Oct 30, 2020

7 min read

Introducing Demodyfi

A decentralized, cross-chain protocol powering the future of crypto finance asset exchange, powered by Polkadot.


Problem context

The Ethereum network fees are skyrocketing and slow performances are often seen, which leaves end-users frustrated as witnessed during the Defi hype. Ethereum is still congested and cost efficiency & scalability challenges are driving projects to build on other chains. However, strong and purpose-built blockchains outside of Ethereum remain heavily underutilized and are dominated by the size of the overall cryptocurrency market space. Cross-chain communication with ecosystems like Polkadot has emerged as a major challenge and an opportunity to unleash massive liquidity and asset variety into the decentralized finance space.

Framework & Architecture

The Demodyfi protocol utilizes Moonbeam’s parachain smart contract interoperability while the Substrate framework serves as a fundamental layer. Combining this makes it potential to build on Polkadot, furthermore make it compatible with the EVM, and to deploy EVM-based bytecode compiled from Solidity using tools available from the Ethereum stack.


  • Build a UI that is accessible for the beginner as well as for advanced users.
  • Using Polkadot’s advanced substrate technology to create its own blockchain.
  • Focused on market segmentation with all DeFi needs in one place.
  • Collaborated decentralized liquidity pools, enabling cross-chain lending for ERC 20 and ERC 721!
  • Advanced price discovery by implementing price oracles.
  • By utilizing parachain interoperability from Moonbeam, Demodyfi is able to bring in liquidity cross-chain.


Non-custodial: Demodyfi allows users complete control over their funds. Thus, the risk associated with centralized exchanges, where one can lose his funds if the exchange gets hacked or goes bankrupt, is completely absent.


The mechanism is predicated upon a digital token called $DMOD, designed to provide traditional financial products and services without the centralized authority of banks and financial institutions. The token is distributed as a reward for contributions made to the platform and provides access to a variety of economic incentives. The token allows its holders to participate in decisions affecting the parameters of the system.

  1. Fee discounts — Nobody enjoys paying exorbitant fees to trade on Uniswap. In addition to the existing fee, savings will be available to Demodyfi users, DMOD token holders will get additional fees discount of up to 5% to use Demodyfi.
  2. Staking — A part of the fees collected from the Demodyfi protocol will be used to buy DMOD tokens from the market. These tokens will be distributed to the DMOD token staking holders.
  3. Trading fees — We all know Uniswap liquidity providers earn 0.3% of the trading fees. Demodyfi protocol implements off-chain data with mid-market price, the staleness of that price, and the historical volatility which will reduce slippage and save trading fees.
  4. Token burn — DMOD is a deflationary token, 10% of the fees collected will be used to buy DEMO tokens from the market and burned.
  5. Liquidity mining — Liquidity mining of DMOD tokens when you trade on Demodyfi. Hold the tokens to get discounts, stake them to earn reward from the protocol.
  6. Governance — Its mechanism for swap and governance is predicated upon a digital token called DMOD that allows its holder to stake/participate in decisions affecting the parameters of the system. DMOD token is distributed as a reward for contributions made to the platform and provides access to a variety of economic incentives.


Simplicity is key (MVP Perspective)

The Demodyfi system is designed to on-ramp both entry-level and advanced users. Throughout this context, we are able to respond to the actual preferences of the target audience by providing the same ease of use as centralized platforms. Connecting DeFi and our use case is the mission. Creating transparency between our use case and blockchain simplicity is our goal by making the platform accessible for all user-segments with no super-advanced user interface, but with something which feels familiar to its user and space.‌

  • Create incentives by rewarding users for providing liquidity and creating circulation under the Demodyfi protocol.
  • Lower the threshold and make the network accessible to everyone, from basic to advanced.
  • Scalable — Next-gen DeFi platform by the Multitude of assets existing on numerous chains.
  • Cost reduction — By building on top of the Polkadot architecture we are creating virtually limitless composability between blockchains. The real benefit of this is that we are able to scale economically in volume for transactions which leads to lower costs.
  • Permissionless — Any new token can directly access liquidity through adding their token for an exchange to the router contract
  • Circulation — Liquidity providers can benefit from contributing liquidity to liquidity pools.
  • On-time transactions — With the Polkadot ecosystem, we are able to accelerate the speed process for transaction validation.

A Final Word

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