Having raised $2.5 million, how does Tenor match both lenders with fixed interest rates? |Super early project attention

Author: Grapefruit, ChainCatcher

As the crypto market is downward, not only products that deposit coins and generate interest and hold U interest are more popular, but fixed-interest rate lending agreement products are also popular in the market.

On February 25, fixed-interest lending platform Tenor announced that it had completed a $2.5 million seed round of financing, led by Cherry Crypto, and also participated in the investment by Coinbase Ventures, as well as Curved Ventures, Moonwell, and Etherfi protocol developers.

Unlike mainstream lending agreements such as Aave and Compound on the market, Tenor hopes to create a fixed-interest rate lending product.

Tenor targets to become a fixed-rate lending infrastructure

Tenor made its debut in August last year, aiming to build a first-class fixed-rate lending infrastructure for the on-chain economy, supporting anyone to deploy fixed-rate lending market products, and achieve the matching of borrowers and lenders in the form of fixed-rate interest rates.

In essence, Tenor is not just a lending application, but also an infrastructure for developing lending products. It provides a complete toolkit for the deployment of fixed-interest lending products, which supports developers to deploy fixed-interest lending functions or products without permission, such as further expanding fixed-interest lending products based on existing lending agreements such as Morpho and Aave.

At present, the on-chain lending market is mainly dominated by floating interest rate lending agreements such as Aave, Compound and Morpho. These products have undergone many cycle iterations and optimization of risk management strategies in the market, and have developed relatively stable. However, since the product adopts a floating interest rate strategy, such as the loan interest rate of Aave, the leader in lending agreement, fluctuates from 3.16% to 60%, especially at the peak of the market, the floating loan interest rate may rise sharply, and the loan interest rate is usually as high as 20% to 40% of the loan interest rate. In the market trough, the loan interest rate will drop to freezing point, which can even be ignored, affecting the borrower's user experience.

These problems may not be obvious to crypto-natives, but are very unfriendly to institutional users entering the chain, but undoubtedly restricts the expansion of the on-chain lending market to more traditional financial use cases. As more and more institutional users and funds enter the on-chain world, the demand for fixed interest rates continues to surge.

Tenor hopes to introduce more diverse lending products on the chain by creating an efficient fixed-rate lending infrastructure that allows lenders and debits to match directly on the chain at fixed rates.

The operation form is more similar to the on-chain version of traditional

financial P2P lending

The specific implementation form is: Tenor builds a fixed-rate AMM based on Uniswap V4 Hook (hook), which supports users to borrow at fixed-rates, and this function can be integrated with other lending protocols.

In terms of product design, Tenor borrows the P2P order matching mechanism of the Morpho lending agreement, and supports anyone to create a fixed interest rate fund pool through Tenor, set fixed interest rates and maturity of lending, thereby reducing the structural interest rate spread in the traditional lending market and allowing the borrower to determine the borrowing cost, and the borrower can match according to their real needs.

To put it more specifically, Tenor provides a set of lending AMM toolkits that allow users to lend and borrow at specific interest rates, set maturity dates, etc.

Users use Tenor to create a fixed-rate fund pool, setting the interest rate, loan term, mortgage assets or some restrictive conditions according to their needs. For example, the lender can set a limit order and borrow 1,000 USDC at an interest rate of 8%, while the borrower can deposit the collateral and borrow 1,000 USDC at an interest rate of 8%, and the borrower can then use it according to his real situation.

From the perspective of operational form, Tenor is more like the previous traditional financial "P2P lending" and provides a matching platform for lenders. The fund provider (borrower) can publish loan subjects with fixed interest rates and fixed terms. The fund user (lender) can choose matching subjects according to their own situation and repay principal and fixed interest upon maturity.

Tenor fixed interest rates can provide borrowers and lenders with a more predictable user experience, addressing the user experience and capital efficiency issues of existing floating rate lending agreements.

In addition, Tenor also supports existing Aave, Uniswap and other platforms with fund pools, creating fixed-rate fund pool products, etc.

**Audit fees are backed by Uniswap subsidy, and seed round has raised

$2.5 million**

Since Tenor's interest rates are developed based on Uniswap V4 hook products, they are also involved in the Uniswap Hook Incubator activity. On January 23, the Uniswap Foundation announced the list of the first nine projects to receive audit subsidies from the incubator, providing a total of US$1.2 million in funds. The winners list includes the Tenor list, that is, the security audit fee of Tenor Labs will be supported by the Uniswap Hook Incubation Bonus.

According to official information, Tenor plans to conduct an audit in 2025, and the code auditing service will be provided by security audit company Spearbit.

On February 25, Tenor announced the completion of a $2.5 million seed round. The round was led by Cherry Crypto, and also participated by Coinbase Ventures, Lattice Fund institutions, as well as developers from Curved Ventures, Moonwell, Degenscore, and Etherfi protocols.

At present, Tenor products have not been released yet. It is reported that Tenor is currently testing online deployment and comes with a streamlined application that allows early users to test core functions.

(This article only introduces early projects and is not used as investment advice.)