Infinity To Bring Institutional-Grade Interest Rates To DeFi

Infinity Exchange has announced the launch of its official testnet, a key step in its mission to accelerate institutional adoption of DeFi and unlock the next $1 trillion market.

It’s an eagerly anticipated launch that Infinity Exchange says will finally bring the concept of a “floating rate” and “zero-bid” offers to both lending and borrowing protocols. In other words, it introduces a tried and tested approach to the DeFi world that enables the first complete yield curve for investors, with both floating and fixed rates to choose from. With that, investors now have a way to hedge their basis and rates’ risk by speculating across the length of the maturity curve. 

Through Infinity Exchange, DeFi users have at their fingertips an array of tools that will enable them to dampen volatility across the full range of DeFi assets. By making it simple to switch between risky and riskless assets, Infinity Exchange intends to stabilize the DeFi market enough to finally attract the attention of cautious institutional investors. 

There’s good reason to believe it can do this, for Infinity Exchange creates options for investors to manage a wide range of complex collateral that is currently unable to generate yield. It claims it can provide a unique opportunity for investors to seek arbitrage between interest rate differentials across DeFi lending protocols and its own exchange. 

Further, Infinity Exchange believes it has the potential to massively expand the total value locked in DeFi by giving investors the opportunity to leverage more than $20 billion in TVL that’s currently sitting idle on popular protocols like Aave, Curve, Compound and Uniswap. 

Infinity Exchange said it brings this unprecedented level of capital efficiency to DeFi traders and traditional investors through an institutional fixed income protocol based on a hybrid structure that performs computations and risk management off-chain, while settling transactions on-chain.

It's a complex protocol that is the brainchild of ex-Morgan Stanley Head of Structuring Kevin Lepsoe and a team of finance and technology veterans. With the launch of its testnet, Infinity Exchange says it’s bringing traditional rate market mechanics and risk management to the DeFi industry for the first time. It’s a key step that Infinity Exchange argues is desperately needed in the DeFi space. It says existing protocols are ill-suited to attract billions of dollars’ worth of assets that are waiting to be tokenized due to their computational limitations, oversights and inefficiencies. By utilizing the same mechanics are traditional finance, Infinity Exchange says it can achieve the same level of efficiency as the interbank lending market. 

Lepsoe said the crypto fixed-income markets should be worth 100-times their current value. By introducing an institutional-grade interest rate protocol to the market that aligns with theoretical finance, Infinity Exchange is confident DeFi will finally reach that potential. 

"In TradFi, institutional investors are more active in the fixed income markets than they are in the equity markets," Lepsoe said. “If we want more institutional adoption in crypto, we need to first nail the fixed income markets and it starts here, at Infinity.” 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice