Fixed Yield Layer
XCCY’s bank-style fixed-income product.
It allows users to lock a predefined APR—either by lending or borrowing—for a fixed period of time, while the protocol handles execution, hedging, and capital optimisation under the hood.
From the user’s perspective, Locked Yield feels familiar:
You choose a rate
You choose a term
You know exactly what you’ll earn or pay
Behind the scenes, the system uses a combination of smart matching, interest rate swaps, and conservative yield strategies to deliver that outcome in a capital-efficient and fully on-chain way.
What Problem Locked Yield Solves
Most fixed-rate products in DeFi suffer from the same limitation: capital sits idle.
To guarantee a fixed rate, protocols often lock 100% (or more) of the collateral into isolated positions that do nothing until maturity. That makes fixed rates expensive, limits scale, and wastes balance sheet capacity.
Locked Yield takes a different approach.
Instead of freezing capital, XCCY treats fixed-rate positions like a managed balance sheet, similar to how a bank operates internally—while keeping everything transparent and on-chain.
The result:
Predictable fixed outcomes for users
Higher capital efficiency for the system
Better risk-adjusted returns without added liquidation risk
One Product, Two Execution Paths
When you open a Locked Yield position, XCCY doesn’t force it into a single rigid structure.
Instead, the protocol dynamically selects the best execution strategy at the time of entry to optimize price, efficiency, and risk.
1. Liquidity Matching (Primary Path)
Whenever possible, XCCY directly matches fixed-rate lenders and borrowers inside the protocol.
In this case:
Lenders and borrowers are paired internally
Positions are netted against each other
No external yield source is required
This is the cleanest and most efficient outcome:
Minimal slippage
Lower gas costs
No dependency on external protocols
The protocol captures the internal lend–borrow spread and shares it with users
If one side exits early, the remaining exposure is seamlessly transitioned to the synthetic structure, so the user experience stays uninterrupted.
You don’t notice the switch—the rate stays fixed.
2. Synthetic Fixed Yield (Fallback Path)
When matching liquidity isn’t available, XCCY manufactures a fixed rate using on-chain primitives.
This is where the protocol’s interest rate engine comes into play.
At a high level:
Floating yield is sourced from money markets with best execution optimisation
Interest rate swaps convert floating exposure into fixed
Remaining collateral is deployed conservatively to earn additional yield to the XLP Senior Tranche Vault
All of this happens automatically.
From the user’s point of view, nothing changes:
You still receive a fixed APR
You still have a defined maturity
You still face no variable-rate risk
Why Locked Yield Is Capital-Efficient
Traditional fixed-rate products assume the safest option is to lock everything.
Locked Yield assumes the opposite: idle capital is wasted capital.
XCCY splits collateral into functional layers:
A portion is used to hedge interest rate exposure
A portion supports lending or borrowing activity
The remainder is allocated to the XLP Senior Tranche, earning conservative, non-directional yield
This means:
Fixed-rate guarantees are preserved
Unused collateral continues to work
Risk remains bounded by dynamic health factors and portfolio-level controls
Users earn:
A fixed APR on their Locked Yield position
Plus additional yield generated internally by the system
All without increasing liquidation risk.
A Bank-Style Product, Without a Bank
Locked Yield behaves like a traditional fixed-income product:
Fixed deposits
Fixed-rate loans
Known outcomes
But unlike banks:
There is no opaque balance sheet
No off-chain hedging
No hidden duration or rate risk
Everything—matching, hedging, yield generation, and risk management—happens on-chain, governed by smart contracts and transparent rules.
What This Section Covers
The pages in this group explain Locked Yield in detail:
Lending: how fixed-rate deposits work
Borrowing: how fixed-rate loans are structured
Position Risks: what can go wrong and how risk is controlled
Fee Structure: how costs are applied and why
Each page focuses on user-facing behavior first, and mechanics second.
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