Ethereum-based Yield Protocol has just gone live on Ethereum mainnet as a beta launch. The platform decentralizes fixed-rate lending and borrowing and aims to bring its features within the DeFi space.
Enabling Fixed Rate Borrowing/Lending To DeFi
Allan Niemerg, the founder of Yield, posted that the protocol is still in beta testing but is fully functional.
We are thrilled to announce the beta launch of the Yield Protocol on Ethereum.
— Yield Protocol (@yield) October 19, 2020
Incubated by the crypto investment firm Paradigm, the platform’s key feature includes creating a new type of token called fyDai, or fixed yield Dai. It enables fixed-term and rates borrowing/lending using the MakerDAO stablecoin.
Liquidity provisions for Dai are enabled. Once the assets are pooled enough, it can then be borrowed at fixed rates for quarterly periods using ETH as collateral. Decentralized lending platforms such as Maker and Compound charge borrowers a floating rate. Meanwhile, platforms like Yield Protocol enable fixed-rate loans for borrowers.
The blogpost has highlighted that fixed rates are usually the conventional form of lending within traditional finances. The DeFi sector can too also apply its use cases in terms of fixed-rate, fixed-term borrowing, and lending.
Stable Way to Enter DeFi through Yield Protocol
The team plans to move out of the beta testing phase in early November once the October liquidity has successfully matured. The blog post further highlights that the smart contracts underlying the system have been audited, although warned its users that it is still a beta version.
Allan Niemerg, the founder of Yield Protocol, said:
“We expect that there will be unexpected emergent behavior as a result of people using Yield in novel ways, and we do not have the ability to control or prevent users from using the smart contracts as they please.”
Once the beta phase is completed and has sufficient liquidity, it might prove to be as popular as Maker’s Dai Savings Rate. The platform can definitely offer a stable way to enter DeFi, only if Ethereum prices maintain its stability too.