We’d like to share an out-of-box solution for the provision of fixed-rate DAI loans of arbitrary term-length on MakerDAO through application of the Pairwyse protocol built atop Maker’s credit and deposit instruments.
The Pairwyse protocol specifically solves the impossible trinity for MakerDAO by creating a fixed-rate marketplace for borrowers and lenders without restricting Maker’s use of floating rates and market-driven capital flows to maintain the DAI peg and grow its supply.
Pairwyse does this by facilitating fixed-rate agreements between DAI borrowers and lenders in a decentralized non-custodial peer-to-peer manner.
The fixed rates are produced by smart contract-automated cash flows between borrower and lender escrows relative to floating rates during the loan term.
Pairwyse additionally inherits Maker’s credit enhancements, translating them into full principal protection for lenders and capital efficiency for borrowers.
By funnelling existing DAI investors back into a Maker-centric lending marketplace, Pairwyse can provide Maker:
- a fixed rate facility to scale RWA and institutional vaults rapidly and sustainably
- freedom to apply as-dynamic-as-possible governance over DAI peg and supply
- a means to scale transaction volume and risk premiums in a DAI neutral manner
- a channel to funnel DAI holders back into Maker and away from competitors
- a stronger user network and loyalty through scalable peer-to-peer transactions
Pairwyse is already deployed on mainnet and requires no feature changes to the Maker protocol to create user value now. A front-end interface can be accessed at www.pairwyse.io to enable P2P borrower-lender deals.
We believe a fixed-rate marketplace can readily solve the impossible trinity for Maker in a scalable manner. As such, we would like to seek the wider Maker community’s feedback on Pairwyse and its utility towards scaling Maker.