Infinity Exchange, an Ethereum-based hybrid interest rate protocol, has announced the release of its Testnet. This launch marks a significant first step toward integrating TradFi market mechanisms and risk management into DeFi markets for institutional borrowers and lenders. More importantly, it paves the way for widespread institutionalization, which in turn will lead to a rapid expansion of the industry’s entire value.
Trading, yield farming, and investing in the real economy can all benefit from the capital efficiency offered by this platform’s underlying DeFi protocol. With its hybrid structure based on Ethereum’s blockchain, which performs calculations and risk management off-chain, the Institutional Fixed Income protocol has the potential to revolutionize the DeFi industry.
Over $20 billion of TVL is held idle by investors on Aave, Compound, Uniswap, and Curve, but they can put that money to use with Infinity’s leverage. An opportunity for consolidation on this scale has never existed before. In particular, it led to a rise in interest rates across the DeFi to market-determined risk-neutral levels and led to the establishment of more than $100 billion in TVLs.
Infinity Exchange proposes the notion of a Floating Rate, where the bid-offer spread between lenders and borrowers is zero. This comes as institutional investors increase their involvement in the cryptocurrency market. On its litepaper, Infinity Exchange aims to establish itself as the primary rates and risk protocol supporting the development of DeFi.
In addition, the exchange will introduce the first full yield curve in DeFi, including both floating and fixed rates. This will give traders the ability to hedge basis/rates risk and engage in speculation throughout the whole maturity curve. In addition, Infinity Exchange will introduce the first full yield curve in DeFi, including both floating and fixed rates. This enables traders to hedge basis/rates risk and engage in speculation throughout the whole maturity curve.
Infinity intends to reduce overall market volatility and bring stability to the broader DeFi markets by expanding the range of investable assets along the yield curve, thereby providing players with a simple mechanism for rapidly switching between risky and safe investments.
Finally, it will enable the management of a diverse range of complex collateral that has nowhere to create yield at now. This creates a rare chance for traders to profit on the spread between the interest rates offered by Infinity and those of other lending protocols. Consequently, this can potentially lead to a significant increase in the TVL.
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