1) “The fear of the unknown is possibly the most fundamental fear of human beings.” A piece on the rise of on-chain tokenized risk protocols.
@pendle_fi @element_fi @APWineFinance @SwivelFinance @Barn_Bridge @saffronfinance_ @88mphapp @NotionalFinance @Horizon_Fi @yield
@pendle_fi @element_fi @APWineFinance @SwivelFinance @Barn_Bridge @saffronfinance_ @88mphapp @NotionalFinance @Horizon_Fi @yield
https://twitter.com/gbvofficial/status/1409851644016222208
2) #DeFi has experienced tremendous growth over the past year. With a total value locked of more than $100 Billion at its peak across all chains, growing from just over $ 1 Billion TVL roughly a year ago.
3) As the industry continues innovating and building momentum, #DeFi protocols are becoming increasingly sophisticated with their design and mechanisms. Hoping to bring structured products like risk hedging products, financial derivatives to the decentralized financial sector.
4) When we look from the traditional debt market perspective, the majority of debt markets are driven by fixed-rate lending. This is where it offers certainty to relevant market participants, resulting in a simplified process in managing.
5) Existing #DeFi lending protocols can only facilitate variable rate lending and borrowing activities. For example, the USDC borrowing rate on @AaveAave experienced 2 significant hikes in the past year. In this case the rate was as high as 25% at one point during the first hike. 
6) The fixed interest rate aspect in the #DeFi lending protocol started with @AaveAave. AAVE parametrized the stable interest rate model to offer a fixed rate in the short term. However this can be re-balanced in the long- term in response to changes in market conditions.
7) It offers a way for users to gain short-term fixed interest rate exposure, it is never a true fixed interest rate design. But it opens the door for the continuous experiment on interest rate protocols.
8) The #DeFi sector is still experimenting with how fixed-income products can be built and what the structure should be. Naturally, the DeFi sector will start imitating the structure of traditional fixed-income products.
https://twitter.com/0xminion/status/1406869204649742336?s=20
9) @pendle_fi enables the trading of tokenized future yield on an AMM system, it exists on top of first-degree protocols, supporting such as @AaveAave and @compoundfinance.
10) There are 3 components in the @pendle_fi system that enables the trading of tokenized future yield: 1. Yield tokenization 2. Pendle’s Automated Market Maker (AMM) 3. Governance
11) @pendle_fi creates a unique type of AMM that caters to all assets with time-decaying properties, since the value of a yield token is time-dependent where yield token holders entitlement to less yield as time passes and the token becomes worthless upon expiration.
12) The @pendle_fi AMM curve will shift at the equilibrium point and adjust itself to account for the time decay. Pendle’s yield token AMM could also become the oracle in the interest rate space for other tokenized risk protocols.
https://twitter.com/boredGenius/status/1406450672111783940?s=20
13) @element_fi is targeting to create a fixed rate, capital-efficient yield protocol for users. It emphasizes its principal token rather than the yield token to enable fixed yield products to be offered in the DeFi market.
14) It expands the fixed-variable component in the lending interest rate world to include e.g. farming yield, ETH 2.0 yield, etc.
15) There are potentials for tranche lending protocols to leverage @element_fi fixed-rate products as the backstop for senior tranche. It also introduces the De- Collateralize to improve capital efficiency, in essence, a fixed-term loan that pays the borrow fees upfront.
16) @APWineFinance is focusing on building its protocol for future yield tokenization. It does not offer fixed interest rates but enables the market to trade future yields.The protocol is to target farmers, traders, and liquidity providers who wish to lock in their future yields.
17) @SwivelFinance also leverages two token designs, termed Notional Tokens (nTokens) which is the interest coupon and zero-coupon token (zcToken). However, the protocol implements an orderbook rather than using the AMM model which aims to provide capital efficiency enhancement.
19) You can read on the rest of the piece which features @Barn_Bridge @88mphapp @saffronfinance_ @NotionalFinance @Horizon_Fi gbv.capital/the-rise-of-on…
20) Not everyone has the ability to take every risk; We are in the early stage of the “future of france” where the market does not have the necessary tools for #DeFi users to hedge certain risks such as yield risk. These tokenized risk protocols are the beginning of a new chapter
21) We believe the rise of on-chain tokenized risk protocols will play an increasingly pivotal role in the ecosystem. Helping #DeFi to evolve and creating the next-level financial instruments for a diverse group of players to enter the space.
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