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Introduction

Tenor Protocol​

The Tenor Protocol is a noncustodial, self-executing fixed rate lending protocol allowing for the permissionless creation of fixed rate lending markets. Through these markets, users can lend and borrow ERC20 tokens at fixed interest rates using a set of fully onchain interest rate AMMs. The Tenor protocol is built as a set of smart contracts compatible with the Ethereum Virtual Machine.

A Modular Fixed Rate Lending Protocol​

Leveraging DeFi's composable nature, Tenor enables the creation of fixed interest rate markets on top of existing money markets such as Morpho, allowing lenders and borrowers to get matched at fixed rates using a bulletin board-like system. At any time before maturity, users can exit their position conditional to sufficient liquidity, roll their lending or borrowing positions forward to longer-dated fixed rate pools, or default back to the underlying money market.

Features​

  • Permissionless Market Creation: Tenor enables permissionless fixed rate market creation conditional to the existence of a variable market on the underlying money market protocol.
  • Noncustodial: The Tenor protocol is noncustodial by design; users interact directly with the protocol's smart contracts.
  • Governance Minimized: Tenor fixed rate market parameters are immutable thereby avoiding the need for any type of active governance.
  • Efficient Matching: Lenders and borrowers can get matched at specific fixed interest rates using a bulletin board style system, improving the matching efficiency of traditional money markets.
  • Fixed Rates: Borrowers and lenders benefit from the certainty of known rates for a set duration when borrowing or lending using markets created on Tenor. For borrowers, the ability to borrow at fixed rates mitigates the need to unwind positions contrary to money markets where rates update block to block.
  • Infrastructure for market curators: Tenor enables market curators to create fixed rate markets and manage them (set roles and fees) according to their preferences.
  • Extending the Money Market Stack: Tenor Markets are built on top of existing money markets. They contribute to the liquidity of the underlying money markets and extend the usefulness of a market by enabling users to lend and borrow at fixed rates across the yield curve.