What is Rio DeFi? Rio DeFi is a blockchain technology company. The mission of Rio DeFi is to accelerate the mass adoption of digital assets by bridging traditional and decentralized finance. The company develops solutions that hope to connect businesses, financial institutions, and banks with distributed ledger systems. Rio DeFi hopes to bring blockchain technology by prioritizing adoption, performance, scalability and ease of use. So with the current blockchain industry, it has a dire need for middleware, tools, and frameworks that developers can easily create to build blockchains and decentralized applications in a more efficient way. Furthermore, an extremely notable initiative that addresses all these two needs is Parity’s Substrate.

A Little History of Rio

The Substrate is a software development framework that builds blockchain technologies. Its uses have been to create standalone blockchains or to build (native) parachains. Ever since the Substrate’s initial release in 2018, it has become one of the most popular blockchain frameworks. Hence, in 2019, the team released the Rio Chain hoping to make even more changes to the crypto space.

DeFi

Now, before we continue diving on to Rio DeFi, let’s make sure you understand what DeFi is. DeFi stands for decentralized finance, and it will provide financial service for all users who have a device. DeFi platforms are receiving a lot of popularity over this past summer with many new systems being launched. Check out this article and read more about DeFi before diving deeper into Rio DeFi! 

Rio Chain

The Rio Chain is a core technology system created by Rio DeFi. The Rio Chain hopes to create the next-generation of blockchain. With the help of blockchain technology and smart contracts, Rio Chain hopes to create a new transformative financial system. At the very core of this technology, it hopes to support an ecosystem of decentralized financial applications. Furthermore, the applications that are built on the Rio Chain will enable lower transaction fees, faster confirmations, more efficiency, and global reach. So the Rio Chain takes a very opposite view to chain maximalism. The chain fundamentally believes that the idea that one blockchain should prevail will hinder the innovation aspect in the space, limiting the adoption of distributed ledger technology.

To achieve the the necessary success on the DeFi platform, it requires these various components:
  1. Rio Chain’s economic model breaks away from traditional blockchains as it directly incentivizes applications and users to contribute to the ecosystem
  2. Rio Wallet utilizes a wide variety of digital assets addresses into one public ID
  3. The platform has a breakthrough authentication system known as Rio Auth which allows users to access digital wallets via email and social media logins.

With these types of solutions, it will create an expansive adoption of blockchain products and services while also building a more inclusive, secure, and efficient financial system.

Key Features of the Rio Chain:

Transparency

All on-chain activities are available to all. By accessing the Rio Block Explorer, users can see holdings, transactions, and network data relating to accounts.

Client Requirements

Light nodes instead of full nodes, allows users to work locally via mobile devices.

Flexible Consensus

With the help of the Aura Consensus Algorithm, finality is reached with each new block created.

Efficient Deterministic Sandbox Web/Assembly Runtime

By using WebAssembly, users can build dApps using different smart contract languages.

Scalability

The technology that Rio Chain allows the platform to reach 3,000+ transactions per second (tps). This outperforms existing platforms (Bitcoin and Ethereum) that can only reach 5-20 tps.

Upgradeability

The technology that Rio Chain currently uses allows the platform to start with one consensus algorithm and change to another in the future without having to go through a hard fork.

Interoperability

As mentioned earlier, the Rio Chain is a Parity-Substrate-based blockchain that utilizes the Polkadot technology for cross-chain compatibility. So with the Polkadot technology, it allows parachains to connect as long as the chain’s logic compiles with the Web Assembly (WASM).

What is Rio Chain’s Consensus Algorithm?

Rio Chain uses the Proof of Authority (PoA) for establishing consensus and uses Substrate’s Aura (Authority Round) + GRANDPA (GHOST – based Recursive Ancestor Deriving Prefix Agreement) consensus algorithms. Aura helps to handle block data while GRANDPA is for verifying the finality of the blockchain. So by splitting the finality and the block data writing, it helps to create more flexibility in the whole network. With finality, it will bring more certainty to online payments which will be a fundamental basis for financial services on the chain.

