The DeFiChain team believes that people have the right to fully control their finances; that is why its main goal is to make decentralised finance (DeFi) more accessible to everyone by bringing it to the number one cryptocurrency – bitcoin (BTC).
By doing so, DeFiChain promises to bring high production throughput, reduced risk of errors and intelligent feature development that will highlight Bitcoin’s original goal: to create a reliable alternative to fiat money.
The DeFiChain blockchain is powered by its native token, DFI, which was released on 11 May 2020 without an initial coin offering (ICO), and has since gained much momentum reaching its all-time high of $5.4767 on 5 December 2021.
The token got another boost at the start and end of 2021 amid the release of its mobile app and an announcement that it is 100% carbon neutral.
Despite the company dubbing 2021 as the “year full of great achievements”, the DFI crypto price fell by 55.8% since its all-time high in December to $2.42 at the time of writing (3 February 2022). What does the DeFiChain price prediction have in store for us for 2022, 2025 and 2030?
What is DeFiChain coin?
DeFiChain’s CEO and co-founder Julian Hosp explained that the DeFiChain Foundation truly believes that the future will be in decentralising and democratising finance.
As of 2019, the time when the Foundation was established, most DeFi was taking place on the Ethereum blockchain, according to the DeFiChain whitepaper. Hosp notes that DeFiChain wanted to change that by making DeFi easily accessible to more people by introducing it to the Bitcoin ecosystem.
This was achieved by building a second blockchain known as the DeFiChain on top of Bitcoin, which means that the DeFi blockchain needs its pioneering cryptocurrency brother to properly function.
By creating DeFiChain, its founders, Hosp and U-Zyn Chua, aim to solve a key problem that has emerged in the crypto community following its rise in popularity. Most crypto investments are limited to just purchasing and selling with the ability to invest the digital tokens being limited. Past attempts to create peer-to-peer lending and asset tokenisation have failed so investors have limited options with what they can do with their cryptocurrencies.
The solution to this problem was quite simple. DeFiChain is aimed at crypto investors who would like to use their digital assets just like any other form of capital by allowing them to lend, borrow, invest, exchange and save their tokens in a decentralised manner.
The blockchain itself operates on a non-Turing-Complete command designed specifically for the DeFi industry and uses a fully decentralised Proof-of-Stake mechanism that allows for fast transactions, high security, energy saving, big scalability, the ability to create a number of DeFi apps to be based on the chain, multi-token support and decentralised governance.
Along with this new chain comes its native token, DFI, which upon its release did not have an ICO, just like bitcoin. This meant that early supporters and users were airdropped DFI tokens which are used to finance a number of on chain transactions including:
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Payments for all transactions and smart contracts on DeFiChain
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Payments for lending loan interest payments
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Payments for borrowing crypto assets
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Payments for creating a DeFi custom token (DCT).
Upon release, around 600 million DFI tokens were issued with no more than 1.2 billion DFI available for circulation.
According to CoinMarketCap, out of the total supply of 588 million DFI tokens only 300 million are in circulation as of the time of writing (3 February 2022). DFI has a market capitalisation of over $730m (£539m) and a market rank of 213.
DFI tokens are only issued to DeFiChain users or partners with an interest in utilising and participating in the ecosystem.
As well as cooperating with bitcoin, DeFiChain also works with other cryptocurrencies including ethereum (ETH) and tether (USDT).
DFI crypto price: Latest drivers
DFI’s value started to pick up at the end of November 2020 when the company announced that it was planning to launch liquidity mining on 30 November. The DFI/USD value reached $1.3809 by 31 December 2020 after just having launched in May that year.
By 20 January 2021, the token was selling at $2.6862 – a 94.52% gain since its value at the end of December after DeFiChain published its Q4 transparency report for 2020 on 14 January. The press release underlined the year’s successes, which included DeFiChain becoming the largest DeFi protocol for bitcoin, the token being listed on Bittrex and its market capitalisation soaring past $800m and hitting number 40 on Coinpaprika.
The token’s price kept soaring as the blockchain introduced Dogecoin Liquidity Mining and rewards as well as increased its Litecoin Liquidity Mining rewards by 100x to 2 DFI per Block. By 9 May, DFI’s price jumped to $4.8683 – its second-highest value recorded to date.
