Presenting vDfyn: Stake Dfyn & Earn Protocol Fees

Dfyn Network
7 min readSep 14, 2021

We are excited to announce the launch of vDfyn, Dfyn Network’s token with enhanced governance privileges. vDfyn represents a natural next step in the evolution of the DFYN network and is designed to align the Dfyn community’s interests with that of DFYN AMM more closely. In addition to distributing any fees captured by the AMM back to the community, the upcoming token is set to unlock a whole new set of opportunities for $DFYN holders, including revenue sharing from other DFYN product verticals such as the prediction markets. In addition to yield, vDfyn will also play a key role in the community voting and governance processes.

Dfyn Network has come a long way since we launched in May this year. And while the foundations for the development that Dfyn has experienced would not have happened without the work of our dedicated team, it is the Dfyn community that has been critical to the growth of our network. The same sentiment is also reflected in our tokenomics where the majority of the token supply is allocated for the community.

The idea behind vDfyn is to decentralize the protocol fees and ensure the protocol-fee is re-distributed to the Dfyn community. It was mentioned in our litepaper that the Dfyn token will be used for revenue-sharing and governance, and now we are finally getting around to implementing this key step.

With our governance forum and our first vote launch last week — we have made a fair bit of progress on implementing on the governance roadmap. vDfyn is a continuation of efforts on this front.

How does it work?

All swaps on the Dfyn exchange incur fees of 0.3% — out of which 0.25% goes to the liquidity providers and 0.05% goes to the Dfyn DAO. The idea here is to redistribute the 0.05% to the community members who wish to stake their Dfyn tokens.

Users will be able to stake their Dfyn tokens and mint vDfyn tokens. The vDfyn token will automatically earn users a share of protocol fees. 0.05% of the swap amount will be allocated to vDfyn holders and distributed proportionally between vDfyn holders. Because we are talking single-asset staking here, there will be no impermanent loss involved for those who are staking Dfyn tokens to mint vDfyn tokens.

vDfyn holders will be entitled to get all of the fees earned by the — including the fees from swaps and the prediction markets, as well as other products that are on the Dfyn roadmap. This means that the more users use the and the more fees are accumulated, the more vDfyn will appreciate. Therefore, vDfyn will almost always be worth more than $DFYN as it will accrue its value from platform fees, in addition to its market value.

vDfyn Interface Snapshot

The vDfyn roadmap & current thinking

Even after accounting for volatile crypto market developments, DeFi roadmaps are notoriously fickle. It is a fast-changing market, and no one really knows if today’s hottest new coin on the block will even be around in a few months. With that caveat out of the way, we will now attempt to elaborate on the current plan and thinking for vDfyn.

Stakers of Dfyn for vDfyn will be able to enter and exit staking vaults at any time. Dfyn will provide $DFYN holders with another, steadier revenue stream. With over $150 million in liquidity currently locked in the protocol, the handles an average of 70,000 transactions per day — on a slow day. This amount of network usage means that those holding vDfyn will be able to see the value of their assets appreciate even when the market is in the red, as the token’s price will appreciate according to network usage, not market movements.

Single asset vaults of Dfyn will soon be discontinued in order to dampen down that component of inflation and at the same time we are moving towards self-sustainable growth by introducing Dfyn vaults where rewards are entirely funded by the protocol fees. This reduces the emissions of Dfyn tokens while at the same time brings new utility for the token.

We’ve decided to structure vDfyn so that it can be used as a community governance token, granting its holders the power to vote in the decentralized autonomous organization (DAO) that the Dfyn Network will eventually become. vDfyn holders will have superior voting privileges when compared to those that are holding just $DFYN.

This comes from the recognition that those holding vDfyn will be the ones with the most skin in the game and the most invested in the network and want to give them the power to decide what next on the Dfyn roadmap.

