Friday, June 2, 2023

DeFiChain’s Further Decentralization


By implementing a hard fork, DeFiChain underwent an upgrade dubbed the “Dakota Upgrade,” executed with block 678,000, March 1, 2021.

This upgrade was mandatory and required users to update their applications.

The Dakota Upgrade includes the following improvements:

  • The masternode collateral reduced from 1 million DFI to 20,000 DFI.
  • The anchoring system is under redesigning.
  • Fixing bugs, particularly the protection against price slippage during swaps.
  • Improved performance while staking.

Masternode Collateral Reduction

Since the last hard fork at the end of January, the masternode collateral reduction has been the most anticipated update. The DFIP #4 plan and its successful governance approval on January 11, 2021, laid the groundwork.

The masternode collateral will cut from 1 million DFI to simply 20,000 DFI to decentralize the network further. Also, the fee for creating a masternode will cut to merely 10 DFI.

Both decreases are due to DeFiChain’s desire to decentralize and stabilize the network by allowing more users to run masternodes.

Anchoring System Redesigning

The anchoring system and the refactoring process may be unfamiliar to the general public. As a result, the creators of DeFiChain would like to give the public some insight into what goes on behind the scenes.

By anchoring blocks on the world’s most robust blockchain, Bitcoin, DeFiChain improves its immutability. The cost of a reversal or “fork out” of mined blocks connects to the immutability of a blockchain. There must be a large sum of money and electricity to carry out such an attack, which widely considers as unchangeable. It would also take a long time to gather a critical mass of miners and minters.

While retaining a high level of immutability, DeFiChain strives to ensure decentralization quality. Every few blocks, DeFiChain ties its block to the Bitcoin network for this to happen, increasing DeFiChain’s rigidity without jeopardizing the chain’s decentralized nature.

One of the most exciting aspects of anchoring on DeFiChain is that anybody may help DeFiChain drop the anchor onto the Bitcoin network. The whole anchoring reward grows at a rate of 0.1 DFI per block, and the user who successfully assists DeFiChain will earn the said reward. This assures that the anchoring party can reclaim transaction costs on the Bitcoin blockchain, making it a financially sensible move that anybody, not just masternodes, may conduct.

There were also two bugs fixed in this release. While the first addresses an issue where slippage protection was not adequately engaged at periods when pool liquidity was low. The second addresses an issue where specific transactions were causing the blockchain to stall occasionally.

Performance Upgrades

A balanced enhancement is implemented to enable seamless operations on other blockchain capabilities such as wallets and DEX. The upgrade accommodated more widespread staking, particularly on desktop computers. Also, the update ensures that users would not miss out on potential rewards.

Miguel Garcia
Miguel Garcia
Miguel Garcia is a writer for Cryptoconstellation. Miguel has always been fascinated with Crypto. He has experience in Business and finance. Miguel loves sport cars and football.

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