Despite such positive developments, the token then plummeted by 62.45% to $1.8277 on 20 June regardless of the introduction of atomic swaps that allow users to trade cryptocurrencies between two blockchains without having to place reliance on any intermediaries. The shift in sentiment may be attributed to the wider slump in the crypto markets amid China’s crackdown on cryptocurrencies.
The price action moved higher to sideways trading between $1.8277 and $2.9939 until 9 November, when it reached $3.3949. This was followed by another major spike on 5 December when it soared to an all-time high of $5.4767 following the launch of the platform’s “most anticipated” Fort Canning update that introduced minting and trading of stock tokens on the blockchain.
Since the all-time high, however, the DFI/USD price continued to decline amid the wider shift in cryptocurrency sentiment and internal project’s issues. On 4 January 2022, for example, the blockchain’s technical team noticed an error in its atomic swap system. The announcement of the error forced the token’s value to drop by 26.51% within three days from $3.4954 on 4 January to $2.5686 on 7 January.
In recent DeFiChain news the project looked back at the “incredible” 2021. The token’s value grew by 20.91% to $3.1058 on 16 January but then started to decline once again reaching $2.42 as of the time of writing (3 February 2022).
Technical analysis provided by CoinCodex showed that short-term sentiment on the token was bearish, with 26 indicators showing bearish signals and two showing bullish signals.
DeFiChain future price: What’s to come in 2022?
In its 2022 outlook, the DeFiChain team noted that they will pay closer attention to future upgrades, which will be launched every few months, to avoid bugs and improve the blockchain. In the past upgrades lead to higher DFI values (as seen from the release of atomic swap and the Fort Canning update) and the trend could be anticipated to keep up.
The blockchain is also planning to launch on-chain governance meaning DFI miners will have more freedom over choosing which updates are implemented and which are not.
DeFiChain’s founder Chua added that in 2022, DeFiChain is preparing to launch a non-fungible token (NFT) blockchain support that has the potential to introduce tons of user-generated content and bring in more DFI miners, subsequently also raising the DFI crypto price.
Dr Pooja Lekhi, Professor of Global Financial Institutions at Risk Management Approach and Financial Management at University Canada West, told Capital.com that currently, DFI coin value is showing a downward trend which could be linked to the token’s high volatility since it is so closely linked to bitcoin.
“Crypto investors are still concerned about bans and new restrictions on cryptocurrencies. Recently, Russia’s central bank has called for a blanket ban on cryptocurrencies in that country,” she explained.
by Dr Pooja Lekhi, Professor at University of Canada West
“DFI is still showing high volatility for the past few days. It might have strong fundamentals, but we cannot predict that it will be a profitable investment in the short term,” Dr Lekhi added.
“In the long run, with more adoption and partnerships with other important blockchain networks, the price of DeFiChain might start to show a more bullish trend,” she concluded.
One of the most anticipated DeFiChain partnerships of 2022 is the addition of EVM, or Ethereum Virtual Machine, to its blockchain which is currently undergoing voting.
DFI forecast
Despite recent downward price action, algorithm-based forecasting service WalletInvestor gave a bullish DFI coin price prediction, calling it a “very good long-term investment”.
Based on its analysis of the cryptocurrency’s past performance, the forecasting service predicted that DFI could trade at $3.168 in 2023 and will surpass its December all-time high at $7.762 in 2027.
DigitalCoinPrice supported the bullish DeFiChain price prediction, seeing the coin reach $3.13 in December 2022. The coin’s price is estimated to surpass its all-time high in December 2026 at $6.5, according to the site.
Although a DeFiChain future price for 2030 is not currently available, DigitalCoinPrice estimated that the token could reach $8.1 in December 2028 and jump to $11.09 in the following year.
Invezz crypto analyst Milko Trajcevski noted that while the DFI crypto price is currently bearish, it could reach its $5 value by March 2022.
by Milko Trajcevski, crypto analyst at Invezz
“The all-time high of DFI was on 6 December 2021, at $5.61 ($5.4767 according to CoinMarketCap data), while it’s currently trading at $2.48 as of 3 February 2022,” Trajcevski told Capital.com.
“This means the token is $3.13 lower in value or by 55% than its all-time-high point, and with the rise of DeFi, it has the potential to get back to $5 by the end of March 2022,” Trajcevski added.
Note that analysts and algorithm-based price predictions can be wrong. Forecasts should not be used as a substitute for your own research. Always conduct your own due diligence before investing. And never invest or trade money you cannot afford to lose.
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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
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