Fixed Term Structure DeFi Borrowing and Lending (Orderbook-based)
Jet Fixed Rate is the original DeFi product that is bringing fixed term structures to DeFi. For the first time, lenders and borrowers can negotiate rates through a central limit order book (“CLOB”), a format familiar to financial market participants. Jet’s Fixed Rate model provides numerous benefits over the variable rate pooled lending design popular throughout DeFi: Both borrowers and lenders know exactly what their rates will be before they borrow or lend and as such can plan ahead and make predictions and projections. Unlike with pooled lending there is no risk of a lack of withdrawal liquidity for lenders - lenders are always guaranteed access to their funds aft the maturation of debt whereas with pooled lending there is substantial risk that the lent liquidity is borrowed out, in which case lenders must wait other users to deposit more liquidity before they can withdraw.
Jet Fixed Rate supports the automatic rollover of debts; termed “autoroll” which can be turned on and configured by users individually to set the minimum lend rate or the maximum borrowing rate acceptable for a loan to roll over (assuming sufficient collateral exists in that user’s margin account).
For a full description of Fixed Rate mechanics and features, see the product documentation page which also includes links to pages describing each Fixed Rate order type (maker/market orders to borrow and lend versus taker/limit orders to borrow and lend) and helps newer users by defining terms and concepts that will be encountered while using the Fixed Rate Application.
The Fixed Rate product is launching with 4 initial markets: 1 day USDC and SOL markets, and 30 day USDC and SOL markets. These four markets allow users to open flexible lending and borrowing positions as well as open the door to other strategies such as taking advantage of interest rate arbitrage between the fixed and variable products. In the future, additional markets can be added through the JetDAO governance process and proposed and discussed in the community forum.