Interest-Bearing Tokens

Overview

Interest-bearing tokens, abbreviated as IBT, can be literally understood as assets that can earn interest. There are not many types of IBTs in all cryptos. The mainstream includes loan vouchers (such as Compound's cToken), Staking derivative vouchers (such as StaFi's rToken), Vault vouchers (such as Yearn's yToken), DEX LP tokens (such as Uniswap LP), etc.

From 2020 to now, two types of assets grew significantly, DeFi assets and Staking assets. DeFi applications are designed to serve the different kinds of demands coming from the growing crypto assets, such as lending, mining, leverage, emerge accordingly. The growth of staking assets is after the launch of ETH2.0, and derivatives of Staked assets start to be more popular. In addition to these two types of assets, there are also some mining vouchers and dividend vouchers, which are all IBTs. Here are the main categories of IBTs and their representatives.

1.Staking Derivatives Voucher

a.rToken

b.crETH

c.stETH

2.Lending Voucher

a.yToken

b.crToken

3.Vault Voucher

a.yToken

b.crToken

c.ibETH

4.Others

1) the dividend voucherfor DeFi governance protocols, such as veCRV, xSushi.

2) DEX LP Token assets, such as Uniswap LP, Sushi SLP.

Potential Use Cases

There are many potential application scenarios for IBTs. The tokens couldbe applied in almost every DeFi protocol. In addition to serving as the most basic trading medium, IBT can also act as collateral to generate StableCoins and synthetic assets. The Interest can bury debts, optimizing capital utilization. IBT can also be used for loans. The advantage of lending IBTs rather than native tokensis that the lender can choose to lend only the token or both the token and interest it bears. IBT can also directly be used in Yield Farming to truly realize dual-mining witha single asset, during the process the IBT holder will still have interest generated.

With the development of DeFi, there will be more interesting applications in the future.