DFX FAQ EN

From DeFiChain-Wiki

This page contains the most frequently asked questions about DFX.swiss. Please note that this page is a community page maintained by the community and not by DFX itself.

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General questions

Will I receive an overview of all transactions, including fees that I have made with the Decentralized Finance Exchange during the year?

Yes it will be possible to request such an overview. Once the service is live, this will be the next milestone. So feel free to follow our project progress on our Twitter-Channel.

Can the above overview of all transactions be used for the tax office?

Yes.

What are DeFi assets?

DeFi is the abbreviation for "Decentralized Finance." The term is generally used to describe all applications that offer financial services based on decentralized blockchain technology. Applications include decentralized equities or lending. In general, DeFi assets are all typical financial services of the conventional financial world, such as stock trading, which can now be carried out in a decentralized manner, i.e. without a central authority.  The DeFi-Assets, which will be tradable with us, are assets on the DeFiChain. If you want to have a detailed overview of the currently tradable DeFi-Assets, please have a look at the DeFiChain homepage: DeFiChain DEX

What are DeFi assets? Are additional cryptocurrencies offered?

DeFi assets in our context are all tokens, decentralized shares, liquidity tokens, etc. that are tradable on DeFichain. Thus, it will be possible to acquire all these assets through our service directly and without any detours via bank transfer. DeFi assets and cryptocurrencies outside of DeFichain will not be offered. Note: Note that this does not mean liquidity pools such as DFI-BTC but liquidity tokens representing these pools.

Is the service available for corporate customers?

Anyone who can make a SEPA bank transfer may use our service. Therefore, transfers from corporate accounts are also possible.

How is the infrastructure operated, how is it secured, what redundancies are built in?

The IT infrastructure is operated by a professional provider, regularly monitored and secured.

How is the service protected against fraud or deception?

Fraud and deception in the financial sector is summarized as money laundering. The company is regulated in Switzerland and complies with all applicable laws. We are therefore obliged to use all information available to us about the user to detect irregularities or anomalies in the user's behavior. For example, if someone buys and sells at the same time.

Is there already a website?

Yes: Decentralized Finance Exchange

Through which platforms and wallets will the service be able to be used?

Payments will be processed via our payment page. To do this, the user must log in there with their wallet and a signature. We plan to integrate all wallets, i.e. both the DeFiChain app (full node) and all mobile wallets (light wallets), into our service.

Can I contribute to the project?

Yes, visit us on GitHub or contact us on Telegram if you want to collaborate with us.

What is the risk of regulatory hurdles preventing implementation?

There is always that risk. We work with the most reputable law firm in Switzerland to keep this risk as low as possible.

What is the role of the employees in the team?

As in any small start-up, each team member takes on different roles and tasks. Currently, our main tasks are development (API, homepage and payment), the legal work that a business model in DeFi requires, and marketing. A more detailed breakdown of tasks will follow soon as a blog post and will then be linked here.

Why is my bank contacting me?

It may well happen that your bank contacts you or has rejected a transfer to our service. This is to protect the customer, as fraud or other criminal activities are suspected. In this case, it is advisable to contact your bank to confirm that you are aware of where you are transferring the money so that your bank will release the payment.

My bank does not support weekly payments. What can I do?

Usually, every bank offers a standing order. If this is not possible, because you tried it for example via app or via online banking, just contact your bank or consider switching to another bank. In addition, you can also create 4 different standing orders, each staggered by one week, so that one standing order is executed each week.

What does the schedule look like?

Check out our roadmap for a more detailed overview of our milestones and goals: Decentralized Finance Exchange Roadmap.

How do I contact our support or get in touch with the Decentralized Finance Exchange?

You can contact our support via our social media channels, Twitter and Telegram. You can also contact us via email: contact@fiat2defi.ch .

What currencies are supported by our service?

Initially, we accept EUR, CHF and USD. We will implement more currencies as soon as possible.

Is our service also available for Cake DeFi or other providers?

Our API interface is open source and freely available to any party. Any platform can incorporate our service without having to ask us for permission. All that is required is that they adhere to our standards. Thus, whether Cake DeFi or other providers will integrate our service is out of our hands.

