The Indian Delta Exchange has just announced a new product related to the DAI stablecoin and in particular to the DAI Interest Rate Swap (IRS) which also allows leveraged trading.
As everyone knows, this type of stablecoin allows to obtain an interest through what is called the “DAI Savings Rate or DSR”, a system managed by a smart contract for which those who want to deposit stablecoin receive a very high interest.
Obviously the interest is not fixed but is variable and depends on several factors, but this instrument launched by the exchange allows to determine a fixed interest, as explained by the CEO of Delta Exchange, Pankaj Balani:
“Interest rates in DeFi vary based on platform and market conditions, which makes it difficult for borrowers to manage cash outflow and lenders to predict how much interest deposited funds can earn. With the launch of Interest Rate Swaps for the single biggest asset in DeFi, we aim to empower borrowers with better instruments to manage variable risks and liabilities.”
In fact, this type of contract allows all DAI users to know in advance how much interest they will receive for the swap.
These contracts will have a quarterly maturity period and allow a leverage of 400x on the value that can be exchanged.
The development of DeFi and DAI
The development of decentralized finance (DeFi) has given a new impetus to the stablecoin sector, especially thanks to decentralized assets such as the DAI stablecoin, launched by the MakerDAO protocol, which allows anyone to create them by putting other assets such as ETH, BAT, wBTC and others as collateral.
So little by little we are also witnessing the introduction of instruments that belong to the traditional finance but that are moving and evolving in the decentralized one, thanks to the advantage of being accessible to everyone and without any particular limits.
We are talking about well known instruments but for which we need an in-depth knowledge because if it is true that they can bring an incredible benefit, on the other hand we have the possibility to lose all our assets without even realizing it and in a few hours, as happened during the cryptocurrency crash in mid-March.