Swivel Finance

Decentralized finance (DeFi) has been gaining popularity in recent years, providing an alternative to traditional financial services that are controlled by centralized institutions.

However, the volatility of DeFi rates has been a major obstacle for effective portfolio and risk management, which has deterred many from participating in the market. In response to this, Swivel Finance has emerged as a decentralized lending platform that provides capital-efficient solutions for tokenized cash-flows.

Through its unique architecture and professional trading interface, Swivel enables wider market participation, making DeFi more accessible and inclusive for all. This article will delve deeper into Swivel Finance’s infrastructure and explore how it facilitates fixed-yield lending, yield boosting, and the core infrastructure necessary for fixed-maturity rehypothecation, providing new opportunities for investors and traders to manage risk and gain exposure to different markets.

Swivel provides lenders the ability to split an interest generating token into two separate cash-flow tokens until a future date.

One token representing the future yield generated (nTokens), and another representing ownership of an underlying token, redeemable at that future date (zcTokens).

In Swivel’s design these two are referred to as nTokens (yield-generating tokens), and zcTokens (tokens redeemable at maturity).

This flexible architecture facilitates a number of interesting use-cases, namely fixed-yield lending and yield boosting (rate-trading), and provides the core infrastructure necessary for fixed-maturity rehypothecation (options markets, futures markets, etc.,).

By splitting the interest generating token into two separate cash-flow tokens, Swivel creates a more efficient way to manage risk and gain exposure to different markets. For example, a lender may only want to participate in a fixed-yield lending opportunity, and Swivel allows them to do so without having to worry about market volatility.

Additionally, yield boosting, or rate-trading, is made possible through Swivel’s architecture. Lenders can boost their yield by trading their nTokens on the open market, while still retaining ownership of their underlying token through the zcTokens. This allows for greater flexibility and customization in managing risk and maximizing returns.

Moreover, Swivel’s design provides the core infrastructure necessary for fixed-maturity rehypothecation, which enables options markets, futures markets, and other sophisticated financial instruments. This opens up even more possibilities for market participation and risk management, as well as creating new opportunities for investors and traders.

In short, Swivel’s infrastructure and professional trading interface enable wider market participation by providing capital efficient solutions for tokenized cash-flows. With its flexible architecture, Swivel allows for fixed-yield lending, yield boosting, and the core infrastructure necessary for fixed-maturity rehypothecation. This creates new opportunities for investors and traders to manage risk and gain exposure to different markets, ultimately making DeFi more accessible and inclusive for all.

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