Yield Nest - Zero Coupon bonds on Injective

Overview

Yield Nest is a protocol that implements a Fixed Rate Lending protocol through the emission of Zero Coupon bonds.
It is deployed on the Injective testnet blockchain and makes use of its native modules, including the TokenFactory and the Exchange modules.

Fixed Income markets represent one of the most liquid markets in traditional finance (around 3x bigger than equity markets). This interest for yield-bearing products is also found in cryptocurrency markets, most notably with liquidity pools for AMMs such as Osmosis or Uniswap, or even as staking (which is an essential part of governance in PoS blockchains).
The main issue with these products is that they typically provide non-fixed interest rates (and even impermanent loss for liquidity provision in AMM) which makes it hard to estimate returns.

Yield Nest addresses this by providing a way to create Zero-coupon bonds which enable users to optimise their capital with clear return targets. The use of Fungible Tokens as well as the reliance on native DEX on the Injective blockchain makes these debt products liquid unlike staking.

The code for the Yield Nest smart contract is available on github. The UI code is also available here.

The protocol has also been deployed to testnet and can be accessed through a dedicated UI.

Key Features

Yield Nest is a flexible protocol and enables the following:
1- Creation of new debt products with different expiration dates and/or different collaterals.

2- Debt positions are represented by Fungible tokens created using the TokenFactory module. As highlighted above these can be traded directly on native markets on Injective, but they can also be sent to other IBC-enabled blockchains such as Osmosis and be used in other protocols.

3- Under-collateralized positions can be liquidated by any user once the Loan-to-value rises too much (this is set at 70% in our testnet deployment). Liquidations prevents bad debt, while liquidators receive a fee.

4- Debt positions are created as zero-coupon bonds, which means the interest-rate is fixed at debt minting time

Testnet

Yield Nest has been deployed on the Injective testnet (injective-888).
We've also created a sample debt asset (USDT_31DEC23) that uses INJ as a collateral, as well as a market to trade the debt itself (USDT_31DEC23/USDT)

Yield Nest address:  
inj19q4flnf78evuhvzcfqhq8x9e800rjraj2whanu   

Debt token denomination (USDT_31DEC23):    
factory/inj1m8vmsa84ha7up6cx3v7y7jj9egzl3u3vyzqml0/test_denom  

Market id for USDT_31DEC23/USDT:  
0xfd359c044664481b486665d3f7c5798faf6c2e5b88ca46399ddef71d9ee31fe3  

We recommend using our dedicated UI to interact with the contract (see Overview). You can also interact directly with the contract using the messages described on the repository readme.