For the next stages of development, the Rio Chain will switch from POA to Proof of Stake (PoS). In order to better support the PoS requirements, the consensus algorithm will also be switched from Aura to BABE (Blind Assignment for Blockchain Extension). The Aura acts as the engine to produce the block on the platform and GRANDPA acts as the validation and confirmation tool on the block. 

How does the Rio Chain operate?

The Rio Chain currently operates as a federated blockchain instead of a permissionless blockchain. Rio Chain uses the PoA consensus model. In the early stages of the development, the Rio network will only have a handful of nodes which will be run by the founders of Rio DeFi and the founding partners. So, by operating on a federated blockchain, it will allow faster speeds, scalability, lower transaction costs, lower energy consumption, stronger security, increasing data privacy, and the ability to work with institutions under regulations. This will translate into 2 second block times, 3,000 + transaction per seconds (tps), and zero possibility of 51% attack.

As the platform progresses, the team hopes to make the platform more decentralized. Some promising ideas include creating a secure, decentralized network by utilizing a PoS & PoA model with light node validators. Moreover with the Rio Chain, it has a strong focus on security and scalability, and it will definitely change the landscape of traditional blockchain systems.

Transaction fees are split into four categories:

  1. Base Transaction Fee: Fixed value charged after each transaction
  2. Byte Transaction Fee: Charges based on the size of byte
  3. Weight Fee: Charges depending on specified transaction weight
  4. Tips: Can help users increase priority when packaging a transaction

Competitive Analysis of Rio DeFi:

As seen from the above chart, we see that the Rio Chain excels in block creation time, tps and finality when comparing to traditional cryptos like Bitcoin and Ethereum. The Rio DeFi platform definitely has a competitive edge when comparing to traditional systems. So it will definitely not come as a surprise to see Rio DeFi at or near the top in the near future as it truly provides a landscape of opportunities for future financial services.

Financial Applications of Rio DeFi

Bitcoin Savings Platform

Will allow users to deposit BTC and other crypto assets to earn interest. With the Rio DeFi technology, you may earn up to 10% interest per year!

Bitcoin Lending Platform

Able to support users wanting to lend or borrow BTC from each other. Lenders will be able to receive interest on their Bitcoin while loaners can get an instant loan  using their Bitcoin as collateral. 

Interest Loan Programs

With the interest loan program, users can loan up to 65% of the value of their Bitcoin or other crypto assets. Issuing the loans can be done in the form of stablecoins which have a peg to the USD, 1:1. So this process will make it more efficient and inexpensive for loaning to occur as it will all happen on the same platform. 

The Rio Fuel Tokens

In order to encourage participants in the Rio ecosystem to cooperate and work together, several incentives are placed to maintain the network’s integrity. Here is where the Rio Fuel Token comes in. The Rio Fuel Token also known as RFUEL is the platform’s native (gas) token. So the token is used to conduct transactions and also help execute smart contracts.

1 billion RFUEL tokens will be created via the token generation event (TGE): they will distribute 70% of the tokens as rewards, 20% will be sold via community crowd sales and private sales, and 10% will be maintained as reserves and released over the span of 5 years. So check out the chart below to see how they will distribute their tokens!

The Future of Rio DeFi

The Future of Rio DeFi is bright. It has partnerships with many crypto platforms including MANTRA DAO, Bitpool, KQJ Club, and more. The platform also has partnerships with various European banks to better introduce cryptocurrencies to the general public. Furthermore, one key philosophy that Rio DeFi has is that it hopes not to battle the banks but to instead work with them. They hope through such a partnership they will be able to be one step closer to financial services for all. So, with Rio DeFi’s properties, it will allow the platform to implement payment solutions that will combine the best of both traditional and decentralized finance. In conclusion the platform will definitely be something to look out for as decentralized finance continues to gain popularity!

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