secondary title

Visible and intangible annualized rate of return

The wave of DeFi has aroused a new round of enthusiasm for participation in the encryption market users.

Faced with a wide range of DeFi projects on the market, the first thing users pay attention to when participating is often the annualized rate of return. The initial APY of many DeFi projects is ridiculously high, and some projects even have an APY as high as 1000%. For many novice users, this seems to be a rare investment opportunity. This means that the real rate of return is high.

First of all, the high returns of most DeFi projects are not sustainable. At the beginning of the project, a large number of tokens were distributed, and the income of head mining was indeed considerable. However, with the passage of time and the entry of subsequent users, the user's income may decline rapidly or even cut in half.

The second is that project tokens may not necessarily be able to sell at a good price. In many DeFi projects, a large number of tokens are locked at the beginning, resulting in an inflated market value. When the lockup expires and the tokens enter the market, the price of the tokens will plummet. Therefore, even if the project promises a high annualized rate of return in the early stage, If the project tokens are reset to zero, the total rate of return for users will still be 0.

Therefore, although DeFi products seem to have amazing annualized returns, their obscure rules, complicated operations, and high risks are reminding users that this is not a "novice training ground", and many users who blindly pursue high returns Often get caught up in this half-baked financial experiment and end up with a loss.

A DeFi protocol that can hedge risks is a better choice for ordinary users.

secondary title

How to Capture Certainty Benefits in Uncertainty

Fixed-Rate Protocol Fixed-rate agreement is a stable income investment agreement, mainly based on fixed-rate model (Fixed-rate Model) products, including floating-rate bonds (Floating-rate Bonds), pledge mining, liquidity mining Financial derivative products, including mines, have formed a rich product line to meet investors' diversified allocation needs for encrypted assets.

The Fixed-Rate Protocol is similar to the fixed income enhancement strategy in traditional finance. The fixed income part is the "voltage stabilizer" of the entire strategy, which plays a role in stabilizing the fluctuation of net worth. excess returns.

• The benefits of Fixed-Rate Protocol mainly consist of three parts:

• fixed income

• Expected return

secondary title

Fixed Income - Fixed Rate Model

After users deposit in Fixed-Rate Protocol, these funds will enter the cooperative basic income platforms (such as Filda, Lendhub, Channels, etc.), and these platforms will provide floating annualized income. These basic income platforms have undergone a certain structural configuration, which can basically guarantee the basic rate of return.

In order to further stabilize the interest rate of the fixed income part, Fixed-Rate Protocol also set up a global interest flow pool, which can provide a buffer against floating interest rates. When the interest rate of the basic income platform is higher than the fixed interest rate provided to users, the interest of the liquidity pool will be greater than the interest that needs to be paid to users, and this part of the surplus can be used to balance the liabilities brought about by the decline in interest rates.

Fixed-Rate Protocol fixed-income products currently support stable coins, as well as hard currencies in the encrypted market such as Bitcoin and Ethereum, which reduces the risk of users to a certain extent. For most people who only want to obtain stable coins For high-yield investors, there are too many DeFi protocols on the market, and the screening and operation are time-consuming and labor-intensive. Fixed-Rate Protocol can select excellent platforms, products and currencies among DeFi products, and find the best annual rate Yield rate, users only need to deposit cryptocurrency through the deposit page, and choose the investment strategy that suits them best.

Excess Yield - Floating Rate Bonds

Another benefit of the Fixed-Rate Protocol comes from floating rate bonds.

Floating rate bonds are essentially a risk exchange. This risk exchange contract is a mature market in traditional finance, because different individuals or institutions inherently have different risk characteristics. Driven by this situation, always There is an inherent need for risk exchange.

One of the methods of risk exchange in the DeFi protocol is through risk grading. After the protocol absorbs deposits, it will be divided into different risk levels. The part with high risk level will get a larger share of returns from deposits, but must bear the cash flow loss. Risk; while the low-risk part will get lower cash returns, but its investment in deposits is guaranteed.

To give an example, Alice is a low-risk person with a fund of 1,000 USDT, and Bob is a high-risk person with a fund of 75 USDT. They participated in the Fixed-Rate Protocol together. Alice deposited 1,000 USDT at a fixed interest rate of 7.5%. At this time, the agreement will generate a floating rate bond for this deposit. Bob can use 75USDT to buy the floating rate bond, so that he can directly redeem Alice's fixed interest, and Bob gets Alice's right to earn 1000USDT. (low-risk level) obtained a guaranteed return, while Bob (high-risk level) leveraged floating rate bonds to leverage greater profits, and of course took the risk of losses.

Floating rate bonds rebalance risks and returns, provide leverage for more professional investors, improve the utilization rate and yield of funds, allow users to use smaller principals to obtain excess returns, and help The entire market hedges the risk of redemption. Floating rate bonds have anti-fall properties in the design of the Fixed-Rate Protocol. As long as the interest rate does not fall by more than 25%, holders of floating rate bonds can benefit from it.

Expected income - the value-added space of FIX

The third part of Fixed-Rate Protocol's revenue comes from the value of the project token FIX growth.

In Fixed-Rate Protocol, users participating in deposits not only have stable local currency income, but also have additional project token FIX income, so users can not only obtain basic income from the deposit agreement, but also earn FIX token appreciation. "income".

Most of the high returns in DeFi protocols today are driven by the growth of project tokens. Since DeFi assets are currently in a stage of rapid growth, many DeFi protocols use this method as a short-term method to attract users to use the protocol. The project party hopes to attract users by providing tokens for free, and users hope that the project tokens can bring hundreds of times and thousands of times of income.

Fixed-Rate Protocol is the first fixed-income agreement in the HECO ecosystem. It has a first-mover advantage in the DeFi interest rate and interest rate derivatives market. With the continuous influx of new users into the DeFi ecosystem, it has a huge market space.

secondary title

summary

summary

The fixed-income agreement is a product strategy that emphasizes absolute returns. Compared with simply participating in liquidity mining or speculation in the secondary market, products using the fixed-income strategy can achieve more stable returns with less volatility in the long run. The biggest advantage of the fixed-income agreement is to obtain stable fixed income on the basis of lower risk, and at the same time, it can capture the excess income brought about by the rise of project tokens.