What is Interest Exchange?

Interest Exchange is a fixed-rate overlay for variable-rate DeFi debt. A borrower keeps the underlying lending position and opens a Fixed Rate Token (FRT) position for a chosen notional and maturity. A backer supplies the Variable Rate Token (VRT) reserve that absorbs the capped spread between the fixed and variable legs.

The Problem

DeFi borrowing rates change with market utilization. That makes future interest expense difficult to budget and leaves borrowers exposed to rate volatility.

The Solution

Borrowers request executable, signed quotes from backers. Accepting a quote atomically funds the series reserve and opens the borrower's fixed-rate position.

• Borrowers exchange a capped variable rate for a known fixed rate on a selected debt notional.
• Backers provide the reserve and receive VRT shares that take the other side of the spread.

How It Is Different

Interest Exchange settles the fixed and floating legs over time and uses prepaid as coverage for net borrower payments, rather than collecting the full gross fixed-interest bill for the term at opening. That preserves productive capital, especially in leveraged loops. See What Prepaid Means and the 12x example.

Interest Exchange does not refinance the underlying debt. The collateral and debt remain in the lending protocol (or in a dedicated managed account for protocols that do not support account delegation), while InterestRatePool tracks the fixed-rate overlay and prepaid coverage.

The current production deployment is on Base. The contract layer also contains adapters for additional lending protocols and networks; an adapter being in the repository does not imply that it is active in production. See Contract addresses for the deployed Base configuration.