The y's derivatives markets – consisting of individual securities or a basket of assets like stocks, bonds, commodities, currencies, indices, and more – is a behemoth as far as value goes, being estimated to be worth at least $1-quadrillion globally. That's $1,000,000,000,000,000, to be exact. So, just imagine how monstrous of an impact it might make for us blockchain and cryptocurrency enthusiasts if we could tokenize all – or even some – of derivatives á la our DEUS Finance review.
By moving even a tiny fraction of the derivatives market onto the blockchain, the ripple effects would mark a watershed moment for the new age of decentralized finance (DeFi). That then shows the significance of what DEUS Finance wants to accomplish. As a fairly new entry into the ever-expanding DeFi ecosystem, DEUS Finance lets anyone tokenize anything which could have an underlying value, essentially creating a virtual copy of a real-world asset or even a whole set of assets altogether.
It opens up a whole new realm of possibilities where every single user has the power to create, buy, sell, or exchange digitalized derivatives – each tokenized to give them value – within a completely decentralized and trustless network, thanks to DEUS Finance. Imagine trading virtual copies of real-world stocks that mirror their performance in real-time. So, read along our DEUS Finance review to learn more about why we're beaming with excitement over what they bring to the DeFi universe.
What Is DEUS Finance?
DEUS Finance was founded quite recently, with the initial launch of its primary DEUS Swap platform on September 12, 2020. Created as a fully decentralized investment platform, DEUS Finance essentially lets anyone trade or even create their own tokenized assets. Plugging into data and pricing feeds powered by specialized oracles from Zoracles, users could theoretically be able to tokenize anything, whether it's digital-native assets such as cryptocurrencies or traditional assets such as stocks.
By building a completely transparent, secure, and trust-less DeFi-based protocol, DEUS wants to bring synergy between digital and conventional assets, thus allowing cryptocurrency investors and enthusiasts to seamlessly trade with and diversify to real-world assets. Users can even create baskets composing a mixture of crypto and non-crypto assets. These tokenized assets are then represented by their own ERC-20 token, where the value of assets is pegged 1:1 with their real-world equivalents.
Built on the Ethereum blockchain, DEUS Finance is aiming to lower the barrier of entry along with reducing the costs and inefficiencies associated with traditional derivatives. On DEUS, there is no need for users to give up personal data to comply with KYC or AML regulations, and by leveraging the smart-ness of DeFi such as smart contracts to cut out the middlemen. DEUS is noticeably different from platforms like FTX, which also allows for tokenized real-world assets, as DEUS is not a centralized entity.
What Makes Trading on DEUS Finance Any Different?
There are already other blockchain-powered platforms that offer their users the option to create and trade synthetic assets. But one of the key differences that separate it from platforms such as FTX is that DEUS Finance uses its own specialized automated market maker (AMM) for facilitating the actual trading of those synthetics. This is different from the regular order-book style of exchange, where users will have to trade with each other to match other users' prices.
Instead of having to match their buying prices to other users' selling prices on the order book, an AMM allows the use of algorithms to adjust the value of a certain asset. The primary advantages are that users can expect greater ease of use when trading these assets, with better and more accurate pricing, while also being saved from significant price slippage or volatility for assets that have lower liquidity. DEUS Finance uses oracles to supply price feeds from a variety of external sources in real-time.
This ensures that the synthetic asset will always be priced genuinely as per its equivalent in the real world. There's also an added benefit in that synthetic assets – or dAssets – traded on DEUS represent the value of assets that, in the real world, are traded with higher liquidity and with more professionality, such as on major stock exchanges. DEUS efficiently manages the buying and selling of synthetic assets using its treasury system, which can allow it to list potentially thousands of assets at a time.
What Can You Do With DEUS Finance?
Swap Cryptos and Trade Stocks Using DEUS Swap and Synchronizer
The primary interface of DEUS Finance is through its natively-built decentralized application (dApp) called DEUS Swap. As the name suggests, this is where you can swap between cryptocurrencies, such as DEUS' native DEUS and DEA tokens – more on that later on in our DEUS Finance review – Ethereum, DAI, WBTC (wrapped BTC), and USDC by connecting with your wallet. But this is also where you can use the Synchronizer to swap between different synthetic assets, called ‘dAssets' on DEUS.
‘Synthetics' are the digitalized – or tokenized – copies of real-world assets, as we learned earlier in our DEUS Finance review. Here, we can see that DEUS Swap's Synchroniser is host to a massive variety of different synthetics that represent a virtual version of real derivatives. These can be virtualized stocks representing companies like Tesla, GameStop, Google, Facebook, Mastercard, or Goldman Sachs. Or, they could represent commodities such as gold and silver.
