Introducing Pegasus Finance

A retail-focused interest rate perpetual.

Welcome to Pegasus!

TLDR: We’re introducing a new interest rate perpetual and an exciting bootstrapping experiment you won’t want to miss!

We’re ringing in the new year with some exciting new developments here at Pegasus. Over the past few months, we’ve been closely following DeFi’s second renaissance with new innovations like OHM bonding and clever adaptations of traditional financial products like options and structured vaults. We’re keen on continuing that momentum into 2022 and have been heads down building and iterating on a new type of market.

Today, we’re excited to give you a glimpse at what’s coming. Firstly, we’re introducing a new type of market to Defi, an AMM-style interest rate perpetual. At a high level, this market will allow traders to take long and short positions on borrow/supply APY for on-chain lending platforms like Aave and Compound. Markets will consist of a synthetic token that tracks the actual rates for each lending pool. This will allow retail traders to take leveraged, capital-efficient interest rate positions without needing enormous amounts of notional, as is common in traditional interest rate swaps. We felt this was a necessary next step in the interest rate space because, unlike spot markets, interest rates are traditionally only profitable with large amounts of capital, thus only an instrument for whales and financial institutions. Defi is all about unlocking markets and assets retail traders could never access in the traditional financial world, so, we’re excited to be building this market with a focus on retail traders to continue pushing forward that ethos. Look out for a future post as we move closer towards launch with a deeper dive into the market.

Bootstrapping

In the meantime, to help us gear up towards our new interest rate product, we’re also excited to be launching a bootstrap mechanism focused on effectively rewarding individual contributions and coordinating our community to create shared value for Pegasus. Our motivation for this comes from seeing how vibrant protocol communities can be and at the same time how protocols often struggle with effectively capturing and redistributing that value to their members. So, we’re building a system that combines token-backed upgradeable NFTs, Olympus-style staking, and auctions to create the ultimate bootstrapping mechanism.

Look out for more updates and details in the coming days.

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Pegasus Finance

Pegasus Finance

A retail focused interest rate perpetual on Optimism