What Is BiFi (BIFI)?

What Is BiFi (BIFI)? Complete Guide Review About BiFi.

What Is BiFi (BIFI)?

Finance is the flow of money. Over the course of history, financial systems have evolved to efficiently allocate assets. However, these systems have also become increasingly centralized, capital concentrated and power consolidated. The advent of blockchain technology and Bitcoin opened a new way for assets to flow without a central authority, and the introduction of smart contracts and BiFi expanded the possibility of transacting without intermediaries. Yet for most of their existence, cryptocurrencies could only be sent or received. Other financial methods like trading, loans, and derivatives needed a centralized finance (CeFi) platform like an exchange to be the trusted custodian.

In recent years, decentralized finance (DeFi) has emerged as a system that tokenizes assets and automates the flow of assets with smart contracts—allowing crypto currencies to be traded, borrowed, leveraged, and hedged, according to decentralized protocols and without any intermediaries. BiFi can realize the potential of crypto currencies. As its potential becomes clearer, so do its limitations. Operational risks from price volatility and security vulnerabilities continue to be amended with new innovations. Yet the fundamental limitations of blockchains and DeFi stem from the lack of interoperability and scalability.

BiFi Storage Key Points

Coin BasicInformation
Coin NameBiFi
Short NameBIFI
Circulating Supply244,001,934.65 BIFI
Total Supply1,000,000,000
Source CodeClick Here To View Source Code
ExplorersClick Here To View Explorers
Twitter PageClick Here To Visit Twitter Group
WhitepaperClick Here To View
Support24/7
Official Project WebsiteClick Here To Visit Project Website

Lending Protocol

The lending protocol implements money markets for lending and borrowing, with pools of assets and floating interest rates algorithmically determined by the supply and demand for the asset. Compared to peer-to-peer lending, this pool-based approach allows improved liquidity, provides transparent interest rates, reduces speculative risks, and streamlines the lending process without the need for a counter party. It will ultimately allow users to deposit assets of one blockchain and borrow assets of another, without the risk of entrusting funds to centralized intermediaries.

BiFi Interest rates are determined algorithmically based on the supply and demand for the asset. If the amount of deposits in the market increases, the interest rates decrease, making borrowing more advantageous. If the amount of borrows increase, the interest rates increase, making depositing more advantageous.

Deposit

BiFi When users deposit their assets to the lending protocol, it is aggregated into a pool from which other users may borrow. Deposited assets accrue interest according to the deposit interest rate for that asset set by the supply and demand in the market. Unlike peer-to-peer lending, this pool-based approach allows users to withdraw their funds at any time. Like money market accounts in traditional banking, deposits allow users to earn interest on their idle assets with minimal risk.

Borrow

BiFi Once users deposit their asset, they can use their deposit as collateral to borrow another asset. Borrowed assets accrue interest according to the borrowing interest rates for the assets set by the supply and demand in the market for each asset. Unlike peer-to-peer lending, this collateralized approach allows users to borrow funds without specifying terms like maturity dates.

The maximum amount of borrowing users can do with their deposit is determined by the collateral ratio. For example, if a user deposits an asset worth 1,000 USD and with 80% collateral ratio, he or she can borrow up to 800 USD. Users cannot borrow more or withdraw deposits if that would bring the value of collateral exceed this ratio. To borrow more, they may deposit more or repay the loans to lower the ratio.

Staking Protocol

The staking protocol establishes liquidity pools, with pools of staked earning rewards
proportionately distributed to the liquidity providers, or stakers. The rewards are described in more detail in 5. Protocol Incentives. The staked liquidity will be the foundation for a decentralized exchange (DEX) that enables automated trading of different cryptocurrencies, or swaps. BiFi will pay fees for this decentralized trading, and stakers will proportionately share the fees generated.

Unlike centralized exchanges (CEX), DEX does not have a bid-ask spread and thus does not require market makers. It enables users to directly swap assets without a need for an intermediary, eliminating the risks associated with centralized exchanges such as fraud, hacking, and wash trading. The assets approved to be staked and to be rewarded with incentives are determined initially by BiFi and later by the governance committee.

Operators

The implementation of BiFi is designed to provide an increasingly accurate interest rates and reward allocation for each market as the number of actions increase. In order to optimize the transaction fee for users, they extract the computation process and allow others, i.e., operators to execute this process, to receive the incentives in return. Initially, BiFi serves as the operator of the protocol and later it will open this process to any users wishing to assist in operating the protocol.