Fixed Income and Airdrop Potential By Defi Dad

How to Earn Fixed Interest on ETH with Element and a Potential Future Airdrop

Before we get started, reminder this is not a recommendation or endorsement to buy any future Element token (if they launch one).

The DeFi world has continued to thrive on variable rate interest, both in good times and in bad. Variable rates have allowed protocols to boast about 1000% APY despite the fact that most variable rates are often only fleeting opportunities to earn yield. Similar to what we’ve covered with the BarnBridge protocol, Element promises to provide sustainable and predictable fixed interest for DeFi lenders. It’s a new protocol working to offer high fixed rate yields while “maximizing capital efficiency, creating market liquidity, and reducing user costs.” 

Launched in July 2021, Element enables users to purchase interest-earning assets like Curve LPs, WBTC vaults, stETH, and more at a discount on AMMs such as Balancer without being locked into a fixed term, while allowing easy swapping between the discounted asset and any other base asset, without withdrawal penalties.

The Element Protocol works by splitting the base asset positions (ie. ETH, WBTC, USDC) via Ethereum contracts into two distinct separate tokens, the principal token vs the yield token. This allows users to sell their principal as a fixed-rate income position. This competitive activity along with the custom curve built on Balancer V2 is what drives high fixed yield markets, bringing liquidity to fixed yield income while minimizing slippage and fees as the discount decreases, ultimately opening the door to new DeFi primitives. The TLDR on this is you can conveniently earn a predictable