Infinity Exchange Launches The Future of Institutional Fixed Income in DeFi To Create The Next $1 Trillion Market
London, United Kingdom / September 1, 2022 / Infinity Exchange, a decentralized finance protocol that provides unprecedented capital efficiency for traders, yield farmers, and real-money investors, has announced the official launch of its Testnet. Infinity Exchange is an Institutional Fixed Income protocol that promises to transform the world of DeFi through a hybrid structure built on the Ethereum blockchain that runs computations and risk management off-chain.
Founded by ex-Morgan Stanley Head of Structuring, Kevin Lepsoe, Infinity Exchange, with its litepaper, seeks to become the foundational rates and risk protocol for the stability and growth of DeFi. The launch is a key milestone that brings institutional interest rate market mechanics and risk management from TradFi to DeFi markets for the first time, setting the stage for institutional adoption and the industry's total value locked to grow rapidly.
Existing DeFi (termed ‘1.0’) protocols were designed and created at a time when there was a great deal of uncertainty around demand for money market products. As a result, early protocol builders made near-term choices to generate widespread interest within a retail-like lending environment. DeFi 1.0 succeeded in proving the viability and tremendous market demand for decentralized, permissionless finance, but is built on unstable foundations with fundamental flaws.
Infinity Exchange establishes a new foundation built upon well-established economic principles, paving the way for institutional use and for trillions of dollars worth of assets eagerly awaiting to be tokenized to enter the new world of DeFi 2.0. Existing DeFi 1.0 protocols are simply incapable of achieving these objectives given computational limitations, oversights and inefficiencies that act as a barrier for institutional adoption and transcendent usefulness. Infinity Exchange revolutionizes the DeFi ecosystem by building a protocol that utilizes the same mechanics and achieves the same efficiencies associated with TradFi markets, and in particular, the interbank lending market.
As institutional investor participation deepens in the crypto market, Infinity Exchange introduces the concept of a Floating Rate with a zero bid-offer used for both lending and borrowing. While DeFi 1.0 has reached a local maxima due to the inefficiencies of utilization-based protocols, Infinity Exchange brings a tried and tested approach to financial markets that embodies the crypto ethos of “We can do it better” with “It’s about time”.
Infinity Exchange will also be introducing the first complete yield curve in DeFi with both floating and fixed rates, enabling traders to hedge their basis/rates risk and speculate along the entire length of the maturity curve. By increasing the array of investable assets along the yield curve, Infinity hopes to dampen volatility across and bring stability to the broader DeFi markets, giving participants an easy way to switch between risky and riskless assets.
Finally, Infinity Exchange will allow for managing a wide array of complex collateral currently with no place to generate yield. This provides unique opportunities for traders to arbitrage interest rate differentials between other lending protocols and Infinity, potentially resulting in massive TVL expansion. Infinity offers leverage to investors holding over $20 billion of TVL that is currently sitting idle on Aave, Compound, Uniswap and Curve. This presents an unprecedented opportunity for consolidation, resulting in upwards of $100 billion of TVL creation and driving interest rates across the DeFi to their market determined risk-neutral levels.
In summary, Infinity Exchange is setting the stage for an institutional, crypto-based fixed income market and paving the way for TradFi investors to enter DeFi en masse, creating the next $1 trillion market.
"The crypto fixed income markets should be 100-times what they are today and we're taking the first two steps in that direction," said Infinity Exchange Founder Kevin Lepsoe. "We're introducing an institutional-quality interest rate protocol that aligns with theoretical finance, all while taking a comprehensive approach to risk management."
"In TradFi, institutional investors are more active in the fixed income markets than they are in the equity markets," Lepsoe continued. "If we want more institutional adoption in crypto, we need to first nail the fixed income markets and it starts here, at Infinity."
About Infinity Exchange
Infinity Exchange is a hybrid interest rate protocol on Ethereum that's building the foundation of the next generation of DeFi. Designed and built by veteran traders, quants, and engineers, Infinity marries theoretical finance with enterprise-grade risk management for an unparalleled, institutional rates trading experience.