The DeFi Franc
The Defi Franc (in short DCHF) is an overcollateralized stablecoin pegged to the value of one Swiss Franc. The decentralized borrowing protocol allows you to draw 0% interest loans against ETH and wBTC used as collateral. The protocol offers great capital efficiency thanks to a minimum collateral ratio of only 110%.
The DeFi Franc protocol is a further developed version of the Liquity protocol (one of the best DeFi projects out there) and their stablecoin LUSD. In comparison, the DCHF is pegged to the value of one Swiss Franc (CHF) instead of the USD, allows for more collateral types and is designed to support native leverage on crypto-assets and LP Tokens.
DCHF Contract: 0x045da4bfe02b320f4403674b3b7d121737727a36
- The Swiss Franc Pegged to the strongest currency in history: The Swiss Franc (CHF).
- Fungibility We all know what happened with USDC and Tornado Cash. Because the DCHF from the taken Loans are freshly minted, the token is a lot more fungible than other stablecoins.
- 0% Interest Rates Borrowing the DeFi Franc only costs a one-time borrowing fee of 0,5%. It offers 0% interest for the entire lifespan of your position.
- Multiple Collateral Types You can deposit ETH or wBTC as collateral to borrow the DCHF.
- Capital Efficiency A Collateral Ratio of just 110% ensures that you get the most out of your capital.
- Always Overcollateralized There is always more ETH or wBTC deposited as collateral than DCHF in circulation.
- Directly Redeemable DCHF can be redeemed at face value for the underlying collateral.
There are three different ways to earn money within the DeFi Franc ecosystem.
- Deposit ETH or wBTC as collateral, take a loan in DCHF and send that loan to work in various ways.
- Deposit DCHF in the Stability Pool and get ETH or wBTC at a 10% better price. Furthermore, you get MON as a reward.
- Stake MON and earn the borrowing and redemption fees consisting of ETH, wBTC or DCHF.
Stablecoins are an important backbone of the decentralized finance sector and hold a tremendous proportion of the value of the sector. However, almost every stablecoin is pegged to the US Dollar. A currency that has serious underlying issues, such as really high inflation numbers.
There is one currency which always thrives in bad economic times. It is considered a safe-haven and proved its strength time and time again: The Swiss Franc. This is why the DCHF is pegged to the value of one Swiss Franc (CHF).
Furthermore, the vast majority of stablecoins on the market are being issued by centralized institutions. Completely against the philosophy of decentralization, those institutions have the power to freeze, lock or issue tokens. What consequences this can have, did we see in the Tornado-USDC case.
This is the reason why the DeFi Franc Protocol is forked from Liquity - one of the most decentralized protocols on the Ethereum Blockchain. The DeFi Franc supports more collateral types than Liquity, such as wBTC, and will support native leveraging in the future.