How to Earn Up to 60% with Stablecoins by Defi Dad

DeFi yield has been known for high APYs but over short timeframes. We’ve all become accustomed to lending to protocols like Aave knowing the yields can go up or down depending on demand to borrow and the amount of liquidity supplied. DeFi thrives on capital efficiency and knowing you can withdraw whenever you like to seek higher returns elsewhere. However, in traditional finance, fixed rate yields are very popular because they allow investors to commit capital with a guaranteed return, often locked up for a set period of time. 

One of a few innovations coming to DeFi are products that offer fixed yield. DeFi builders know that we can grow more rapidly by attracting large capital allocators from TradFi who recognize parallels in DeFi but with higher yields.

BarnBridge has been the dominant leader in this race to tokenize risk and develop the first tranche lending products in DeFi. Today, BarnBridge boasts over $122M TVL with senior tranches offering fixed lending rates, subsidized by junior tranches offering variable rates who are also receiving liquidity mining rewards in the form of the BOND governance token.

Pooled collateral (ie USDC or DAI) is deposited by BarnBridge into lending protocols or yield generating contracts like Compound, Aave and Cream. The yield is bundled into different tranches and tokenized. This allows one to buy the most senior tranche with a fixed interest rate locked in for up to 1 year, at a lower yield with a much lower risk profile while those in the junior tranches get higher yield, at a variable rate, can withdraw whenever they like, and have a much higher risk profile.