More conventionally, you can also swap between synthetic cryptocurrencies such as Aave, Cosmos, Cardano, EOS, Uniswap, or Litecoin. Users have also made synthesized fiat, such as the British Pound, Japanese Yen, Swiss Franc, Canadian Dollar, and more. You can bet on them going up (long) or go down (short) for a huge variety of traditional and digital assets. It's also worth noting that some assets are only made available if you switch over to the xDai network on DEUS Swap.
Bet on What's Going To Happen Next With Futures
Proving the popularity of DEUS Finance, it has recorded more than $100-million in total value locked (TVL) within its blockchain protocol. DEUS Finance offers more than just token swapping and synthesized dAssets on its platform; however, users can also invest in the futures market. On DEUS, investors can choose to speculate on the eventual performance of individual companies, IPOs, and SPACs. As of now, you can bet on the performance of Coinbase Futures, Bakkt SPAC, and “MUSK” Futures, the latter of which is a bet on Elon Musk's SpaceX.
Earn More Through Staking on DEUS
As a trading platform, it's important that DEUS Finance can maintain optimal liquidity, and it encourages its users to stake within its protocol. Users can choose to stake their sealed tokens (sTokens), Balancer Pool tokens (BPT), or simple token pairs such as DEUS-ETH, DEA-USDC, SNX, UNI, and more. Depending on their choice of where to stake, users can earn a variety of different incentives, such as collecting rewards from an arbitrage bot in the Balancer Pool.
Through staking, users can also earn a portion of the trading fees, as well as collect a part of the losses from traders if they make a bad trade. The primary staking options are through the Single Pool for the aforementioned “sealed” tokens such as sDEUS, sDEA, and Time tokens; or through the Balancer Pool. The important distinction here is that the Balancer Pool has the potential risk of impermanent loss, requires more gas fees to be paid, but with significantly higher rewards.
Farm for Liquidity and Provide Collateral Through Vaults
Vaults are an important aspect of DEUS, as the deposits that users pool together into vaults will help to provide liquidity and collateral for trades and swaps on DEUS, such as exchanging stocks. Users will first need to seal selected tokens to earn sTokens – as we looked at earlier in our DEUS Finance review. Users can then lock up these tokens for a period of six months in one of five different vaults. As an added passive earnings option aside from staking, users on DEUS' vaults can then earn a portion of network fees in return.
What Are DEUS Finance's Cryptocurrency Tokens?
To better optimize the tokenomics of its DeFi protocol, DEUS Finance employs a unique dual-token system. Primarily, there are DEUS and DEA tokens that form the majority of the use-cases and utility within the platform, but there are also Time tokens that sit alongside them. For our DEUS Finance review, here's a breakdown of each one of DEUS' three network cryptocurrencies and the roles they each play in the wider economics of the protocol…
DEUS – A Stable Store of Value
One of two primary native currencies of the DEUS Finance ecosystem, DEUS tokens are primarily used as a stable store of value and as a means of providing liquidity to the DEUS Finance platform. Backed by Ethereum, DEUS tokens are very liquid. Based on one example on their webpage, DEUS claims that a purchase of 1,000 ETH-worth of DEUS at a price of 0.0040 ETH/DEUS only has a slippage rate of around 10%. Overall, DEUS is designed to be more stable but not entirely constant like a stablecoin.
For the most part, DEUS tokens are primarily used as a liquidity supply to power its swapping and trading services. One reason for this is that there is no supply cap for DEUS tokens. Instead, its infinite supply follows along a bonding curve. Buying DEUS tokens on DEUS Swap increases the supply, which also contributes to an increase in price owing to the use of said bonding curve. This same price-supply effect doesn't work if you're buying DEUS tokens on a secondary market, such as Uniswap.
At the time of writing this DEUS Finance review, the value of one DEUS token is $8.58. However, DEUS themselves admit that DEUS tokens do not have much utility. On DEUS Finance, the Ethereum Ether (ETH) tokens used to back DEUS tokens can have some function within the protocol, such as being used for yield farming on other networks, support DEUS Finance whenever there's a liquidity shortage, and future updates might see DEUS tokens completely replace the vault system.
DEA is the second of the primary native crypto of DEUS Finance. The idea behind the dual-token system adopted by DEUS Finance stemmed from the need to engage with new users on its protocol through liquidity mining. However, at the time of launch, DEUS tokens could not be pre-minted, hence leading to the creation of DEA tokens to let new users farm pre-minted DEA until the launch of the token swapping and stock trading platform by January 2021 when DEUS tokens became available.
