Fixed Income FAQ

Responses to questions regarding the concept of fixed income
What is fixed income?
  • Fixed income assets are those which represent deposits in yield-bearing opportunities with i) a known maturity date, and ii) a known return for doing so.
How does DeFi offer fixed income?
  • There are a handful of protocols in DeFi today that offer fixed income. They do so primarily in one of two ways. Yield-splitting protocols allow users to isolate the yield generated by a variable rate opportunity into a separate token from their initial deposit. This allows users to earn fixed income either by immediately selling the "yield token" or by purchasing "principal tokens" in the secondary market at a discount to their face value and then redeeming them upon maturity. Fixed-rate lending protocols offer users the ability to lend their assets to a fixed rate loan issuing pool. In either case, FIAT DAO is able to accept such assets with relative certainty around their future value.
Can FIAT DAO interface with real world fixed income?
  • FIAT DAO does not currently support tokenized representations of real world fixed income assets as collateral.