A researcher from the crypto asset investment firm, Image, has co-authored a whitepaper for a new decentralized finance, or DeFi, lending protocol boasting stock-still-involvement rates.

The whitepaper for Yield protocol was written by Image'due south Dan Robinson and Allan Niemberg — who announced the project on May viii.

Niemberg also announced that Yield Protocol has received seed investment from Paradigm, which will be designated toward edifice the initial version of the product.

New DeFi protocol promises fixed-charge per unit lending

The Ethereum (ETH)-based protocol purports to introduce "fixed-term, fixed-rate lending and interest-rate markets to decentralized finance."

Yield's whitepaper describes "a standard for a token that settles based on the value of a target nugget on a specified future date, and which is backed by some quantity of a collateral nugget."

While DeFi protocols like MakerDAO (MKR) have garnered pregnant popularity within the crypto community over the by years, the floating nature interest rates associated with these vehicles accept proven to be subject field to pregnant volatility — with Maker loan fees fluctuating between 0.five% and 20% during 2022.

Yield Protocol takes inspiration from 'goose egg-coupon bonds'

Yield Protocol'southward first utility will facilitate the creation and issuance of ERC-20-based zero-coupon bonds — a tradable debt instrument that pays its holder at a fixed price on maturity. The whitepaper states:

"yTokens are like naught-coupon bonds: on-chain obligations that settle on a specific futurity engagement based on the toll of some target nugget, and are secured by collateral in some other nugget."

The first of Yield'southward bonds, dubbed yTokens, will be yDAI — allowing users to borrow and lend MakerDAO'south stablecoin Dai at fixed rates using ETH as collateral.

$900 million is currently locked up in DeFi protocols in total, of which MakerDAO represents 53.4%.