DeFi

Decentralized Finance (DeFi) has emerged as a transformative force in the financial landscape, offering innovative and inclusive financial services built on blockchain technology.

Native Compatibility with ERC-3643 Tokens

Due to the nature of ERC-3643 tokens, they are natively compatible with all these DeFi protocols. This means that issuers can leverage the full range of DeFi services without losing control or compliance. The embedded compliance rules within ERC-3643 tokens ensure that issuers can fulfill their obligations, such as KYC and maintaining a register of shareholders, while benefiting from the decentralized and transparent nature of DeFi.

Types of DeFi Protocols

• Decentralized Exchanges (DEXs) and Automated Market Makers (AMMs):

One of the most popular DEXs, Uniswap uses an AMM model to facilitate peer-to-peer trading without the need for intermediaries. ERC-3643 tokens can be seamlessly traded on Uniswap, enhancing liquidity and accessibility. For this the Issuer must authorize the liquidity pool on Uniswap. Similar to Uniswap, SushiSwap is another AMM that allows for decentralized trading of tokenized assets.

• Lending and Collateralization Protocols:

ERC-3643 tokens can be used as collateral for loans, providing additional utility to investors.

Aave is a popular and recognized onchain lending protocol. However, it is quite complicated to list a new token on Aave as the risk management is done by the community. Therefore, it requires a vote to be listed and to get your pool on Aave. Other lending protocols such as Morpho can be leveraged in a better way as you can create your own pools with external curators to manage risk.

Also, more and more lending protocols for RWAs and tokenized securities are emerging. Most of them simply enable companies to borrow money and don't require the company to be tokenized. Some of them enable token holders to directly borrow funds by collateralizing their tokenized shares. This is a really interesting use case that Tokeny is currently exploring with the help of large FIs.

• Yield Farming and Liquidity Provision:

ERC-3643 tokens can also generate yield if investors provide liquidity in decentralized exchanges or AMMs. For example, Yearn.finance is a yield aggregator that optimizes yield farming strategies for users. ERC-3643 tokens can be used in yield farming pools to generate additional returns.

• Blockchain Portfolio Tracking Tools and Wallets:

Most of the on-chain tracking tools will enable investors to see their position and to get information about their tokenized assets. Directly in their wallet or with the help of some portfolio tracking tool, they can see what they own.