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DAFI Protocol Collaborates with Chainlink to Power New Incentivization Model for DeFi

DAFI Protocol and Chainlink are both two well known projects in the DeFi world. DAFI, a newly launched project, has partnered with many blockchain networks enabling DAFI’s synthetic tokens (dTokens) helping create engaged and sustainable communities and incentivizing early adopters by rewarding them later when network demand rises. Chainlink is a network that provides a bridge between real world data and smart contracts, and is the most widely used network to power universally connected smart contracts. Chainlink is maintained by a global decentralized community of hundreds of thousands of people and currently secures billions of dollars in value for smart contracts across the DeFi space. Today, Chainlink and DAFI protocol have announced that they will be joining forces to ensure DAFI provides a reliable service for DeFi projects looking to create a long-term token distribution model that rewards early participants without the pitfalls of hyperinflation. DAFI is designed to solve the growing problem of unbalanced incentives within the early stages of Proof-of-Stake protocols. Decentralized projects tend to distribute tokens to grow their network using various incentives like staking rewards, contribution bounties, and liquidity mining. The problem with this static incentive rate, however, is that it assumes the same level of demand at launch as 10 years into the future. While network governance can adjust these rates, the process can be subject to disingenuous actors looking to make fast money rather than build towards long-term sustainability, which usually results in hyperinflation and scarce funds for future development. Accomplishing an equilibrium between supply and demand requires a high-quality source of asset valuations and network volume, which are key to calculating accurate rewards. Zain Rana, Founder at DAFI Protocol, believes that an integration with Chainlink was impending because this is one of the most secure and fully-functional decentralized oracles solutions providers in the industry. It helps fetch data from premium off-chain sources and transmit it on-chain in a tamper-proof and highly reliable manner. “Accurate and tamper-proof data is critical to the proper functioning of our new rewards issuance model, which is why we selected Chainlink as our go-to oracle solution to secure its operation. Incentives are core to the entire decentralized space, and our algorithmic distribution model secured by Chainlink’s decentralized data feeds opens up a new type of token distribution mechanism that creates much needed long-term incentives for supporting decentralized networks that succeed in becoming widely adopted,” said Zain. Daniel Kochis, Head of Partnerships at Chainlink, maintains that the new integration could benefit the entire DeFi sector as DAFI will have high-quality asset prices and volume metrics available on-chain to its new rewards model. The collaboration will essentially enable DAFI to create innovative ways to fairly and transparently incentivize long-term project growth. “This integration allows DeFi users to leverage DAFI’s algorithmic rewards system with the assurance that the data underpinning the protocol is secured by the industry’s proven standard for accurate, tamper-proof data,” said Kochis. Moreover, DAFI recently added support for Chainlink’s native token, LINK, in its first synthetic application dubbed Simulate. The integration enables users to create dLINK tokens, which are pegged to the underlying asset’s value and demand. Such features set the foundation for further expansion of the collaboration between Chainlink and DAFI. Disclaimer: This article is educational and does not represent financial advice. Please consult your financial advisor before purchasing any digital assets. See more from BenzingaClick here for options trades from BenzingaSpark Networks Stock Tumbles On Missing Q1 Earnings, Q2 Guidance Falling Short Of ConsensusDVD Rental Company Redbox Going Public Again In SPAC Merger: What Investors Should Know© 2021 Benzinga does not provide investment advice. All rights reserved.