Treehouse CEO: Fixed Income as the Key to Widespread DeFi Adoption

In the rapidly evolving world of decentralized finance (DeFi), one crucial component has remained largely untapped: fixed income. While DeFi has made significant strides in developing derivatives, lending platforms, and decentralized exchanges, the absence of fixed income products has hindered its growth and adoption, particularly among institutional investors. In a recent interview, Brandon Goh, co-founder and CEO of Treehouse, shared insights into the potential of fixed income in driving widespread DeFi adoption.



Fixed income, which includes assets like bonds and savings accounts, forms the backbone of traditional finance. However, this asset class has struggled to gain traction in the crypto world. Goh attributes this to the lack of necessary infrastructure, particularly benchmark rates. He explains, "So in our view, why that is the case is because there's missing infrastructure. There's particularly missing benchmark rates. And if you don't have this foundational layer, it's very hard to have a solid fixed income asset class."

Without standardized rates, scaling fixed-income products in a decentralized environment becomes challenging. Goh suggests that the industry skipped an entire asset class, making it almost non-existent in the way DeFi currently operates. To address this issue, Treehouse is developing a decentralized offered rate (DOR), an on-chain benchmark designed to improve market efficiency and transparency.



A decentralized benchmark rate is critical for a thriving fixed income market in crypto. Without it, building structured products like futures, swaps, or bonds is extremely difficult. Goh highlights how Treehouse's model allows users to earn predictable returns while mitigating risks associated with yield-generating products. He believes that a reliable fixed-income market could serve as an entry point for traditional financial institutions to explore DeFi, helping to bridge the gap between traditional finance and crypto.

As regulatory clarity increases and infrastructure improves, fixed income may become a key pillar of the next phase of DeFi's evolution. Goh predicts that DeFi will move toward sustainable growth rather than relying on unsustainable high-yield incentives. This episode of Hashing It Out provides valuable insights into a crucial but underdeveloped area of DeFi that could shape the industry's future as it seeks mainstream adoption.

In conclusion, fixed income products hold immense potential for driving widespread DeFi adoption, particularly among institutional investors. As Treehouse and other innovators continue to develop the necessary infrastructure, such as decentralized benchmark rates, the DeFi ecosystem will become more robust and attractive to a broader range of investors. By embracing fixed income, DeFi can unlock new opportunities and pave the way for greater integration with traditional finance.