Horizon Finance presents an innovative protocol for fixed and variable interest rate swaps

0


Horizon Finance announced the launch of a decentralized interest rate market protocol for DeFi users. The aim of the new protocol is to resolve payment shortfalls in the DeFi space, by providing sufficient margins and by regulating peer-to-peer interactions between market players.

According to a recent press release, the new protocol is necessary to alleviate problems in the current market, where existing platforms with unauthorized entry involve block-by-block resolution for transactions, limiting interaction between market players. The new protocol will allow users to take advantage of fixed and floating interest rates while receiving rewards based on ratios of deposited assets and selected interest rate options.

The proposed toolbox will facilitate inter-protocol operations by relying on a sliding auction market approach. Market players will be able to participate in offers of preferential payment terms, guaranteeing a completely transparent and fair environment for the selection of interest rates.

The basis of the new protocol is derived from the traditional mechanisms for determining market interest rates which have been translated into a decentralized framework. The premise of peer-to-peer interaction will stimulate the formation of floating interest rates by offering users a choice of two options: to act as a variable rate liquidity provider in the rate maker role or as a participant in a continuous auction in the role of a rate bidder.

The lowest IR bidder in the pool will thus provide payments until it runs out, providing a maximum return of 50% for all participants. The protocol greatly simplifies market transactions by eliminating both counterparty risks and redundant liquidation mechanisms.

The solution is being introduced to balance the overheated and highly unregulated DeFi market, where a lack of risk hedging instruments has the effect of discouraging potential investors and discouraging active investors.

The founders of Horizon Finance also plan to roll out new features in the near future. Among the instruments to be released are an automated yield configurator and a bot wizard. The latter will provide users with advice on building portfolios based on interest rate options, maturities and available cash pools, and other parameters.

The protocol received immense support from leading investors, raising more than $ 1.3 million from Framework Ventures, Alameda Research, NGC, Ruby Capital and other venture capital funds.

Image from Pixabay


Leave A Reply

Your email address will not be published.