The firm is introducing the concept of a Floating Rate with a zero bid-offer used for both lending and borrowing. It also wants to launch 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.
Infinity Exchange has launched the Testnet – the Minimum Viable Project (MVP) – of its Institutional Fixed Income protocol that caters to traders, yield farmers, and real-money investors.
The London-based DeFi protocol uses a hybrid structure built on the Ethereum blockchain that runs computations and risk management off-chain.
At the helm is founder Kevin Lepsoe, former Head of Structuring at Morgan Stanley, based in Hong Kong. There, he led a team of strucfturers, quants, and traders who worked with funds, financial institutions, and governments. His career also includes leadleading roles in credit derivatives and FX roles at Barclays and ING Barings, based in Hong Kong and Singapore.
Prior to founding Infinity Exchange in June 2022, Lepsoe built two other startups: Notey and Chinafy. Now, he wants to make his new venture, Infinity Exchange, the foundational rates and risk protocol for the stability and growth of DeFi.
Infinity Exchange aims to bring together institutional interest rate market mechanics and risk management from TradFi to DeFi markets for the first time. This would constitute a milestone for the ecosystem because until now, early protocol builders focused on generating widespread interest within a retail-like lending environment and built “DeFi 1.0” on unstable foundations with fundamental flaws, the firm claimed.
Crypto fixed income markets should be 100-times what they are today
Kevin Lepsoe, Founder of Infinity Exchange, commented: “The crypto fixed income markets should be 100-times what they are today and we’re taking the first two steps in that direction. 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. If we want more institutional adoption in crypto, we need to first nail the fixed income markets and it starts here, at Infinity.”
Infinity Exchange wants to bring the industry into the new world of “DeFi 2.0” 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.
The firm is introducing the concept of a Floating Rate with a zero bid-offer used for both lending and borrowing. It also wants to launch 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.
Infinity believes that, by increasing the array of investable assets along the yield curve, volatility should decrease and bring stability to the broader DeFi markets.
The exchange will allow for managing a range of complex collateral currently with no place to generate yield, thus enhancing interest rate arbitrage opportunities between other lending protocols and Infinity.
The crypto fixed income platform also offers leverage to investors holding over $20 billion of TVL that is currently sitting idle on Aave, Compound, Uniswap and Curve.
