# What is DFract? ## DFract Protocol **The DFract Protocol is a yield earning index** for the Interchain - a collection of sovereign blockchain networks communicating through the Inter-Blockchain Communication (IBC) protocol. It is built as a native part of Lum Network, a layer-1 blockchain protocol based on the Cosmos SDK. From a more technical perspective, DFract is a **Protocol Owned Liquidity** (POL). It means that all the assets provided by the users belong to the Protocol and the holders of the Protocol’s $DFR tokens. This is very different from many experiments in DeFi that were ultimately doomed by the debt they created. Moreover, decentralized governance enables fair participation for every stakeholder. {% hint style="info" %} **DFract is a community governed, debtless Protocol.** {% endhint %} In traditional finance (TradFi), indexes are used extensively to simplify the exposure to multiple assets. In a similar way, DFract encompasses the value of multiple assets, but more importantly, also generates staking rewards. Providing a DeFi solution that is comparable to a traditional index is important to make crypto more accessible to the next billion users. ## $DFR token $DFR is the Protocol’s native crypto-asset. Under the hood, the index is a weighted basket of assets such as [$ATOM](https://cosmos.network/learn/faq/what-is-the-atom), [$OSMO](https://osmosis.zone/), [$JUNO](https://www.junonetwork.io/) etc… from the Interchain. The DFract Protocol aims to turn the $DFR token into a unit of value for Cosmos projects. This token is a convenient way, with a low entry barrier, for its users to gain broader exposure to the appchains built with the Interchain StackCosmos. On top of the broad exposure, staking $DFR also gives users access to the rewards generated by the Protocol. What users get: * A simple experience * The knowledge of a community for an optimized return * A large amount of time saved on research, delegations and transaction processing * A token that yields a return in a passive way * A token that remains liquid on the secondary market with a value [backed by its underlying assets](https://whitepaper.dfract.lum.network/how-dfract-works#backing-price) ## The DeFi Cosmos index in a multichain world The multichain paradigm provides many benefits in terms of scale and sovereignty at the expense of simplicity and composability. The growing complexity is a hurdle to crypto mass adoption that DFract wants to solve within the Interchain. The thesis for building this product is three-fold: * Tremendous **value** can be captured on the Cosmos-SDK based network of appchains over the next decade * Elegant and simple **user experience** for any kind of user is a key success factor for crypto adoption * **Community-centric** projects will be more successful in the long run By connecting the dots, DFract was born to solve the current pain point experienced by a non-crypto user, or by a sophisticated crypto user looking for simplicity, that would like to be exposed to -- and support -- the Interchain growth while being rewarded for it.\ At the same time, the Protocol aims to have a positive impact for the community (the builders, the investors, the media professionals) that has been pushing the ecosystem so far.