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.

DFract is a community governed, debtless Protocol.

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, $OSMO, $JUNO 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

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.