontend.

DF.501 — The reference interface shall oﬀer a search and alert function for loan providers to find Collateral Propositions published on the blockchain.

DF.502 — The reference interface shall oﬀer the loan providers the ability to publish a Loan Oﬀer on the blockchain in response to to a Collateral Proposition.

DF.503 — The reference interface shall oﬀer a search and alert function for customers to find Loan Oﬀers published on the blockchain issued in response to their Collateral Proposition.

DF.504 — The reference interface shall oﬀer a function to accept a specific Loan Oﬀer on the blockchain and thereby reject competing Loan Oﬀers.

DF.505 — The reference interface shall oﬀer functionality for informing both parties of a liquidation event on the blockchain.

DF.506 — The reference interface shall oﬀer functionality for handling repayment of the loan, in part or full.

DF.507 — The reference interface shall oﬀer functionality for informing both parties of a loan default event on the blockchain.

DF.508 — The reputation of the loan provider shall be centrally visible on the reference interface for all DeFi Loan use case flows.

DF.509 — The reputation of the customer shall be centrally visible on the reference interface for all DeFi Loan use case flows.

DF.510 — The reference interface shall guide the loan provider through the process of depositing the required number of DFY tokens into the loan provider’s wallet connected to the person’s reputation score.

DF.511 — The reference interface shall oﬀer complete accounting per transaction, including the the buy-back and burn of DFY tokens contributed by the transaction.

DF.512 — The reference interface shall be released as open source code on GitHub.

DF.513 — The reference interface open source documentation shall describe how each of the custom token functions shall be accessed.

DF.514 — There shall be no proprietary codes or secrets in the reference implementation, meaning anyone shall be able to call decentralised economy smart contract functions directly for a new type of truly decentralised, credibility based, world-wide loan economy on the blockchain.

Discussion on “Anonymized Reputation Systems with Zero Knowledge Proofs” — The First Real Application?

In his Endnotes on 2020, Vitalik Buterin wrote: “we’re increasingly moving toward anonymized reputation systems with zero knowledge proofs” https://vitalik.ca/general/2020/12/28/endnotes.html

There has been a few discussion papers, articles and implementations on the topic of

reputation systems on blockchain over the years. A few notable are:

https://manishearth.github.io/blog/2016/08/14/fun-crypto-problem-designing-an-

anonymous-reputation-system/

https://ethresear.ch/t/anonymous-reputation-risking-and-burning/3926

https://github.com/barryWhiteHat/semaphore

https://eprint.iacr.org/2018/835.pdf

The central component of the Pawn / Loan system described and being implemented by the token is the anonymized reputation system.

It is a non-trivial problem to solve, but it is solvable, as the article authors above realized years ago. However, to our knowledge, it has not been put to real use yet. We hope DFY will make be the first application that takes this idea to its full potential and to scale.

We wish to make the continuous refinement and extension of the reputation related requirements a key community mission.

DeFi For You. | Technical Chapter| What case DFY tokens can be used for?

Written by DeFi For You