Struct Finance, a DeFi platform that offers tailored structured financial products, has launched its innovative Interest Rate Vaults and tranching mechanism, enabling users to earn predictable returns on their crypto investments.
Struct Finance, a DeFi platform backed by Ava Labs, has announced the mainnet launch of its Interest Rate Vaults, a new type of product that lets users create and invest in customized interest rate products based on their risk preferences.
Interest rate products are derived from and linked to underlying yield-bearing assets, such as tokens, derivatives, vaults, pools, and protocols.
They offer different risk-return compared to the underlying assets, making them appealing to many investors.
Struct Finance introduces the concept of tranching, a process that divides each Interest Rate Product into two portions or tranches: a fixed-return tranche and a variable-return tranche.
The fixed-return tranche guarantees a stable return for conservative investors, while the variable-return tranche offers a higher potential return for risk-takers.
The yield from the underlying asset first goes to the fixed tranche to ensure predictable returns. The remaining yield then goes to the variable tranche, which gets amplified exposure to the underlying asset.
This way, conservative investors can get protection from risk-on investors, who in turn can get higher rewards for taking on more risk. Users can choose between fixed or variable tranches according to their risk appetite.
Struct Finance is also integrating with GMX, a decentralized exchange that offers innovative features such as the Liquidity Provider Token (GLP).
Using GLP, Struct Finance can generate predictable yields for its users in the form of fixed and variable returns while providing liquidity to GMX.
GLP holders can earn trading fees from GMX and rewards from other protocols that integrate with GMX. GLP holders can also participate in governance and decision-making on GMX.
The initial offering of Struct Finance’s Interest Rate Vaults is a one-month vault that achieved a total value locked (TVL) of $100,000 shortly after launch.
This vault offers users a choice between a fixed return of 10% or a variable return of up to 65%.
Struct Finance’s Interest Rate Vaults bring a new level of security and predictability to the volatile and unpredictable landscape of DeFi.
They enable users to access structured financial products tailored to their risk-return preferences, providing diversified and dependable returns on their crypto investments.
GMX is integrated with Struct Finance, which employs GLP to generate predictable yields for its users through fixed and variable returns.
This integration enables Struct Finance to optimize returns for its users while supporting the liquidity needs of GMX.
