Zenchain - A Blockchain for DeFi and NFT

6 min readMay 21, 2021

Introduction

The crypto-monetary sector has a simple premise: people must control their finances completely. Although it appears to be a simple and obvious statement, today’s systems are not financial services that are actually controlled by those who use them. Zenchain’s task is to provide people (and in future machines and devices) with seamless access to decentralized finance (DeFi) with non fungible tokens (NFTs). Introduce for this purpose is ZenChain, a dedicated decentralized finance (DeFi) blockchain special for non-fungible tokens (NFTs).

Zenchain addresses decentralized finance in the blockchain community as a critical segment. Zenchain is a specially optimized blockchain for DeFi and NFT applications. Zenchain includes all of the core DeFi apps built into the core chain and not smart contracts such as swap, lending and insurance. Zenchain also has all NFT-supported applications such as minting, auctioning and trading. And with Zenchain especially your NFTs can use it to make a loan or stake in a pool as collateral in Defi to earn tokens

DeFi Problems

Scalability

The scalability of the host blockchain is a big problem with DeFi projects. The problem of scalability causes two major issues:

It takes a long time to confirm transactions
At times of congestion, the transaction is extremely costly

Ethereum can handle about 13 transactions per second at full capacity and centralized partners can handle thousands and thousands of transactions.

Problems with smart contracts

Vulnerability of smart contracts is a key source of problems for many DeFi projects. If the smart contract code contains the slightest flaw, it can lead to money loss.

Low Interoperativeness

Bitcoin, Ethereum, Binance Smart Chain, each with its DeFi ecosystem and community, are various types of blockchains. Interoperability allows DeFi platforms, devices, DApps and smart contracts to interact with each other on different blockchains.

Insurance failure

In case of hacks or other fraudulent activities, insurance protects investors. In centralized finance, insurance plays a very important role and DeFi is far less so.

“A DEDICATED BLOCKCHAIN THAT IS OPTIMIZED SPECIFICALLY FOR DEFI AND NFT”

Zenchain solutions to DeFi Problems

Scalable and High Performance Blockchain

Zenchain is an Ethereum compatible and interoperable, high-performance proof-of-stake blockchain. It is built on the Tendermint Core consensus engine using the Cosmos SDK.

As a Cosmos application-specific blockchain, Zenchain enables the use of Ethereum. The developers therefore have all of Ethereum’s desired features while benefiting from the PoS implementation of Tendermint. It can also exchange value with the rest of the cosmos ecosystem via the Inter-Blockchain Communication Protocol (IBC) because it’s built on top of the Cosmos SDK.

Key features of Zenchain;

Compatibility with Web3
Tendermint Core’s high performance
IBC Horizontal Scalability
Fast Transaction Completion

Cross-chain Solutions

Zenchain has two kinds of solution for transferring token through blockchain exit points:

Bridge solution: Zenchain-Ethereum two-way connection, Polkadot, Binance SmartChain, Tron, and more ZenBridge module chains.
Solution from IBC: Blockchain inter-blockchain communication protocols are the two-way link between Zenchain and the Cosmos network.

Inter-blockchain Communication Protocol (IBC)‌

The inter-blockchain communication protocol (IBC) is an end-to-end, connecting, state-functioning protocol designed in an unknown and dynamic way to ensure reliable, orderly and authenticated communication between blockchains. This is achieved by specifying a set of data structures, abstractions and semantics that any distributed directory may implement provided that they fulfill a small set of requirements.

IBC can be used for the development of a broad range of cross-Chain applications including token transfers, atomic swaps, smart multi-chain contracts and different kinds of data & code sharding.

Built-in DeFi Components

Decentralized Exchanges

The module has an Automated Market Maker (AMM) model in combination with order books, multi-block lots and limited orders to provide Zenchain with high-quality liquidity.

In order to combine a Batch-based order book with an Algorithm based on the AMM methodology, zenchain offers a Hybrid Exchange model:

Orders in the order book are accumulated
The liquidity pool uses the same swap price model to participate in this matching procedure.
The order book is processed with a matching engine at every batch execution height
Permits limited commands which remain until filled out or cancelled in the order book. They can actually stay open for several batches

Lending and Borrowing

Lending and borrowing of assets on-chain is facilitated by loanable fund protocols (PLFs) referring to DeFi lending protocols establishing distributed leader based markets for crypto loan funds. With a PLF, the market refers to the total amount of a token that is provided and borrowed, where the liquidity of the market consists in the deposits that are available. In a PLF, deposits for a certain token market, unlike peer to peer lending, in which funds are lent directly between individual agents, are grouped in a smart contract. An agent may borrow directly from the smart contract reserves, provided that the token market is liquid enough.

Token Initial Dex Offering (IDO)

Zenchain Token IDO is a decentralized incubator that supports the success of promising projects through the leverage of our community’s investment power and potential. Zenchain is aimed at opening up a closed ecosystem of early stage crypto-project investments for everyone, which were previously only accessible to well-trained investors and venture funds. Decentralized projects with Zenchain Token IDO are quick and cheap for raising and exchanging capital. The use of assets far beyond the current ERC 20 standard will be made possible in a safe and compliant environment for users.

Stable Coins

Non-custodial stable coins are cryptoassets which aim to be price stable in relation to a target currency, usually the U.S. Dollar. Non-custodial stable coin core components are as follows

Collateral: The main value of the stable coin is stored here. It is possible to token with Collateral zETH, zBTC or ZEN.
Agents: At least two roles are played by agents in a non-custodial and stable coin: I risk absorption by providing, for example, price risk-absorbing collateral; and (ii) stable coins.
Governance:. A mechanism and parameter set to regulate the entire protocol (either performed by agents or algorithmically).
Issuance: a mechanism to monitor or use collateral for issuance of stable coins (either performed by agents or algorithmically).
Oracles: A mechanism for importing data to the blockchain externally, like price feeds.

Using NFT as a Collateral in DeFi

The Zenchain specialty is fully supported NFTs and Defi cross-chain. Zenchain allows NFT owners to increase their strength with their NFTs, is just not collectable, users can borrow some fungible token (ERC20, BEP20, TRC20, etc…) to using their NFTs as collateral. The NFTs price is based on the system of auction. This means that only users who use their NFTs as collateral using the Zenchain auction system.

Users can borrow up to 50% of the top auction price from Zenchain.

Advantages of using Zenchain Protocol

Developing key DEFI and NFT applications.
High performance for all transactions
Specifically for decentralized finance, more safe blockchain.
DApps for decentralized finance are rapidly developing.
DApps with specific calls for funding applications.
The minimal attack on the platform was developed for financially intelligent contracts.
Governance Reliability
Unchangeable — through periodic blockchain anchoring.