As a Stablecoin Lover and Liquity User, I am so excited for the next two days.
On Sunday the 25th of September, the DeFi Franc will launch. Today, the MON Bootstrapping will be open for two days. In this article i want to tell you everything you need to know about the DeFi Franc (DCHF) and what i like about it.
The Defi Franc is a decentralized borrowing protocol that allows you to draw 0% interest loans against ETH and wBTC used as collateral. Loans are paid out in DCHF (a Swiss Franc pegged stablecoin) and need to maintain a minimum collateral ratio of only 110%.
The DeFi Franc protocol is a further developed version of the Liquity protocol (officially endorsed friendly fork) 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.
Following some highlights I am really excited about:
- The Swiss Franc
In a world full of USD stables, sth different, The DCHF is pegged to the strongest currency in history: The Swiss Franc (CHF). This also is really interesting for me because the US Government has no influence on it.
We all know what happened with USDC and Tornado Cash. Because every DCHF is freshly minted, the token is a lot more fungible than many alternative.
- 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.
- Yield Generating Collateral
You can deposit LP Tokens such as USDT-USDC-DAI-LP as collateral. Because you pay 0% interest, and LP Tokens increase in value, in a way, you get paid for taking out a loan.
You can increase your exposure to your favorite asset. ALSO to Yield Generating Assets such as the mentioned LP Tokens. If you 10x leverage a Stablecoin Pool that pays 10% yield, you would generate 100% annual yield.