Will other payment systems be offered as well?

Yes, we are already working on integrating as many widely used payment systems as possible. We consider the introduction of other payment systems to be essential and therefore want to enable credit card payments in particular. Apple Pay and Google Pay will also be introduced in the future. The next payment system that we will integrate alongside the SEPA payment system will be credit card payments. Take a look at our roadmap for this as well. With the accepted CFP, we can now additionally strengthen our efforts and accelerate the introduction of further payment systems.

User-relevant questions & KYC process

Who is authorized to use our service?

The service can be used by anyone who can make a SEPA transfer to Switzerland, because the company is registered in Switzerland. SEPA is a European payment system supported by practically all banks in European countries. However, we plan to add credit cards and other payment options later. The CFP approved by the Masternodes will help us to integrate other payment systems faster.

Up to what limit is the service KYC free?

The service can be used up to CHF 1000 or € 900 per day or CHF 100,000 or € 90,000 per year without a KYC process.

Is a KYC process still offered? What happens if I want to invest more than 1000 CHF or 900 € per day or if I exceed the annual limit?

Yes, as soon as you exceed the above mentioned limit, a KYC process will be required. A detailed step-by-step guide describing which documents are required for the KYC process and how it works is available on our homepage.

Does the calendar year or one year from my first transfer count for the annual cap at which one can freely invest KYC?

The calendar year counts. However, it should be noted that bank transactions are also KYC-free only on weekdays and to a maximum of 1000 CHF or 900 € per day. Therefore, it takes about 140 days anyway (100 transactions in total in 20 weeks; 1 transaction per business day) until you have used the full transaction volume KYC-free. For example, it is possible to invest CHF 200,000 KYC-free with one transaction per business day if this is split evenly over two fiscal years.

What is AML information?

AML stands for "Anti Money Laundering" and aims to combat money laundering. Therefore, every financial intermediary is obliged to ensure the monitoring and compliance with the applicable money laundering laws, mostly through an AML compliance officer.

What customer information is provided by the Decentralized Finance Exchange to comply with AML regulations?

We are required to provide the information that a customer leaves through a transaction to our business account through their IBAN to the participating banks. Through the IBAN, the associated name and address of this person becomes visible.

How or what happens to your data at the Decentralized Finance Exchange?

First, we store a route with your legacy address (your blockchain address) (Ex. of a route: Legacy address XY exchanges from EUR to DFI). This makes it possible to run a savings plan through a bank standing order, so our API can match the information and allocate your money to your wallet at the end. In addition, all completed transactions are stored to allow the later creation of tax overviews or a transaction history.

Which countries are currently not (yet) able to use the service?

Countries where SEPA transfers are not possible are initially excluded from our service until credit card payments are integrated.

Decentralized stocks

What are liquidity tokens, decentralized shares, etc.?

Check out the Crypto Explained YouTube channel for answers to these and many more relevant questions.

Why does decentralized equity always have to be backed by double the value in DFI?

With synthetic, or artificial, products, it is important that a value is not created out of thin air. Therefore, even with decentralized shares on the DeFiChain, the value of the share is always deposited in DFI. Due to the fact that these reflect the price feed of the real shares listed on the stock exchange, extreme fluctuations can occur. We have seen this for example with the short squeeze of Tesla (August 2020) or with the David vs. Goliath battle of AMC Entertainment or GameStop. To ensure that the shares are covered by value in DFI even during these extremely rising prices, double the value of the share is always deposited. At the same time, of course, the DFI price can fluctuate just as much.

Who deposits the collateral behind the synthetic decentralized shares?

Every participant on the DeFiChain can deposit collateral and thus create decentralized securities. The deposited collateral is locked on the blockchain, making it redeemable by the token owner at any time. The Decentralized Finance Exchange does not create its own securities, but merely buys them on the liquid market via DeFiChain's Decentralized Exchange (DEX).

Where does the price for the respective share come from when the exchanges are closed?

