What is Hifi Finance?

Hifi Finance, previously known as Mainframe, is a decentralized finance protocol that strives to facilitate lending and borrowing of cryptocurrencies at a fixed interest rate. The protocol operates on an Automated Market Maker model, where users supply tokens to liquidity pools and an algorithm aims to determine the interest rate based on supply and demand. Hifi Finance also includes a governance system, where HIFI, an ERC-20 token, grants its holders the ability to delegate voting rights. This governance system allows the community to propose, vote on, and implement changes to the Hifi Protocol.

How does Hifi Finance work?

Hifi Finance operates through decentralized interest rate markets that mature on specific dates. Users can supply liquidity, borrow, or lend into any of the active markets. Borrowers pay a fixed interest rate to lenders without needing to negotiate terms like maturity, interest rate, or collateral. By supplying tokens to liquidity pools, users may receive compensation while enabling peer-to-peer lending and borrowing. Hifi Finance also uses a system of smart contracts to allow users to deposit collateral and mint hTokens, a bond-like instrument, representing an on-chain obligation that settles on a specific future date.

What are the potential use cases for Hifi Finance?

Hifi Finance strives to provide a platform for fixed-rate, fixed-term lending in the cryptocurrency space. This allows users to lend and borrow cryptocurrencies with a greater degree of predictability compared to similar protocols with variable interest rates. Borrowers know upfront exactly the amount they will pay to borrow, and lenders know exactly what they will receive before lending any funds. This predictability can make Hifi Finance an attractive option for those looking to participate in decentralized finance without the uncertainty of variable interest rates.

What is the history of Hifi Finance?

Hifi Finance was originally known as Mainframe when it launched in November 2017. It began as a decentralized communications layer for Web3 but pivoted to Decentralized Finance and rebranded to Hifi in early 2020. The founder of Hifi Finance is Mick Hagen, an early adopter of blockchain technology. Hagen stepped down in early 2020 and was replaced by Doug Leonard, who has led the Hifi rebrand and pivot into decentralized finance. The total supply of HIFI is 126.25M, with 80% currently in circulation. The rate of HIFI emission may change over time, as determined by community governance.