💸 Income generation through enhanced yield strategies

Scenario: Augmenting returns on investments

Interest Rate Derivatives (IRDs) can assist investors in maximizing returns from yield-bearing crypto assets by converting floating yields into fixed ones. This guarantees income certainty and can offer higher returns under specific market conditions.

Example:

An investment fund holds a significant amount of cryptocurrency that generates variable staking rewards. To stabilize returns and enhance yield, it enters into an interest rate swap where it pays a floating rate based on the staking rewards and receives a fixed rate that's above the average current floating rate. This swap reduces income fluctuations and secures higher yields, offering the fund predictable and potentially increased returns.