The price is determined on the DEX by supply and demand. Suspension of trading is always a distortion of the market, if there is no trading at night or on holidays, there is still a supply and demand, but at that time it is not reflected in the price. Free trading is possible on DEX and therefore the true market price is reflected at all times. To illustrate, if GameStop had not suspended trading in 2021, the price would have continued to rise. However, people willing to buy no longer had the opportunity to do so, and so the price could only fall. This distortion of the market or suspension of trading in individual shares would not and cannot occur on the DEX.

Purchase process: FIAT -> DeFiChain Assets

How can I transfer fiat money to Decentralized Finance Exchange?

You make a transfer to invest in a DeFi asset. To do this you can use our payment page. On this page you will be guided through the process by defining an order to us and if necessary you can use a referral code of a friend and on the first transaction you will also get your own referral code to also get your passive income through referrals. At the end of the process, you will then need to make your desired amount via bank transfer to the IBAN provided there. You can find detailed step by step instructions for the purchase here: (LINK).

What is the purchase process once I make my transfer to Decentralized Finance Exchange?

We collect the incoming buy orders and execute them 1x a day in the beginning, more often as the buy volume increases. Thus, we exchange the customer funds closed as a total amount in BTC and transfer them to DeFiChain Wallet. There, the DEX is used to exchange into the different assets and finally these assets are transferred to the individual wallet addresses of the customers/clients.

How do I set up a split of the investment in the different assets if I make deposits via a standing order with my house bank?

Once you have made an investment in a certain asset, you can create a savings plan on this asset by repeated transfers (standing order) with the correct purpose. As soon as you want to save on new assets, you simply repeat the process for that asset and then set up a standing order with your bank again.

Will the purchased assets be transferred directly/automatically to my DefiChain address?

Once they are purchased from us, they will be directly and automatically transferred from us to your DeFiChain Wallet address, yes.

Can this service be integrated directly into my DeFi wallet (another redundant wallet if necessary) so that the transaction is from my bank account to my own wallet?

The plan is to integrate the service as a possible payment provider at the different wallets (Light wallet, Mobile wallet, DeFiChain wallet/app as well as other wallets in the future). However, this does not mean that the transfer will go directly to your wallet, because we need to exchange the fiat money into your desired asset first, and then send it to your wallet. So, as with any service provider, you have to trust the service provider during the time of service provision. Advantage, after that you are in full control of your DeFI assets.

Where do you get the DFI liquidity from?

We don't need liquidity, as we directly buy the assets using the money provided by the clients. We exchange fiat money first into Bitcoin, then into DFI or the respective assets available on DeFiChain. After the trade is completed, the assets are transferred to your wallet address.

What exchange rate is used for the purchase?

We can only guarantee the exchange rate we get at the moment we make the transfer. This will always be as soon as possible after your deposit, and always within one business day of receiving the funds. This gives you sometimes an advantage (at lower rates) and sometimes a disadvantage (at higher rates), but if you have a savings plan running, the fluctuations due to regular execution are negligible. We pass the received exchange rate 1 to 1 to you plus the fees.

When will I see my assets in my wallet?

As soon as we have exchanged your funds, we directly make the transaction to your wallet. The time when you see them in the wallet depends primarily on the blockchain. Once the transaction is recorded in the blockchain, you will be notified and provided with the transaction hash and block number.

Sales process: DeFiChain Assets -> FIAT

Who buys the Reward DFI that you pay out in FIAT?

Reward DFI are the DFI that someone gets from Staking/Masternode/Liquidity Mining and exchanges directly into FIAT through our service. We exchange the DFI into dBTC through the DEX first. From there, these are given into the DEX pool.  Buyers are thus the people who either do arbitrage after we exchange a larger amount, or those who exchange into DFI via DEX at that time.

What is the process if I want to sell e.g. DFI in the amount of 100.000€ in Fiat?

You log in to our payment website to see in the dashboard what amounts you are allowed to transfer per day. Without KYC process, the maximum transaction per day is 1000 CHF or 900€. If you want to exchange a larger amount at once, click on "Increase Limits" and you will be redirected to a full KYC process, which basically works the same as on all other crypto exchanges. After successfully completing the KYC process, the dashboard display will change and you will be able to execute transactions within higher limits. The selling process is the same as any other sum. You transfer the asset to the Decentralized Finance Exchange via a blockchain transaction and then get paid the EUR amount to your deposited bank account fully automatically. If there are any queries from the bank due to the high sums, the Decentralized Finance Exchange team will be happy to provide advice. For sums over 50.000€ the consultation can also be done before the execution of the trade. There will be a separate registration form for this in the future.

