Tempus Finance: Decentralized Fixed Income

Time Stamp: February 9, 2022 12:52 PM
Source Node: 1169828

Today, more and more investors want to explore blockchain as its potential to the finance industry, Tempus Finance is here to meet the demands and give a new way to approach blockchain investments.

Blockchain technology has become one of the leading innovations and has received a lot of attention over the past decade, especially in the finance industry.

Holding promises such as reducing fraud, ensuring quick, and secure transactions and trades, blockchain technology is transforming everything from payments transactions to how money is raised in the market.

As such, we have seen a boom of blockchain-based finance platforms which are expected to replace the traditional banking industry.

What Is Tempus Finance?

There are many financial uses provided by a blockchain. Here, Tempus is a future yield tokenization and fixed-rate protocol that is built on the Ethereum network.

In addition, Tempus also works as a yield aggregation tool aiming to deliver additional returns on yield-bearing tokens.

In other words, it will charge fees to Tempus that will be redistributed to its token holders.

Launched in March 2021 by the pair founders David Garai and Djordje Mijovic, Tempus is a result of the understanding a need for interest rate swap products or fixed income in DeFi which are come from David’s experience when the founder worked in the interest rate derivatives space in TradFi.

To date, the protocol has successfully raised over $30 million through funding rounds with the participation of some of the leading investors in the crypto space such as Lemniscap, Jump Capital, Distributed Global, GSR, Wintermute, or Tomahawk.

Currently, the platform can be found on Twitter, Discord, Telegram, and Medium.

How Does Tempus Work?

Most forms of yield farming return a variable rate of yield so that users can be subject to unpredictable fluctuations in their returns when depositing their assets.

At the present, there is no easy capital-efficient way to obtain a fixed yield or otherwise speculate on the receivable rewards. This is where Tempus steps in.

The protocol offers three different use cases and each of which has a unique value proposition. Tempus fixes your future yield using any supported Yield Bearing Token such as stETH, and cDai.

It also can offer fixed income to risk-averse investors by speculating on the rate of future yield of any supported Yield Bearing Token.

Moreover, Tempus provides liquidity to earn additional swap fees in addition to yield earned through yield farming protocols by depositing any supported Yield Bearing Token.

The current pools on Tempus offer short-term maturity contracts.

However, offering longer-term contracts, quasi-perpetual pools, and leveraged fixed-term contracts on Tempus are features that will be available as the company grows.

Therefore, the platform users are provided higher interest rates for the same cryptocurrency as compared to the interest rate offered by the underlying yield aggregating platform.

Although Tempus currently only operates on Ethereum, it is being developed and expanded to become the market-leading fixed yield protocol across all major blockchains such as the integration with Yearn on Fantom.

While the high gas fees associated with transacting on L1 Ethereum are pricing out a significant portion of users, many of these users have migrated over to other chains as a result, one of which is Fantom.

Fantom has seen explosive growth in volume and total value locked (TVL), as well as the interest rates available on Fantom, are also significantly higher at present.

As a result, the appearance of Tempus on Fantom brings fixed yield to Fantom. Yearn is the first Fantom integration and the integration will allow Tempus to bring fixed yields of over 20% APR to users.

The launch will be along with pools available for MIM, DAI, USDC, WBTC, and WFTM, with varying maturity dates.

The following pools are available:

  • Lido stETH with the 3-month term and maturity Date is 31 March 2022
  • Lido stETH with the 9-month term and maturity Date is 30 August 2022

Why Tempus Works

The DeFi lending and borrowing market have only been able to offer variable rates based on the market conditions and many other factors and offering a fixed rate on DeFi has been a challenge.

The existing protocols that have tried to do this are either offering very low to negligible rates or through Liquidity Mining rewards.

Taking inspiration from the bond markets in traditional financial markets, Tempus has designed and built a protocol that allows users to fix their yields or leverage them when they expect the interest rates to fall or rise.

This is also one of the major differences from other competitors in the market.

While other competitors such as Element and Pendle have different AMMs including liquidity pools for Principal, Yield tokens, and stablecoins, Tempus has a single simple and capital-efficient custom AMM for Principals and Yields.

This not only simplifies users’ experience and increases the yield on the platform, but also is the first protocol that has successfully done this in a capital-efficient way.

Tempus is focusing on retail users, institutional investors, staking businesses, DAOs holding significant treasury assets, TradFi businesses offering fixed income on crypto portfolios, and existing or new custodians for cryptocurrencies.

Its B2B offers fixed income for crypto holders, meanwhile, B2C offers fixed income to risk-averse investors, higher interest rates for the same cryptocurrency as compared to the interest rate offered by the underlying yield aggregating platform, and leveraged yields for degens with investment strategies.

Some of the things that may interest you in the protocol USP Tempus are simple user interface and experience as well as a mature crypto community on Discord and Twitter.

How to Get Started in Tempus?

The process to get started with Tempus Finance is quite simple:

Step 1: Go to Tempus.Finance and click on ‘Launch App’ that will take you to the dashboard where you will be able to manage your yield-bearing tokens and/or underlying assets. You can also change the language of the app by clicking on the ‘Settings’ button.

Step 2: Select the pool in which you would like to deposit your yield-bearing tokens or underlying assets from the pools available on the dashboard. The different pools available on the dashboard show various metrics, including protocol, maturity, fixed APR, LP APR, TVL, balance, and the available to deposit, which shows the total amount of the asset that can be deposited in the pool.

Step 3: Clicking on the ‘Manage’ button will take you to the deposit window for Basic users. This feature allows you to fix your future yield or provide liquidity to the pool to earn additional yield. Users will also get all the information relevant to the pool including the term of the pool, the TVL, the ratio in which the Principal to Yield tokens can be deposited in the liquidity pool, the 7-day volume of the pool, and more.

Step 4: Select whether you would like to deposit ETH, or stETH.

Step 5: By clicking on the ‘Fix Your Future Yield’ button, you can fix your future yield. This button allows you to deposit your yield-bearing tokens to mint an equal number of Principals and Yields.

Great Tools for Blockchain Finance from Tempus

With the boom of blockchain-based finance platforms recently, Tempus may be one of the significant platforms for those who want to explore this technological innovation in the finance industry in order to make an income.

While the market is volatile and fluctuates constantly, fixed rates are a safer bet in the dynamic crypto market.

Tempus offers DeFi-native interest rate swaps for the same cryptocurrency, fixed decentralized income offering to risk-averse investors along with leveraged yields for degens with investment strategies.

To learn more about Tempus Finance – just click right here!

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