The Problem with Variable Rates
Traditional DeFi lending protocols like Aave and Compound use variable interest rates that fluctuate based on utilization. While this works for the protocol, it creates significant problems for users.Rate Volatility is Extreme
| Protocol | Average Daily Volatility | Max Single-Day Swing |
|---|---|---|
| Aave USDC | 15-25% | 78% |
| Compound USDC | 12-20% | 65% |
| Centuari | 0% | 0% |
Real Consequences
For Lenders
You deposit expecting 8% APY. A week later, rates drop to 2%. Your yield projections are worthless.
For Borrowers
You borrow at 5% APY for a leveraged trade. Rates spike to 25%. Your position becomes unprofitable, or worse, liquidated.
80% of Liquidations Are Rate-Driven
Research shows that 80% of DeFi liquidations occur not because collateral prices dropped, but because borrowing rates spiked unexpectedly.
- Borrower’s health factor deteriorates faster than anticipated
- They have no time to add collateral or repay
- Liquidation bots execute before borrowers can react
Why Institutions Need Fixed Rates
Traditional finance operates almost entirely on fixed rates. Here’s why:Financial Planning
Financial Planning
CFOs need to know exact interest expenses for quarterly reports. Variable rates make this impossible.
Regulatory Compliance
Regulatory Compliance
Many jurisdictions require clear disclosure of borrowing costs. Variable rates complicate compliance.
Risk Management
Risk Management
Hedging strategies require predictable cash flows. Variable rates introduce unhedgeable interest rate risk.
Audit Requirements
Audit Requirements
Auditors need to verify expected vs. actual returns. Variable rates create reconciliation nightmares.
User Research: What People Actually Want
We surveyed DeFi users and traditional finance users to understand their preferences:- DeFi Users
- Traditional Users
- 67% prefer fixed rates over variable
- 75% want tradable/tokenized loan positions
- 60% find DeFi terminology confusing
- Top concerns: rate volatility, liquidation risk
The Centuari Solution
Centuari brings fixed-rate lending to DeFi with:Lock Your Rate
Choose your fixed interest rate at the time of lending or borrowing. It never changes.
Fixed Rate Benefits
| Benefit | Variable Rate | Fixed Rate (Centuari) |
|---|---|---|
| Rate predictability | ❌ Changes constantly | ✅ Locked at entry |
| Financial planning | ❌ Impossible | ✅ Exact projections |
| Liquidation risk | ⚠️ Rate spikes cause 80% | ✅ Eliminated |
| Institution-ready | ❌ Compliance issues | ✅ TradFi compatible |
| Sleep at night | ❌ Constant monitoring | ✅ Set and forget |
Ready to experience fixed rates?
Get started with Centuari