Originally designed to be a stablecoin, the community vetoed the idea, and DEA was later designed to be a cryptocurrency with a very low supply ceiling. This added scarcity is proven by the fact that the price of one DEA token is $327.52, as of writing this DEUS Finance review. There will only ever be 166,670 DEA in total circulation, as was determined by the community. Through a liquidity mining event held between October 2020 and January 2021, 110,000 DEA was distributed to stakers.
By holding the DEA token, users can earn a portion of the fees on the platform. It also gives users access to certain features and services, which non-DEA holders could otherwise not be able to take part in. Liquidity providers need DEA cryptocurrencies to enter into a Balancer Pool, where 70% of the value is derived from DEA tokens. Those staking pools earn around 70% of the total fees collected on the platform and are the primary source of fees for liquidity providers.
Time – A Measure of Your Reputation
Meanwhile, the third token, Time, is just as important as DEUS and DEA cryptocurrencies, despite it not being an integral part of the tokenomics of DEUS Finance. In short, users can earn Time tokens by providing liquidity to DEUS Finance through the vaults. Time tokens, therefore, are a reputation token that is rewarded for users who have contributed to DEUS' continued growth and network security. Locking up DEUS, DEA, or other LP tokens into Vaults is the only way to earn Time.
A user's earnings will depend on how long they've locked up tokens in DEUS Finance's Vaults and whether they locked in their liquidity early on in DEUS's launch or much later. For example, a person locking liquidity on Day 1 will earn more Time tokens than another user locking in liquidity on Day 30. DEUS practices an overcollateralized (OC) model as an economic policy in these early days of its launch, as of this DEUS Finance review.
This ‘overcollateralized' model essentially means that the value of collateral gained from early users is worth more than the potential losses of their investments. This is done to help protect DEUS Finance in the event of mass defaults and to prevent any abuse or exploitations of the network. Users holding Time tokens can also get additional rewards, such as being able to stake them for DEA tokens, receive airdrops or participate in events earlier, and take part in the community voting system.
What Are DEUS Finance's Future Roadmap Updates?
As of writing this DEUS Finance review, its platform is still very fresh from launch. Some of the services – such as most of the Synchronizer – are still inaccessible in DEUS' early phases, restricted only for Time token holders. Currently, they have also temporarily paused all staking rewards until certain smart contracts and features are in place. However, DEUS Finance has put in place a steady roadmap update along for 2021.
In March onwards, they will start working on moving DEUS Finance to a more scalable Layer 2 network. This should help to solve some of the problems with being built on Ethereum by implementing a fee-free trading model to offset the high gas fees. From there, DEUS Swap and Synchronizer will see more assets made available for users to trade, such as the inclusion of a synthesized S&P 500, along with completing the list of the top-100 cryptocurrencies.
Oracles and the data feed that DEUS Finance relies on will move towards a more decentralized structure in this roadmap. New Balancer Pools will be added, as well as creating new Layer 2 bridges to other blockchain networks. New functionality will be added as well, such as the ability to place limit orders and stop losses, including leverage trading. Improvements will be made to the staking pools and Vaults, and DEUS will also work towards adding new derivatives from other markets internationally.
DEUS Finance – Conclusion
In thinking of a conclusion to our DEUS Finance review, it's fair to say that there's a lot of excitement and hope riding on their platform. While we've had the ability to make and trade synthetic assets for years now, DEUS's entry marks a new chapter where synthesized assets from the real world can now move into a fully decentralized ecosystem, thanks to DeFi. So far, the most that DEUS has to worry about is competition from other DeFi-bound derivatives trading protocols, such as Synthetix.
But where DEUS stands apart is its dual-token system, which captures plenty of opportunities for every user to best monetize from DEUS Finance, whether it's simply to be used as a store of value, trading with regular assets like stocks, used for liquidity, or for staking. As we've learned in our DEUS Finance review, we now live in an exciting time when stocks – which have been around since the 1600s – can move ahead into a new digital age, where transparency, efficiency, and accessibility make a momentous leap forward.
DEUS Finance Review
- Ease of Use
- Project Values
- Tokenomics Model
- Long-Term Sustainability
- Allows for any user to simply plug in a price feed to DEUS' oracle network, and easily create their own synthetic asset.
- Adoption of a dual-token (more often three – DEUS, DEA, and Time) that can best give users more ways to monetize and have been optimized for different functionality.
- A large number of synthetic dAssets to choose from, such as stocks, fiat currencies, cryptocurrencies, commodities, futures, and more.
- The use of AMM and ample liquidity afforded by tokenomics means that there's less chance of price slippage compared to other platforms.
- Inclusion of staking pools and liquidity vaults to incentivize users with lucrative rewards, while also helping to provide swapping and trading platform with a lot of liquidity.
- Will come under competition with other DeFi-based derivatives platforms with synthetic assets functionality, such as Synthetix.