Rio DeFi is a platform using distributed ledger technology to develop products aimed at driving fast digital currency adoption.
Despite decentralized finance (DeFi)‘s strong momentum, its adoption is bound to be hindered by its disconnection from centralized finance (CeFi). While DeFi came to address the inefficiencies of CeFi, the two have to be interfaced in order to drive the former’s uptake. Fortunately, there are several blockchain-based projects that are building bridges to reconcile the two.
Among these projects is Rio DeFi. At its core, the network’s vision is to see a smooth interconnection between CeFi and DeFi to drive the latter’s adoption. To understand the platform, let us look at it right from its background, what it is, how it works, and everything in between.
The project is co-founded by James Anderson, Calvin Ng, Stephane Laurent, and Ekaterina Volkova. Anderson is a serial investor in blockchain platforms and serves as the platform’s CEO. NG, who doubles up as Rio DeFi’s president, has a gaming background and is also the MD of PlutusVC.
Table of Contents
Background
Laurent is a marketer focusing on blockchain companies. And lastly, Volkova is an experienced business consultant specializing in fundraising, event organization, and strategic management.
What is Rio DeFi?
Rio DeFi is a platform using distributed ledger technology to develop products aimed at driving fast digital currency adoption. It providing a DeFi-CeFi bridge. Top on its radar is how to shine the DeFi light on conventional businesses such as banks using its “next-generation blockchain” called Rio Chain.
Rio Chain eliminates high gas fees, enables high transaction speeds, and works in a decentralized manner, allowing the network to promote global usage and access.
In allowing global access, the protocol seeks to increase the international use of cryptocurrencies from the current 1 percent to 99 percent. Rio Chain aims to achieve this by providing blockchain-based products that are upgradable, interoperable, and scalable.
However, for these products to attract the masses, there has to be a connection with financial institutions that will allow users to continue enjoying the interaction they are accustomed to like auditable processes, customer service, high liquidity, and account recovery. To bring everything together, the platform uses what it calls the Rio DeFi technology stack.
Key components of the Rio DeFi technology stack
Rio Chain
At the core of the stack is Rio Chain, a system that powers a new breed of smart contracts. The chain is built to withstand massive scaling, effectively overcoming one of the greatest giants in the decentralized world; scalability, which hurts transaction speed and throughput. Another problem plaguing the blockchain space and lowering the adoption rate is user-friendliness and isolated decentralized platforms.
The network reaches consensus through the use of a Proof of Authority (PoA) consensus mechanism. However, continued development on the platform will see it shift to the widely used Proof of Stake (PoS) mechanism. The platform has a wallet and a block explorer.
Substrate
Rio loathes a scenario where a blockchain platform leads at the expense of others. The protocol argues that the real adoption of virtual currencies and products thereof can only be achieved by promoting innovation.
One way to drive adoption is through tools and frameworks that ease the creation and interaction with blockchain platforms. Rio addresses this problem by utilizing Substrate, a software development framework that powers the creation of standalone blockchains and parachains.
Blockchain for Business
For blockchain technology to be used by businesses and organizations, the technology needs to have some resemblance to traditional financial infrastructure. For example, it has to be fast and flexible. Rio tackles these requirements by introducing a transaction speed of two seconds per block with a throughput of 3,000 transactions per second (tps).
The platform provides flexibility by using a virtual machine interpreter that is compatible with websites, configurable consensus mechanisms, and light client requirements.
Rio DeFi also throws in interoperability by bridging the gap between traditional businesses, decentralized applications, and users on multiple blockchain platforms. Note that the network uses Polkadot to enable the exchange of information between distributed systems. Polkadot is a platform powering cross-chain interactions.
Rio DeFi Token (RFUEL)
The platform has a native currency called RFUEL. The token is used to, among other things, reward transaction validators on the network and maintain the platform’s integrity. Furthermore, RFUEL is used to pay for gas fees on the system and is required to enable the execution of smart contracts.
Rio DeFi has a total token distribution of 1,000,000,000. Out of the total supply, 70 percent of the tokens went to rewards, while the community sale and private sale, and reserve, received 20 and 10 percent, respectively. However, the release of the tokens is scheduled to be done in five years.
Application of Rio DeFi
The protocol has massive applications in both the centralized and decentralized worlds. Part of its outline applications include:
Bitcoin Lending
Here, Bitcoin holders can create an ecosystem allowing them to lend or borrow amongst themselves. While at it, lenders earn interest while borrowers access decentralized global loans.
Bitcoin Saving Accounts
Rio can be used to build products aimed at facilitating Bitcoin and other cryptocurrency saving. To give cryptocurrency users the peace of mind needed, deposits have the security of financial organizations such as banks.
Instant Loans
The protocol can be used to power products meant to disburse instant loans against a collateral of 35 percent of their BTC holdings. Interestingly, these loans can be disbursed in the form of Tether (USDT), DAI, and other stablecoins pegged to the US dollar or any other reliable asset. Using stablecoins provides stability.
Cross Border Payments
When done using traditional systems, cross-border payments have the highest friction leading to massive losses. For example, approximately $38 billion is lost on transaction fees and currency conversion during remittances. Since Rio enables low transaction fees, Rio-based products like Rio Pay can reduce or eliminate the friction when sending funds across borders.
Conclusion
DeFi’s massive adoption can be boosted by introducing a reliable connection with CeFi. Rio provides this connection by providing a platform that enables creating products that will reduce the gap between DeFi and CeFi.
By providing high transaction speeds, improving scalability, and providing partnerships with banks and other financial institutions, the network increases the chances of driving massive DeFi adoption.
