Paradigm has incubated its first crypto project, an Ethereum-based DeFi protocol, Yield Protocol promising fixed-rate lending and interest markets.
A researcher from crypto-asset investment firm, Paradigm co-authored the whitepaper for the DeFi, lending protocol boasting fixed-interest rates.
On May 8 the announcement was made stating that the whitepaper for Yield protocol was written by Paradigm’s Dan Robinson and Allan Niemberg.
I’m excited to announce Yield, a company bringing fixed-term, fixed-rate lending and interest-rate markets to decentralized finance. The @yieldprotocol builds on a paper published by @danrobinson from @paradigm, and we’re thrilled to have a seed investment from Paradigm. — Allan (@niemerg) May 7, 2020
Yield Protocol has also received seed investment from Paradigm. The Ethereum-based protocol aims to introduce “fixed-term, fixed-rate lending and interest-rate markets to decentralized finance.”
Yield’s whitepaper describes:
“a standard for a token that settles based on the value of a target asset on a specified future date, and which is backed by some quantity of a collateral asset.”
While DeFi protocols like MakerDAO (MKR) have garnered significant popularity within the crypto community over the past years, the floating nature interest rates associated with these vehicles have proven to be subject to significant volatility with Maker loan fees fluctuating between 0.5% and 20% during 2019.
Yield Protocol’s first utility will facilitate the creation and issuance of ERC-20-based zero-coupon bonds, a tradable debt instrument that pays its holder at a fixed price on maturity.
The whitepaper stated:
“yTokens are like zero-coupon bonds: on-chain obligations that settle on a specific future date based on the price of some target asset, and are secured by collateral in another asset.”
The first of Yield’s bonds will be:
yTokens
yDAI
allowing users to borrow and lend MakerDAO’s stablecoin Dai at fixed rates using ETH as collateral.
Yield is @paradigm's first incubation, and I am thrilled that @niemerg is building out the @yieldprotocol. The Yield Protocol is a design for a DeFi platform supporting fixed-rate lending/borrowing as well as interest rate speculation, using "yTokens." https://t.co/bU2fxorvN9 — Dan Robinson (@danrobinson) May 7, 2020
Meanwhile, $900 million is currently locked up in DeFi protocols in total, of which MakerDAO represents 53.4%.
Source: Cointelegraph | Image: Pexels