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Summary of IPOR
Key Points
- IPOR (Inter Protocol Over-block Rate) is the Credit Hub of DeFi.
- First attempt to establish a yield curve representing the average cost of borrowing in DeFi.
- Consists of two main parts: The Index (benchmark interest rate) and The IRDs (interest rate derivative DEXes).
The IPOR Index
- Currently has four IPOR rates: stETH, USDC, USDT, and DAI.
- Essentially different rate behavior.
- Currently spot rates, with a huge market opportunity due to the lack of a yield curve in DeFi.
About IPOR: Empowering the Future of Decentralized Finance
IPOR, the Inter-Protocol Over-collateralization Rate, Emerges as the Pivotal Credit Nexus of DeFi.
In a pioneering effort within the DeFi realm, a yield curve is being established to represent the average borrowing cost in DeFi, leveraging on-chain data published by the largest credit market protocols, including Aave, Compound, DAI’s DSR, and Lido.
The IPOR Protocol is comprised of two primary components: 1. A benchmark interest rate for DeFi, dubbed “The Index,” which is presently available for stETH, USDT, USDC, and DAI. These rates are calculated and published on-chain, serving as public goods within the Ethereum ecosystem. 2. A suite of interest rate derivative decentralized exchanges (DEXes), referred to as “The IRDs,” which provide quotes for 28, 60, and 90-day interest rate swaps across the aforementioned markets.
The IPOR Index: A Comprehensive Benchmark for Cryptocurrency Performance
Presently, four distinct IPOR rates exist, namely stETH, USDC, USDT, and DAI, each exhibiting unique rate behavior. Notably, these rates are currently spot rates, as the yield curve in DeFi is virtually non-existent. This absence of a yield curve presents a substantial market opportunity for the index.
The Innovative Reward Distribution (IRD) Mechanism
IPOR interest rate swaps are available in 28, 60, and 90-day tenors (durations), boasting up to 500x leverage, which renders them remarkably capital-efficient.
IPOR envisions its evolution into a fully decentralized, community-driven DAO. As part of this vision, IPOR Labs is relinquishing ownership, transferring it to the IPOR DAO, thereby entrusting the IPOR Protocol’s complete ownership and control to its token holders. While IPOR Labs will continue to contribute and submit proposals, the ultimate decision-making authority will reside with the DAO, ensuring a truly decentralized approval process.