Where does the liquidity come from for sales with larger sums, e.g. over 100,000€?

The necessary liquidity for exchanges in Bitcoin is covered by the DEX of DeFiChain and the liquidity to exchange from Bitcoin to Euro is guaranteed by centralized crypto exchanges we cooperate with.

Where can I see the exchange rates?

Transparency is very important to us. From there, the respective exchange rate will be viewable. There will also be an overview where you can see all your transactions, including the corresponding exchange rates.

OpenSource data

Where can you find your open source code?

Feel free to check out our GitHub Repo.

What software do you develop and is it really all open source?

We have several areas.

  1. Website
  2. Backend infrastructure of the Decentralized Finance Exchange
  3. API between the Exchange and the user software
  4. User Software

The website is open source under a Creative Commons CC BY-SA 4.0 license. The backend of the Decentralized Finance Exchange cannot be easily published for security reasons and therefore remains the property of the company. The API and user software is developed under MIT license and published on GitHub.

Fees

What happens to the fees if the user does not use a reflink?

The money goes into a separate account and the revenue from the fees is used exclusively for marketing, such as Facebook Ads.

What are the purchase fees with you?

At the start of our exchange, the first 1 million DFI are subsidized by the CFP and offered at a fee of 1% or 0.5% with ref link on the transaction volume of a purchase. After that, all trades will cost 3%. The fee will also decrease later on when the trading volume on the Decentralized Finance Exchange becomes larger.

What are your selling fees?

Sale orders are not subsidized and are 3% per transaction, the same as Relai.

Questions regarding the CFP (Community Fund Proposal)

What happens when someone washtrades to generate the CFP distribution?

All trades made by our company will be publicly viewable and trackable on the blockchain at the outset. Wash trading can be quickly identified and will not be counted by us as real trading.

Why don't we take outside funders into the project or borrow the money from the bank instead of a CFP?

External financiers usually see crypto companies as a money pit, but therefore always want to earn the maximum from it. Since we ourselves are deeply convinced of DeFichain and its success, we want to primarily make the project grow for the long-term benefit of all. We want to avoid this conflict of interest. Additionally, support from the CFP makes extreme sense when the entire community can exchange from fiat to DFI for 1% fees with no effort.

What is meant in the CFP by "The backend of the Crypto Exchange cannot simply be published like this for security reasons and therefore remains the property of the company"?

Software that is developed for user interaction is always open source and freely available. This ensures that the idea can be copied by someone else at any time and that security vulnerabilities can be identified for users. The company also owns software that is used exclusively for internal processing such as monitoring transactions for specific irregularities. This software does not interact with the user and is not made public. However, we are looking into alternatives in order to be able to use more open source software internally from the beginning.

Where can I find support? How do I contact Decentralized Finance Exchange?

You can always contact us with any questions via our Telegram group. Additionally, a wiki for improvement suggestions is planned, we will keep you updated on this in the Telegram group and on Twitter.

What is tradable via Decentralized Finance Exchange?

All liquid assets and tokens implemented on the DeFi chain will be tradable. Our team is working as hard as possible to integrate new potential assets into our service as soon as possible. You can find an overview here.

What products are currently part of the Decentralized Finance Exchange family?

Everything that is currently tradable on DEX.

What is our vision?

Check out our vision on our website.

Are there any limits? Deposit/withdrawal, maximum possible investment in an asset?

As long as the client has gone through a regular Know your Customer (KYC) process, there is no limit on transactions. If you have not done a KYC so far and the withdrawal amount exceeds the daily limit of 900 € or 1000 Swiss Francs, you will automatically be asked to go through a KYC.

How much money and time has already been invested in the project?