Beyond the benefits of curbing inflation, and aligning community interests with the AMM’s interests, single-asset vaults have a few advantages:

  • They are foundational building blocks that truly leverage the composability of DeFi; vDfyn vaults can subsequently be used for lending, borrowing, staking, etc. with other products.
  • There is no impermanent loss, and the token becomes less of a ‘farming’ token that is continuously sold. The true utility use cases of the token shine through.

The vDfyn vault is live and please use for staking Dfyn and start earning your share of protocol fees today!

We would like to take the opportunity to once again thank the phenomenal Dfyn community for their dedication, support, patronage and guidance, and invite them to participate in the upcoming vDfyn program. Combined with other developments on the DFYN roadmap — expansion into some major chains, institutional trading tools, as well as the associated developments on the Router front, we are excited as we head into September and Q4 beyond; stay tuned for more product updates.


What is the ROI for staking Dfyn in vDfyn vaults?

It’s important to note that the APR in vDfyn vault changes continuously due to fluctuating trading volume on Dfyn exchange and the number of DFYN tokens staked in the vault. Therefore, it is difficult for us to present future predictions on its development. However, for those who want to know how to calculate the APR at a given moment in time, here’s the formula:

For example, the current APR 
= (5,412,630.580 * 0.05 * 365) / (220,480.41 * 0.57)
= 98,780,508.08 / 125,673.83
= 786.006%

Note: Prediction market fees will also be directed to the vDfyn vault in the future.

How frequently is the fees directed into the vDfyn vault?

The vDfyn maker contract converts fees to DFYN tokens and directs them as dividends to the vDfyn vault every 8 minutes.

Do I need to stake vDfyn tokens somewhere to accrue the dividends?

No, you don’t need to stake your vDfyn tokens anywhere. It will automatically accrue the dividends.

Can I enter and exit the vDfyn vault at any time?

Yes, your staked Dfyn are not time-locked, so you can claim them whenever you want.

Why is vDfyn worth around 11 Dfyn? I thought 1 vDfyn = 1 Dfyn?

Before directing any dividends to the vDfyn vault, 1 vDfyn is indeed equal to 1 Dfyn. However, after directing dividends to the vault, every vDfyn will correspond to a higher number of Dfyn tokens.

Let us consider the following example to understand the mechanism in a better manner: Alice adds 10 Dfyn to the vDfyn vault, corresponding to which the vault mints 10 vDfyn (1:1 ratio since no dividends have been pumped into the vault). Now, the vDfyn maker contract adds 100 Dfyn to the vault as dividends. At this point, Alice still holds 10 vDfyn, however the vault contains 110 Dfyn tokens. This means that now Alice can claim 11 Dfyn against each vDfyn that she holds. Now a new user, Bob, stakes 100 Dfyn in the vault. At this stage, 1 vDfyn corresponds to 11 Dfyn, so the vault will mint 100/11 = 9.09 vDfyn. At this point, say another 100 Dfyn are added as dividends to the vault. For the 19.09 vDfyn that are in circulation, there are now a total of 110 (earlier balance) + 100 (staked by Bob) + 100 (new dividends) = 310 Dfyn in the vault. Now, each vDfyn will correspond to 310/19.09 = 16.23 Dfyn.

Basically, the Dfyn/vDfyn ratio will not be affected when more Dfyn tokens are staked. The ratio will increase only when more rewards are directed to the vault since no vDfyn tokens are minted against the rewards that are added in the vault. This essentially means that users will always be able to claim more than or equal to the number of Dfyn tokens that they staked.

Is the contract code verified?

Yes, the contract code is verified and can be found here.

What is the contract address?


About Dfyn

Dfyn is a multi-chain AMM DEX currently functional on the Polygon network. Dfyn nodes on various chains act as liquidity entry and exit points into the cross-chain liquidity super mesh that is being enabled by Router Protocol.



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Dfyn Network

Dfyn is the world’s first on-chain limit order DEX. It combines the power of an RFQ matching engine with a concentrated liquidity AMM.