Infinity Exchange has announced the launch of its testnet in a bid to attract more institutional funds in the decentralised finance (DeFi) market.

Infinity Exchange, a decentralised finance protocol that provides unprecedented capital efficiency for traders, yield farmers, and real-money investors, has announced the official launch of its testnet.

According to the press release shared with Coinjournal, the Infinity Exchange team said the move is to create the next $1 trillion market in the crypto space. 

The team said the launch of its testnet is an important milestone designed to bring institutional interest rate market mechanics and risk management from TradFi to DeFi markets for the first time.

This will make it possible for institutional DeFi adoption and increase the total value locked (TVL) in the broader industry. 

Infinity Exchange believes that it is revolutionising the DeFi ecosystem by building a protocol that utilises the same mechanics and achieves the same efficiencies associated with TradFi markets, and in particular, the interbank lending market.

Infinity Exchange added that it would also be introducing the first complete yield curve in DeFi with both floating and fixed rates, enabling traders to hedge their basis/rates risk and speculate along the entire length of the maturity curve. 

While commenting on this latest development, Infinity Exchange Founder Kevin Lepsoe said;

“The crypto fixed income markets should be 100-times what they are today and we’re taking the first two steps in that direction,” said “We’re introducing an institutional-quality interest rate protocol that aligns with theoretical finance, all while taking a comprehensive approach to risk management.

In TradFi, institutional investors are more active in the fixed income markets than they are in the equity markets. If we want more institutional adoption in crypto, we need to first nail the fixed income markets, and it starts here, at Infinity.”

Finally, Infinity Exchange said it would enable the managing of a wide range of complex collateral currently with no place to generate yield. The move is expected to provide unique opportunities for traders to arbitrage interest rate differentials between other lending protocols and Infinity, 

The team pointed out that it is preparing for an institutional, crypto-based fixed income market and paving the way for TradFi investors to enter DeFi in large numbers. Thus, creating the next $1 trillion market.