In the decentralized finance (DeFi) environment characterized by volatility and uncertainty, standardizing fixed income products remains a major challenge. Here, Treehouse emerges as an innovative cooperative network engine, relying on the Decentralized Interest Rate Mechanism (DOR) to make a qualitative leap in determining on-chain interest rates, providing Web3 users and developers with new momentum for achieving more efficient and sustainable returns.
Decentralized Interest Rate Mechanism (DOR)
DOR relies on a consensus mechanism based on transaction data:
Participants provide their expectations for interest rates.
Delegates empower $TREE tokens to support the best-performing participants.
Pre-deposit vaults create yields tied to the level of accuracy, creating a fair and transparent market for interest rates.
tETH: A flagship product within the system
It combines Proof of Stake (PoS) rewards and arbitrage.
The ESR standard is used to support the development of derivatives.
It relies on a PPP mechanism to stabilize tETH prices through an insurance fund, which limits the risks of separation.
The total value locked (TVL) has reached nearly $100 million, a figure that reflects the growing trust in the system.
Existing challenges
Despite the great potential, Treehouse faces some obstacles:
Whitelist restrictions that limit open access.
High reliance on data, which may pose challenges in exceptional market conditions.
Potential future
With the introduction of more improvements, Treehouse is expected to enhance its efficiency and ability to lead the fixed income sector in DeFi. The combination of network collaboration and innovation in interest mechanisms gives it a unique position in shaping the next generation of decentralized finance products.