On the development side, we have a whole team that sacrifices many hours of their free time to develop the software. People who don't do things for money, but work hard for hours out of love and conviction to realize our vision. With the CFP accepted, we now have the certainty that we can access funds from the DeFiChain Community Fund IF we settle a purchase volume of 100000 DFI through the Decentralized Finance Exchange in the 1st stage. Unfortunately, we cannot give exact details about the costs, but we can reveal that we are working with the most reputable Blockchain law firm in Switzerland, with an hourly rate of 600 CHF per lawyer. The costs incurred to date for legal advice, registration of a Swiss AG, etc. already amount to a six-figure sum and are being pre-financed by us.

DeFi & DeFiChain

What is DeFi?

DeFi is an acronym for Decentralized Finance. DeFi describes the possibility of financial applications (lending, stock trading, etc.) not being carried out by a trusted 3rd party, but instead using blockchain technology. Hereby, all people around the world get access to financial services without being exposed to a third party risk due to decentralization.

What DeFi services are available?

Basically anything that a centralized bank or financial service provider offers can be decentralized. Probably the best known and most common service is the issuance of money, see Bitcoin for example. Other applications include investment and lending, and many more.

What is a blockchain for DeFi?

DeFi services are built on blockchain technology. A DeFi blockchain was created precisely for these DeFi services, with emphasis on optimal infrastructure for speed , access, security, etc.

What is DFI?

DFI is the native token of the DeFiChain blockchain, comparable to Ether on the Ethereum blockchain. It is required to execute transactions and smart contracts. In addition, transaction fees are calculated in DFI and DFI is used for management (governance).

What is the DeFiChain app/wallet?

The DeFiChain Wallet or App is the wallet developed by the DeFiChain Foundation and used to interact with the DeFiChain Blockchain. It is a soft wallet and is a safe place to store your DeFiChain assets because the user has full control over their wallet by holding the Private Key to the wallet. Furthermore, this wallet is a full node for security reasons, which means that the blockchain must always be fully synchronized and thus downloaded in order to use the wallet or make transactions. More information about DeFichain and the wallet can be found here. In addition, it is necessary to have such a wallet set up in order to use our service. Besides the wallet/app of the DeFiChain Foundation, there will be other wallets with which our service can be used.

Where can I learn more about the DeFi blockchain and DFI?

You can learn more about DeFi blockchain and DFI on their official website. You can find more information on:  DeFiChain Explained and Santiago Sabater's YouTube channel CryptoExplained.

What are the DFI network fees?

0.2 DFI maximum currently per transaction. You can find more detailed information at the community project DeFiChain Analytics by Daniel Zirkel:

How do I start investing in DeFi assets?

The start is very easy via the Decentralized Finance Exchange. You can find more information here.

What makes Decentralized Finance Exchange unique?

The Decentralized Finance Exchange stands for simplicity and great usability, so you can easily join the DeFiChain ecosystem and invest in DeFi assets on DeFiChain. Thereby, it is unique that you as a user don't have to go through any KYC process* and you can make non-stop (24/7) investments with us or there are no trading hours as with usual exchanges. It should also be noted that you are in full control of your assets at all times, as we do not manage client funds (non-custodial) and you store your assets in your own wallet.

*Note that a KYC process is required if the daily cash inflow exceeds 1000 CHF or 900 Euros. The annual limit above which KYC is required is 100,000 CHF or 90,000 euros. See also questions/answers on the User-relevant questions & KYC process section.

Which DeFi assets are tradable or purchasable via the Decentralized Finance Exchange?

Here you can see a screenshot from our payment page where you can place buy orders. All assets shown there are tradable.

Buying process on the Decentralized Finance Exchange - Asset selection

Referral-Program

Do you have an affiliate program?

Yes, we do and you can build additional passive income through your affiliate/referral link.

How does it work?

  1. Share your referral code with other people
  2. They will pay 0.5% less transaction fees (2.5% instead of 3%)
  3. You passively generate 0.5% on all investments of the people who use your referral code

Example: So you earn 5€ per 1000€ investment

  1. Your rewards will be paid directly to your wallet at the end of each week.

! Please note that you can't enter your own ref-code because this is a referral program.

How does the referral program work?

When you make your first transaction through us or when you complete your first savings plan, you will be assigned a referral link. If you forward this link and it is used in a transaction execution by investing in one of our offered DeFi assets, you will be paid 0.5% of the transaction volume on a weekly basis.

