“Fixed-rate lending is an important milestone for DeFi,” said HiFi CEO Doug Leonard in a press release. “Investors and traders need less-volatile options so that they can plan finances in advance, have predictability in expenses and hedge investments with certainty.”
The launch is scheduled for 5:00 pm UTC.
With a lending product, HiFi is entering into a marketplace featuring some stiff competition. Aave and Cream dominate with nearly $6 billion in total value locked between them, and top 10 protocol SushiSwap is planning a lending offering, BentoBox, for later in the year.
HiFi aims to stand out with a focus on tokenized debt and yield-bearing instruments as collateral. Yield-bearing instruments allow for the fixed rates HiFi advertises, in addition to enabling “the opportunity to better map out finances and trading strategies” with tools like flash loan rate rebalancing and yield swaps.
The announcement notes that while the protocol will initially only offer “USDC stablecoin borrowing with WBTC (wrapped Bitcoin) collateral,” the platform will quickly onboard other collateral types.
Team mentioned Uniswap pool tokens — which yield trading fees but are a notoriously tricky asset to use as collateral — and Compound cTokens as chief candidates.
“Likely the first composability integration we will see is with Uniswap LP tokens or Compound cToken collateral. The team has early versions of these integrations built at this point in time.”
Likewise, there may be a push for big-name users out of the gate. In an explainer video, Leonard made note that enterprise clients prefer the certainty of fixed rates. To this end, the team hinted that there may be a range of developments forthcoming:
“We are explicitly interested, during the growth phase of our protocol, to push the boundaries of what can and cannot be an effective collateral. I think you will see some of the most interesting stories in DeFi come from our team over the next 12 months. It’s going to be a lot of fun.”
HiFi’s MFT token is down 0.6% on the day to $0.0233, with a market capitalization of $217,000,000. The token is up nearly 2,000% on the year, following a run that took place after the announced rebrand.