June 21, 2023 – Tortola, British Virgin Islands
Struct Finance a DeFi platform that enables investors to engage with tailored structured financial products linked to digital assets today announced the mainnet launch of its innovative ‘interest rate vaults’ and unique tranching mechanism.
Amid the highly volatile crypto industry, users can now invest in products tailored to their risk-return preferences, providing predictable and diversified returns.
Structured financial products are innovative investment instruments that are derived from and linked to underlying on-chain or real-world assets.
They utilize a variety of credit/risk, liquidity and maturity transformation techniques to achieve specific investment objectives.
Offering risk-return dynamics that deviate from the underlying assets, these investment products appeal to a broad array of investors.
On Struct Finance, different tokens, tokenized derivatives, vaults, pools and protocols interface in a permissionless manner to craft new products, tailored according to the investor’s risk appetite.
Miguel Depaz, a co-founder of Struct Finance, said,
“Traditional financial products aren’t permissionless to use or create. In fact, they are largely inaccessible to most people. We are making these structured financial products accessible and easy to understand for everyone.
“Our mission at Struct is to bring the power of such products to investors with all risk appetites from the risk-averse newcomer to the seasoned crypto native. That’s why we are launching ‘interest rate vaults’ as the first in our line-up of tailored financial products.”
The new interest rate products allow anyone to split and repackage the risk of any yield-bearing DeFi assets in different parts to fit their risk profile through an innovative process called, ‘tranching.’
Every interest rate product is a single vault split into two portions or tranches that have different return configurations.
- A fixed-return tranche for conservative investors looking for consistent returns
- A variable-return tranche for investors with a higher risk appetite seeking superior returns
The yield from the underlying asset flows into the fixed tranche first to ensure predictable returns.
The remainder is then allocated to the variable tranche, which gets enhanced exposure to the underlying yield-bearing asset.
Compared to the fixed tranche, the variable tranche might accrue more yield, less yield or no…
Click Here to Read the Full Original Article at The Daily Hodl…