How do I use a referral link?

In the payment process on our Payments page there is the referral link/code input field.

What happens if my friend forgets to enter his/her referral link/code? Can I still get a referral bonus?

Unfortunately, no. However, if it is a savings plan, he or she can include your referral code in the next standing order for a savings plan in the reason for use to get a bonus.

Is there a limit to the number of referrals for which I can receive a bonus?

No, we want you to convince as many friends as possible to use our service. Both sides benefit from the referral program:

  1. Your friend saves 0.5% of the transaction fees on the purchase volume of DeFi assets
  2. You receive this 0.5% of transaction fees as a bonus when your referral code is used.

Is there a limit to the referral bonus payout?

Yes. In summary, our referral program pays users 0.5% on the purchase volume that has been purchased through the user's referral link by a new user. The referral program has an upper limit of 100'000 CHF purchase volume per user or the equivalent in any other offered currency. This means that the referral program is only valid up to a total referral bonus of 500 CHF per user: 100000 CHF * 0.5% = 500 CHF. If the purchase volume of a user exceeds 100000 CHF, which was transacted over this Referral left, no more bonus is paid out. The number of users recruited through referral links is unlimited. Furthermore, the referral program can be changed or terminated at any time without giving reasons. There is no right to continuous referral bonus payments in case of termination of the referral program.

How much do I earn with the referral program?

As soon as your Ref-Code is used, it will be noted in our system with the respective trading volume. At the end of the week you will receive 0.5% of the trading volume generated by your Ref-Code in DFI paid out to your wallet.

What happens to the 0.5% in fees if no ref-link was used?

The 0.5% in fees goes into the marketing budget to get even more exposure and capital into the DeFichain ecosystem.

When do I get paid the bonuses from the referral program and how?

Weekly 0.5% of the trading volume transferred via your referral code is paid out to your wallet in DFI.

Privacy, Security & Legal

Can I use the service anonymously?

No! We use your name and address from your bank transaction, as we are legally required to do so as a Swiss corporation and must comply with AML (Anti-Money-Laundering) Regulation. However, up to 1000 CHF trading volume per day, no KYC (Know-your-Customer) process is required, your SEPA bank details are sufficient for trading DeFi assets.

Is your service even legal? How can you offer your services to a customer without the customer having to verify himself?

The customer makes a bank transfer and since he is verified with the bank, we can do without the verification. This procedure is not possible in Germany, but our head office is in Switzerland and as long as the Swiss AML laws are followed, business can be done without registration or verification of customers. Moreover, it is a common business model in Switzerland: see Relai. So in conclusion, YES our service is legal.

How transparent is the Decentralized Finance Exchange?

Transparency is very important to us. We publish as much information about our trades as possible to be able to build trust, but at the same time we must always preserve the privacy of our users.

Do we have any partners?

Yes, we have several partners. These include a bank, a service provider for the KYC process and a renowned Swiss law firm. When the service is launched, all partners will be published by name for complete transparency.

Will customer data be sold?

No, we will never do that because we value our customers and respect their privacy.

Will client data be transferred to our partners?

Yes. In order to get started as quickly as possible, we have chosen to work with existing professional providers. This will save us a lot of time in the start-up phase and allow us to move forward faster. In the future we will check if these services can also be provided in-house.

Have you ever lost client money?

No, we do not store client funds (non-custodial). The assets are stored on the customer's wallet, to which only the customer has access using his private key.

Is there any kind of insurance for lost funds?

There is no insurance, because we do not hold any funds of our clients (non-custodial). We are only responsible for forwarding the acquired DeFi assets to your wallet. Since this is an operational activity, as of today there are also no insurance providers that cover such a service. If you are worried about your assets, you can split the investment to minimize the risk, for example by transferring 10 x 100 EUR instead of 1,000 EUR. This way you can make sure that our service really works with small investment amounts.

Does Decentralized Finance Exchange have any access to my assets?

During the buying and selling process we have responsibility over your funds to exchange them on your behalf. Before and after we have no access to your assets, because your assets are kept exclusively in your wallet, to which we have no access, because only you know your private key!