FIAT DAO seeks to bring excitement to fixed income DeFi
DeFi is changing the financial sector, making certain financial services more accessible and readily available for anyone who wants to use them. Since its initial boom a couple of years ago, the DeFi space has continued to grow and evolve, with the addition of new and more sophisticated instruments.
One such development has been the emergence of fixed income protocols, which make use of stablecoins to address a pressing issue with the early iterations of DeFi protocols, namely, the unstable returns that they provide due to the price volatility of traditional crypto assets like Ether. In contrast, fixed income protocols offer guaranteed stable annual yield rates, which makes them a desirable option for many DeFi users. However, they can be even bigger and FIAT DAO, a project incubated by BarnBridge, is trying to make fixed income more attractive.
The start of your DeFi journey
The team behind FIAT DAO has identified an opportunity to take the fixed income space to the next level. Currently, the main problem with fixed income DeFi stems from the fact that while the returns it offers are stable and guaranteed, they are not particularly attractive. Even the highest paying fixed income protocols typically offer yield rates of around five percent. This limits the potential reach of fixed income protocols, as most users in the crypto community tend to be drawn to riskier, but potentially more lucrative, propositions. But what if you could maximize the returns from fixed income, without compromising the stability those protocols offer? Well, FIAT DAO believes it has the solution.
FIAT DAO aims to help make “fixed income assets the start, not the end, of your DeFi strategies”. To that end, the protocol allows users to mint FIAT – an acronym for “fixed income asset token” – against their fixed income asset positions in other DeFi protocols. That way users are able to essentially borrow additional funds against assets that are already generating passive income.
Still under development, at launch, the FIAT DAO protocol will support several overcollateralized protocols, including BarnBridge, Notional, Element and Yield. The v1 version is set to launch later this month.
LimeChain is a core technical partner of and a contributor in FIAT DAO and has been involved in the development of various aspects of the FIAT protocol.
As strong believers in DeFi, we’re eager to continue to support the project beyond v1 and help the FIAT team achieve its ambitious plans for the future.