Quickstart

The growing interest in DeFi, particularly within the lending and borrowing sector, continues to accelerate. According to data from DefiLlama, this sector currently holds the highest total value locked (TVL) at $51.042 billion, But how about the interest users need to pay? It can't be accurately predicted.

However, lending rates in DeFi remain inherently volatile. This volatility is often driven by inefficient interest rate models (IRMs), or alternative methods such as base rate mechanisms, which still fail to provide consistent, predictable lending rates.

Image source: https://defillama.com/protocols/Lending/Ethereum

Driven by the high level of unpredictability inherent in many decentralized financial systems. Institutions typically require stability, transparency, and predictable outcomes to confidently deploy capital at scale. To overcome this challenge, the introduction of fixed-rate lending and uncollateralized lending models presents a strategic solution.