decentralized financial system infinIty exchange It announced the launch of its Testnet, which promises remarkable capital efficiency for real-money traders, farmers, and investors. With its hybrid architecture on the Ethereum blockchain, which implements off-chain algorithms and risk management, Infinity Exchange, an institutional fixed income platform, promises to revolutionize the world of DeFi.
Infinity Exchange, created by Kevin Lipsoothe former head of structuring at Morgan Stanley, aims to establish itself as a base rate and risk protocol for developing the DeFi ecosystem in paper. The introduction is a watershed moment as it heralds a new era of institutional adoption and aggregate value confined to the industry by introducing the mechanisms and management of TradFi interest rate market risk to the DeFi markets.
The current DeFi protocol (version 1.0) was developed and implemented during a period of massive unpredictability in the demand for money market products. The developers of the early protocols made short-term swaps to stimulate widespread adoption in a retail-like lending context. Unlicensed decentralized banking has shown its viability and huge demand in the market, however, DeFi 1.0 is built on shaky ground and has serious flaws.
By laying a new foundation built on proven economic principles, Infinity Exchange paves the way for widespread institutional adoption and entry of trillions of dollars worth of assets ready to be tokenized into the DeFi 2.0 ecosystem. arithmetic limits, omissionsAnd the incompetence Existing DeFi 1.0 protocols make it impossible for them to achieve these goals, which is a major obstacle to widespread institutional acceptance and revolutionary use. By developing a protocol that mimics the functioning of the TradFi marketplace, especially the interbank lending market, Infinity Exchange has the potential to fundamentally change the DeFi ecosystem.
Infinity Exchange has implemented a floating rate for lending and borrowing with a zero bid in response to the growing interest of institutional investors in the cryptocurrency market. Shortcomings in usage-based protocols have brought DeFi 1.0 to a standstill, but Infinity Exchange heralds a tried-and-true approach to financial markets that combines the “we can do it better” ethos of the blockchain community with “it’s about time” sentiment.
The first full yield curve in DeFi will be offered by Infinity Exchange, with both floating and fixed rates, giving traders the ability to hedge base/price risk and engage in speculation throughout the entire maturity curve. Infinity intends to reduce overall market volatility and provide stability to the DeFi markets by extending the range of investable assets along the yield curve, thus providing participants with a convenient means to quickly and easily switch between risky and safe investments.
Finally, Infinity Exchange will make it possible to oversee a variety of complex collateral that has nowhere else to earn a return at the moment. Trading possibilities to arbitrage interest rate differentials between other lending protocols and Infinity are made possible through this. Moreover, it is likely that TVL will increase significantly. Investors with more than $20 billion in TVL that are now dormant in Aave, Compound, Uniswap and Curve may benefit from Infinity’s leverage. Due to this unprecedented consolidation opportunity, interest rates across DeFi have risen to market-determined risk-neutral levels and new TVLs have been created in the $100 billion range.
In short, Infinity Exchange is preparing for a $1 trillion institutional crypto-based fixed income market by facilitating the wholesale entry of TradFi investors into DeFi.
Kevin Lipso, Founder of Infinity Exchange stated:
“The fixed income cryptocurrency market needs to be 100x what it is today and we are taking the first two steps in this direction. We offer an institutional quality interest rate protocol in line with theoretical funding, all while taking a comprehensive approach to risk management.”
“At TradFi, institutional investors are much more active in the fixed income markets than they are in the equity markets. If we want more institutional adoption of cryptocurrencies, we need to first install the fixed income markets and it starts here, at Infinity.”
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