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Fixed-Income Funds

Lenders define their personal Fixed Income Funds. Lenders deposit into their FIF's. And platform matches the FIF's with the borrower's credit lines.

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Lenders lend via their personal Fixed-Income Funds (FIF). They define into which maturities they want to invest a ratio of their assets. This allows lenders to mix different loan maturities and create a preferred loan portfolio.

A FIF consists of four buckets:

  • “Bucket 0” will be invested into Compound’s variable-rate money-market fund.
  • “Bucket 1” will be invested into loans 11–30 days
  • “Bucket 2” will be invested into loans 31–90 days
  • “Bucket 3” will be invested into loans 91–180 days

The investor can also create multiple FIFs. For example, the investor could create:

  • First FIF for short-term lending strategies
  • Second FIF for longer-term lending strategies

Or the investor could, for example, choose only one bucket for their investments:

  • Only bucket 1 for loans 11–30 days OR
  • Only bucket 2 for loans 31–90 days

This means - the lender can choose strategy, which matches best their expectations. Lender can allocate more funds into the "bucket 2" or "bucket 3" - and earn more interest. Or lender could allocate more funds into the "bucket 0" or "bucket 1" - and have higher flexibility, but less interest.

The following assets are supported for lending:

Asset Buckets Etherscan
ETH 0, 1, 2, 3 —
DAI 0, 1, 2, 3 0x6b175474e89094c44da98b954eedeac495271d0f
USDC 0, 1, 2, 3 0xa0b86991c6218b36c1d19d4a2e9eb0ce3606eb48
USDT 0, 1, 2, 3 0xdAC17F958D2ee523a2206206994597C13D831ec7
SMARTCREDIT 3 0x72e9D9038cE484EE986FEa183f8d8Df93f9aDA13

The lender can withdraw the un-invested funds from their FIF. The lender can also terminate the FIF investment. That FIF will not be used for matching anymore. In this case, borrowers pay back their loans, and the lender can withdraw all their funds. This means the FIF investor must wait to withdraw their funds — they must wait until the borrowers pay back the loans.

The borrower pays loan interest to the lender, platform fee (0.5%) and loss provision fund fee.

The lender receives the loan interest into the FIF, which gets then re-invested into new loans. Loan interest is based on the pre-defined yield curves. See more in the section "Interest Rates".

Lenders don't need to pay any fees for creating FIF's, depositing into FIF's or withdrawing from the FIF's. The cost of creating a FIF for the lender is:

  • Pay gas for creating FIF contract
  • Pay gas for depositing into FIF contract
  • Pay gas for withdrawing from the FIF contract

There are no other fees for the lender. See more in the section "Revenue Model".

Further info