Litentry partners with DAFI Protocol to introduce a new Staking Model

3 min readJul 1, 2021


  • DAFI Protocol and Litentry are partnering to introduce identity-based staking models for the DID and DeFi ecosystem.
  • The new rewards distribution program will issue dLIT tokens to $LIT users.
  • These smart synthetic dTokens are designed to be algorithmically pegged to the demand of $LIT.

We are thrilled to announce our latest partnership with DAFI, an innovative synthetic staking protocol that reinvents how every decentralized network is rewarded. Both teams will delve into the integration between DAFI’s smart synthetic tokens and Litentry’s cross-chain identity computation service. The collaboration aims to provide enhanced possibilities for long-term users for both crypto projects.

Smart synthetic dLIT tokens for long-term $LIT users

The success of any decentralized economy depends on its ability to plan for both the present and the future adequately. In most cases, new platforms remain short-sighted in their method of vision execution. For instance, it is common for new platforms to experience supply shock due to their myopic rewards distribution mechanisms.

DAFI is working to help resolve this issue through the use of smart synthetic tokens. dTokens are designed to incentivize long-term commitment to the project through the algorithmic regulation of rewards distribution programs. By pegging these smart synthetics to the demand of the actual native token distribution changes proportionately to the market dynamics.

Litentry can leverage DAFI’s smart synthetics technique to issue dLIT tokens instead to lessen the impact of market volatility.

Given the fact that credit computation algorithms, data origins, and identity validators are all governed by the LIT token holders, it is essential to ensure their commitment to the network and avoid short-term exits. Decentralized identity is a globally unique persistent identifier, making it a critical player in scenarios where the server requests the client for identity data, such as KYC, credit scores, or credentials.

dLIT tokens can help maintain scarcity, preventing negative effects from supply shock, consequently securing the network by keeping identifiers in the system for longer.

Hanwen Cheng, Litentry CEO, stated,

“Our partnership with DAFI is a creative choice to safeguard continued sustainability for decentralized platforms. By using DAFI’s synthetic token pegging system, we will create possibilities that long-term believers in their ecosystems will continue to have their faith rewarded.”

DAFI’s founder, Zain Rana, has a similar sentiment to that of his Litentry counterpart.

“The future successes of DeFi projects are predicated on their ability to retain and attract believers of their mission. By working with Litentry, we will provide further foundations to ensure this achievement and instill an innovative solution for their users,” said Rana.

About DAFI Protocol

DAFI reinvents how every decentralized network is rewarded. By creating synthetics pegged to different decentralized networks, every blockchain and cryptocurrency can create a dToken flavor to reward their early users while still enhancing scarcity when demand is low.

Our mechanism rewards a network even when demand declines by issuing synthetics that will reward users later — instead of earlier. This approach will change the foundation of all staking, liquidity, and even social reward systems for the entire decentralized world.

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About Litentry

Litentry is a Decentralized Identity Aggregator that enables linking user identities across multiple networks. Featuring a DID indexing protocol and a Substrate-built distributed DID validation blockchain, Litentry provides a decentralized, interoperable identity aggregation service that mitigates the difficulty of resolving agnostic DID mechanisms. Litentry provides a secure vehicle through which users manage their identities and dApps obtain real-time DID data of an identity owner across different blockchains.

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