The Operation Model of Derify protocol

We introduced basic mechanism in Derify protocol in our first blog. In this article, we would like to talk about the unique operation model of Derify protocol.

Different from typical decentralized exchanges, Derify protocol is more than a liquidity pool (i.e. typical peer-to-pool exchanges). What we provide is a set of basic infrastructure that could construct the exchanges. It is expected that we can provide a complete set of DEX as a Service (DEXaaS) at our V3 stage.

In other words, anyone can run their own exchange based on Derify protocol, while sharing the same liquidity and risk control mechanism (leveraged trading, position pool, insurance pool, and bond pool).

In Derify protocol, Partner (or Broker) is the special role who has their own community of traders, and organizes them to do hedge transactions (or Position Mining) on Derify protocol’s core exchange (Derify Core, maintained by the founding team) or their own exchange.

As designed, traders don’t necessarily need to directly interact with Derify Core for trading, traders may trade in the exchanges owned by different Partners, however, rewards and risk will be calculated collectively and distributed fairly to each Partners.

We commit huge rewards, 30% of total trading fees income (from all the trading activities on Derify protocol including Derify Core and other exchanges) will be distributed to Partners as a stable income. We hope that Partners have sufficient motivation and income in their effort to promote the Derify protocol and send it to the moon.

We wish to truly achieve a fully decentralized derivatives trading platform, owned by community, ran by community, shared by community and in the end benefit the whole community. Derify protocol will ensure the liquidity and safety, and everything else is handed over to the members of the community.

The decentralized operation model of Derify protocol can also solve a crucial problem — service.

As experienced trading service provider, we know very well that derivatives trading requires extremely good service. Complicate and advanced products require professional team to provide service. However, service is the weakness for all decentralized products. Generally speaking, our core team and protocol may provide basic maintenance to the infrastructure, but we are not in a position to dictate content and service provide to traders all over the world, nor do we have the rights to offer universal services like centralized exchanges.

In traditional exchange such as Nasdaq, the exchange can only provide a place for trading, but traders will face different service organization, ranging from huge Wall Street brokers to small agent firms down street. Our Partner program runs the same way. Partners and community will bring unlimited growth and success for the whole project — this design can make the Derify protocol a fully decentralized, anti-censorship, rather than another centralized trading software.

For more details of how to become a Partner, you can refer to our whitepaper for basic idea. We will announce the final rules in the future, but the idea is simple, you only need to spending (burning) certain amount of eDRF token (which is the voting token generated for free by staking DRF token). In order to maintain the Partner status, you need to keep burning eDRF after earning the right.

Partners group will demand eDRF — More Partners will consume more eDRF, and more DRF will be required for generate eDRF tokens. Through this process, we effectively reduce the circulation of DRF and supports its price, which will benefit all DRF hodlers.

In the V1 of our mainnet, we will provide basic codes and links for Partners to determine their income (trading fees). When the mainet V3 is officially online, our Partners will have exclusive exchange address, customized exchange brand, images, and user interactive interfaces, and truly have their OWN exchanges.

In the early (V1) stage, we use an invite-only method to recruit teams and individuals with professional skill and experience to be our early Partners, core team who maintains Derify Core has no privilege over other Partners.

We encourage traders to choose trusted Partners and trade within their exchanges. Since launch of the product, Derify community will hold different promotion campaigns and reward outstanding-performing Partners. When the Partner system is online (v3), we will open positions for anyone who volunteered to be Partners and contribute to the community.

Derivation Lab appreciates your time reading this, we will continue to present other features of Derify in the future.

Please spread the words, for the future of DeFi community.

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Founding Team of Derify protocol. Official website:

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Founding Team of Derify protocol. Official website:

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