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Fixed Rate

Fixed-Rates and Fixed-Terms​

In a fixed-rate, fixed-term structure, both the interest rate and the duration are defined at the time a position is created and remain unchanged until maturity.

This structure provides:

  • Borrowers with upfront clarity on their rate, enabling predictable cost of capital and more efficient peer-to-peer execution.
  • Lenders with guaranteed rates that are unaffected by market volatility, enabling to allocate capital over longer time periods with certainty.

How Fixed-Rates Work on Tenor​

Tenor offers fixed-rate, fixed-term lending and borrowing through the Morpho V2 infrastructure. When a user initiates a position through Tenor, they are matched with a counterparty at an agreed rate and duration on Morpho V2. For borrowers, the collateral assets are deposited on the Morpho contract and funds are sourced from the counterparty programatically.

Tenor provides a streamlined interface along with advanced tools to simplify access to fixed-rate markets, manage positions, and facilitate renewals at maturity.

Why Fixed-Rates Matter​

Fixed rates provide the predictability that onchain finance needs to support more advanced use cases, attract institutional capital, and serve retail users who are accustomed to fixed rates over set terms.

Most onchain borrowing today relies on variable rates, which can fluctuate unpredictably and force users to unwind their positions to react to changing market conditions. Fixed rates eliminate that uncertainty. Borrowers know their exact interest rate cost from the start, allowing for precise planning and reliable execution. Lenders, in turn, benefit from transparent, stable rates.

As the ecosystem matures, fixed-rate infrastructure is key to unlocking broader adoption.