Voltz Protocol Launches First TradFi Rates Trading for DeFi on Avalanche

June 10, 2023
by

Voltz Protocol, a synthetic interest rate swap (IRS) AMM with over $20B notional traded, launches the ability to trade SOFR (Secured Overnight Financing Rates) on Avalanche. Now anyone in the world where Voltz is available can access SOFR via Voltz’s decentralized interest rate swap protocol. This marks the first time TradFi rates established by the Federal Reserve can be hedged by those outside of TradFi —bringing TradFi off-chain rate hedging and speculation to DeFi via Avalanche.

SOFR is the average rate at which institutions can borrow US dollars overnight while posting US Treasury bonds as collateral. Everyday investors, whether they are aware or not, are impacted by the SOFR and Fed Funds Rate because their cost of borrowing along with any investments they may hold are correlated to Federal Reserve policy. For TradFi traders, it’s valuable to be able to have access to trading SOFR rates because it allows them to hedge their borrowing and exposure to Fed policy decisions. Conversely, outsiders to TradFi are at a disadvantage because they lack access to the same tools.

Simon Jones, CEO & Co-Founder of Voltz Labs, said, “Everyone is exposed to what the Fed decides to do; however only a handful of institutions have access to interest rate swap markets that allow them to hedge that exposure, until now. The launch of SOFR on Voltz Protocol changes this whilst simultaneously bridging the two financial worlds by making traditional financial markets accessible on DeFi rails.”

The SOFR integration on Voltz Protocol is made possible by Avalanche, a decentralized, open-source smart contract platform, and RedStone, an oracle provider that delivers frequently updated, reliable and diverse data for dApps and smart contracts.

Morgan Krupetsky, Director of Business Development for Institutions and Capital Markets at Ava Labs, said, “One of our core focuses for Avalanche is to bridge the gap between TradFi and DeFi while delivering parity with the speed and user-friendliness of Web2 systems. Launching SOFR on Voltz Protocol exemplifies the innovation we need to take DeFi to the next level. We are excited to be a part of bringing these financial opportunities to the forefront and driving innovation throughout DeFi.”

Marcin Kazmierczak, COO and Co-Founder, of RedStone, provider of off-chain data to Voltz SOFR trading, said, “At RedStone, we understand that data is the holy grail of unlocking DeFi’s full potential. We are excited to be the first Oracle delivering SOFR to DeFi via Voltz’s interest rate swap AMM on Avalanche, bringing traditional finance opportunities for hedging and speculation to any and all users, including institutions.”

About Voltz Protocol

Voltz Protocol provides the underlying framework DeFi needs to become the world’s financial system through its decentralized, transparent, and open-source solutions. Voltz is DeFi’s first synthetic interest rate swap (IRS) AMM with more than $20B in notional trade volume, enabling decentralized access to IRS trading, a market opportunity that had previously only been accessible to banks and TradFi institutions. DeFi’s first non-custodial clearing house, launched via Voltz, enables margin to be shared across trading venues, solving the liquidity fragmentation issue that traders currently must navigate across DeFi. Voltz puts the power of rate trading and liquidity into the hands of everyday traders and developers, ushering in a new era of composable, permissionless, and open-source financial products.

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About Avalanche

Avalanche is a smart contracts platform that scales infinitely and regularly finalizes transactions in less than one second. Its novel consensus protocol, Subnet infrastructure, and HyperSDK toolkit enable Web3 developers to easily launch powerful, custom blockchain solutions. Build anything you want, any way you want, on the eco-friendly blockchain designed for Web3 devs.

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