Term Structure, a non-custodial fixed income protocol offering peer-to-peer, fixed-rate, fixed-term lending options in decentralized finance (DeFi), has secured seed funding of $4.25 million in a series of funding rounds of initial resources.
Cumberland DRW led this round, with participation from Decima Fund, HashKey Capital, Longling Capital, and MZ Web3 Fund. The initial fundraising brings Term Structure’s total funding to more than $8 million to date. Speaking about why it led the funding round, Cumberland DRW stated: “Fixed income products are a fundamental element of traditional financial market structure, and the demand for these products in DeFi markets is an important sign of the growing maturity in this market sector. Term Structure, led by industry veterans, is an interesting investment for us and reflects our commitment to investing in innovative solutions that solve real market needs.”
At TradFi, fixed income products allow institutions and individuals to forecast future cash flows and assess the relative value of different investment opportunities. However, these products are currently absent in DeFi. With the Term Structure Protocol, users can use fixed income products to periodically earn interest to ensure a reliable income stream or lock in fixed rates to control financing costs. Additionally, once fundamental fixed income products are established, they accelerate the full development of sophisticated financial products, including forwards, futures and options. These tools can be used for hedging, evaluating, and pricing financial instruments.
The Term Structure Protocol is available at https://app.testnet.ts.finance/ on Ethereum Goerli. This protocol currently has two main markets on its platform. In primary markets, users can place orders to borrow or borrow tokens with fixed interest rates and fixed expiration dates. Once orders are matched, borrowers will be loaned tokens and must pay their debts before the due date to get their collateral back. Lenders will receive fixed income tokens, redeemable for principal plus interest on maturity. In secondary markets, users can buy and sell fixed income tokens through the order book trading system.