From Floating Interest Rates to Fixed Income: The Changing Landscape of DeFi Lending

Early DeFi lending protocols essentially addressed a very straightforward problem: how to efficiently mobilize funds without intermediaries.
Therefore, floating interest rates became the most natural choice—they can quickly reflect supply and demand changes and facilitate automatic adjustments under different market conditions.
However, as DeFi continues to grow, this design centered on “instant efficiency” has begun to reveal structural limitations.
While flexible, floating interest rates almost entirely shift uncertainty onto users. The rate you see today does not equal the final cost you bear; a strategy you believe to be solid may become completely invalid due to a single interest rate fluctuation.

As DeFi evolves from a short-term tool to one that gradually supports medium- and long-term capital, this issue becomes impossible to ignore.

Floating interest rates are suitable for markets but not for planning
The logic of floating interest rates is essentially “letting the market speak for itself.”
More liquidity means lower rates; high demand drives costs up.
This is reasonable in trading scenarios, but in fund management, it means participants must constantly adjust their positions.

You cannot predict true returns in advance, nor can you set clear goals for your funds.
This causes many seemingly stable DeFi strategies to carry hidden interest rate risks.

Over time, DeFi is forced to become a market more inclined toward short-term speculation.
The return of fixed income is not a step backward
Fixed income has existed in traditional finance for over a century, not because it is conservative, but because it respects the relationship between time and risk.
When interest rates and durations are clearly defined, the behavior of funds becomes truly predictable.

Introducing fixed income on-chain is not about replacing floating interest rates but filling a long-standing gap in DeFi.
It allows participants to know exactly what they are exchanging before entering:
A fixed period in exchange for a fixed return.

TermMax represents an upgrade at the structural level
@TermMaxFi does not negate the existing DeFi lending model but introduces new options on top of it.
Through fixed durations and fixed interest rates, TermMax separates risks that were previously intertwined, allowing funds with different preferences to meet their needs.

This means DeFi is no longer limited to “following the market.”
You can choose to bear volatility or lock in conditions.

Lending is no longer just a game of interest rates but a choice of capital structure
As fixed income begins to appear in DeFi, the logic of lending also changes.
It is no longer just about chasing the highest APY but involves a comprehensive assessment of duration, risk, and return.

This shift transforms DeFi from a single liquidity tool into a more complete financial system.
The emergence of TermMax is an important signal of this transition.
#TermMax #TermMaxFi