Fixed Rate (Lending)
A stable interest rate locked for a specific period in DeFi lending.
What is Fixed Rate (Lending)?
Fixed rates provide certainty for suppliers or borrowers, unaffected by pool utilization changes. Protocols like Notional Finance and Aave v3 offer fixed-rate lending, where a borrower might lock a 6% rate on DAI for six months. Fixed rates are less common but growing, with $2 billion in fixed-rate loans in 2025, per DefiLlama.
Fixed rates mitigate volatility risks, appealing to conservative users. In 2024, Notional’s fixed-rate pools saw 30% adoption growth, offering stability during market swings, though rates are often higher than variable ones to account for risk.
Related Terms
MiCA
EU regulation governing digital assets, including stablecoins, for market integrity and consumer protection.
Active Management Burden
The ongoing requirement for liquidity providers to monitor and adjust positions in DeFi to optimize returns and mitigate risks.
Linea Chain
Consensys' zero-knowledge Ethereum Layer 2 rollup, emphasizing privacy and ETH economy strengthening through burn mechanics.
Grayscale
One of the world's largest digital asset investment platforms, offering regulated products for digital assets exposure including trusts and ETFs of Bitcoin and Ethereum.
Insurance Fund
A reserve fund used to cover losses from liquidations or system imbalances.
Genius Act
Genius Act 2025, an U.S. legislation to regulate stablecoins, focusing on reserves and compliance.