Architecture overview

Introduction

Welcome to the Dether protocol documentation portal. The following pages contain a high-level description of the Dether protocol, its mechanisms, incentives and its token-economics. This documentation explains in detail all concepts associated with the Dether protocol and then focuses on the SDK usability.

We hope this portal will enable developers and builders from across the globe to better the Dether protocol and start building on top of it.

World

What is Dether?

The Dether protocol is a peer-to-peer cash-to-crypto protocol for applications built on top of Ethereum. Built by Ethereum developers, the Dether protocol is an open protocol for Dapps (decentralized applications) and crypto-based projects that share crypto cash-in and cash-out issues.

The Dether protocol and the Dether mission

Looking back at 2017, the number of decentralized applications built of top of Ethereum and released on mainnet has exploded. The decentralized finance (DeFi) space has grown to an all time high, with a global value of more than 1.5 billion USD. The Ethereum blockchain and DeFi solutions offer promising opportunities, enabling individuals to access and interact with trustless banking solutions. 

While many dApps are emerging every month, the complex buying process creates still barriers to Ethereum and DeFi mass adoption, as billions of adults remain unbanked and don't have the necessary bank account to buy ether or ERC20 tokens to interact with a particular Ethereum app. Although we are witnessing an exponential explosion of crypto related services, onboarding new users in the crypto world is still difficult.

On the one hand, in Western countries, having access to crypto is done mostly through the traditional financial system (mostly with credit/debit cards or bank wires). But there's still a crucial step missing to enable an easy way to cash-in/cash-out crypto trough the most used financial instrument in the world: cash!

On the other hand, paper money or cash is still king in many regions of the world. But if someone wants to buy crypto with cash or sell crypto for cash, wherever they are in the world, there is still a lot of friction. While the first mile issue has seen some solutions emerge in some countries, it's still hard, or even impossible, for many populations to transform cryptocurrency into cash and vice versa in only minutes.

Our belief has always been that the beauty and power of blockchain technology should be easily accessible to all. That's why we've decided to build a trustless protocol that allows individuals to be able to interact with the applications based on Ethereum blockchain without the need for a middleman. That's why we created the Dether protocol.

Onboarding the world to your (D)app

Using the Dether protocol as a developer, a dApp and/or product owner, you can now:

  • Add a cash-to-crypto on/off ramp for your app
  • Build new applications on top of the Dether protocol and save time trying to solve the first and last mile crypto issue. The Dether protocol is already here and ready to be used.
  • Onboard new users in the network and get rewarded.
  • Charge fees on stakings that happen on your application (if you wish to)

How does it work?

Using the Dether protocol, developers can propose to their users the ability to advertise their willingness to buy and/or sell cryptocurrency for cash, goods for crypto, or services for crypto, just like a marketplace of crypto buyers and sellers.

On the one hand, crypto sellers advertise their willingness for buying/selling cryptocurrency while making a profit. As they are the ones advertising their offer, we could call them "tellers." They can choose to charge fees from 0% to 100%: tellers are similar to traditional "bureaux de change" that someone can find for exchanging fiat currencies. On the other hand, users willing to buy or sell crypto from a teller that has advertised his offer represent the "buyer."

The Dether map

When a teller registers their point of sale in the Dether protocol, they has created a point of interest on the Dether map, and become visible to all users. The Dether map is the “Google Maps” for crypto tellers and retailers that accept cryptocurrency as a means of payment.

In order to make the mechanism more appealing for tellers, we have implemented a decentralized zoning system on the Dether map. To be able to advertise their offer and be visible on the Dether map, each teller directly owns a zone in which to sell crypto. Each teller that owns a zone appear as the exclusive seller on it. Each zone represents a 1km^2 square.

Just like taxi drivers who must hold medallions to do business in many parts of the world, users wishing to operate as tellers must stake a minimum amount of DTH (Dether's ERC20) tokens for entry. This requirement helps Dether attract only real users willing to engage in authentic transactions on the marketplace and Dether map. Moreover, a daily fee of 0.04% (representing 15% a year) on the staked DTH tokens is applied in order to keep serious tellers in the network and avoid zone takeovers. At any time, a competitor can come and open an auction on a teller's zone to become the new owner of that zone, and get the associated benefits.

With this zoning mechanism for tellers, individuals have the guarantee to have a teller available by 10 minutes by foot as each zone represents a 1km^2 square. Moreover, it also becomes possible for individuals to compare tellers' fees that are around them and eventually choose the best offer.

Example of a teller's business

When traveling to a new country, one of the biggest hassles is getting cash in the local currencies. Between trying to find an ATM partnered with a bank that doesn’t charge exorbitant fees, or that sinking feeling that you're most likely getting a terrible deal at the airport exchange office, it can be a frustrating experience. So why not sell selling some crypto for cash locally and actually make money from it.

The Dether app: unleashing the power of the network effect

Initially built on top of the Dether protocol, the Dether App was a first step in building a network of tellers across the globe for the ecosystem. Available on Ethereum mainnet since 2018, it enables individuals and businesses across the globe to buy and sell ether, ERC20 tokens and Bitcoin for cash without any middleman.

Using the detherJS librairies, the Dether App is available as a progressive web app on get.dether.io. In the Dether App, users can chat with each other in a decentralized way using their Ethereum address and by having their conversations encrypted.