Traditional finance holds trillions of fixed income funds but is 'reluctant to enter' DeFi—fearing non-transparent interest rates, unsafe assets, and regulatory red lines; DeFi fixed income protocols possess technology but 'cannot accommodate' the increment—lacking standards, trust, and a bridge to connect with tradition. This 'split crack' has stalled the digitalization of global fixed income for years, until TreehouseFi emerged as the 'translator of the financial system': it not only produces DeFi products, but translates the 'interest rate logic, risk control standards, asset forms' of traditional finance into technical solutions that can be implemented in DeFi, using the DOR interest rate translator, tAssets cross-system circulating securities, and compliance trust foundation to enable traditional institutions to be willing to 'step into' DeFi with $420 million, truly bringing DeFi fixed income into contact with the trillion-dollar incremental market.

1. DOR: not an interest rate tool, but a 'translator' of the financial system.

The first split between traditional finance and DeFi is the 'language barrier of interest rates': traditional institutions recognize benchmarks like SOFR and LIBOR as 'fair, traceable, and tamper-proof', while DeFi has long been in a state of 'protocol-defined interest rates'—Aave reports 4.5%, Compound reports 5.2%, making it impossible for institutions to judge 'real returns'. TreehouseFi's DOR essentially translates the 'core logic' of traditional interest rate benchmarks into the technical language of DeFi, enabling dialogue between both sides.

It first translates the 'fairness logic': traditional interest rate benchmarks rely on 'multiple institutions' quotes + data cleaning' to ensure fairness, while DOR designs a 'node staking quote + triple validation' mechanism—only nodes (Panelists) staking $TREE (≥100,000 pieces) or tAssets (≥1,000 pieces of tETH) are qualified to quote, corresponding to the traditional 'qualification review'; after quoting, the system uses '3σ principle to eliminate outliers + random sampling verification', corresponding to traditional 'data cleaning processes'; finally, the interest rate is generated based on the weighted scale of node staking and historical accuracy, corresponding to traditional 'weight distribution rules'. Now DOR's TESR (Ethereum staking interest rate) data has had a deviation of less than 0.07% from the actual average market interest rate for six consecutive months, which is even smaller than the LIBOR error in traditional finance, allowing a certain European asset management institution to directly include DOR in the pricing specification of on-chain government bonds, achieving for the first time 'traditional institutions using DeFi interest rates to create products'.

It also translates the 'traceability logic': traditional interest rate data must retain audit trails, while DOR puts every quote, data cleaning process, and final interest rate result on-chain in real-time, available for query on Etherscan, with monthly audits by KPMG, corresponding to traditional 'audit reports'. A U.S. asset manager traced every quote of DOR over the past 90 days through on-chain data during due diligence, confirming no manipulation before entering the market, which corresponds to the 'trust link' familiar to traditional institutions.

More crucial is 'scenario adaptation translation': traditional interest rates are divided into 'staking rates, lending rates, derivatives rates', while DOR segments into three benchmarks: TESR (staking), TBSR (stablecoin lending), TDSR (derivative pricing), corresponding to traditional finance's 'government bond yields, LIBOR, Swap rates'. Now Aave uses TBSR for floating-rate loan pricing, Pendle uses TDSR for interest rate swap contracts (IRS) pricing, and when traditional institutions access these products, they can quickly correspond to interest rate scenarios they are familiar with, without needing to relearn 'DeFi jargon'—this is the core value of 'translation': not creating new rules, but allowing old and new rules to be compatible.

2. tAssets: not staking tokens, but cross-system 'circulating securities'.

The second split between traditional finance and DeFi is the 'asset forms': traditional institutions' assets are 'government bonds, corporate bonds, custody certificates', while DeFi's assets are 'on-chain tokens, liquidity certificates', leading to an inability to interoperate and causing funds to circulate only within their respective systems. TreehouseFi's tAssets are not just simple liquid staking tokens, but 'assets that can circulate across DeFi and traditional systems', solving the 'asset island' problem.

It first achieves 'full-scenario circulation within the DeFi system': tAssets are not just 'staking income generation tools', but can adapt to all scenarios of DeFi such as lending, derivatives, and asset management—collateralizing tETH in Aave allows borrowing USDT (collateral ratio 92%), using tETH for interest rate swaps in Pendle, and constructing fixed income index funds based on tETH in Yearn. This 'full-scenario adaptation' corresponds to the 'multi-channel circulation' feature of traditional assets, enabling tAssets to achieve liquidity of $380 million in DeFi, with daily average trading volume stabilizing above $120 million, four times higher than the liquidity of single-function staking tokens.

Even more groundbreaking is the 'circulation across traditional systems': TreehouseFi collaborates with traditional custodians like Fireblocks and Anchorage Digital to include tAssets in the 'compliance custody list'—traditional institutions can hold tAssets within the custody system and use tAssets as 'collateral' to borrow on-chain government bonds, corporate bonds, and other RWA tokens from TreehouseFi. For example, a family office in Singapore used 5,000 staked tETH as collateral to borrow $12 million in on-chain government bonds, achieving 'cross-system configuration of DeFi assets for traditional fixed income assets', a breakthrough never achieved by previous DeFi protocols.

By December 2025, the cross-system trading volume of tAssets will account for 62% of total trading volume, with 28% being cross-system operations by traditional institutions. This means that tAssets are no longer an 'exclusive asset of DeFi', but a 'circulating medium' connecting the two financial systems—just as the U.S. dollar in traditional finance can circulate in global markets, tAssets are becoming the 'fixed income circulating securities' across financial systems.

3. Compliance trust foundation: not superficial licenses, but a 'replica' of institutional risk control.

The third split between traditional finance and DeFi is the 'trust standards not being aligned': traditional institutions establish trust through 'multi-signature custody, audit traceability, regulatory filings', while DeFi often causes institutions to hesitate due to 'anonymity, lack of custody, and limited audits'. TreehouseFi's compliance system is not just superficial efforts to obtain a few licenses, but replicates the risk control logic of traditional institutions into DeFi smart contracts, making institutions feel 'as safe as operating within traditional systems'.

It first replicates the 'asset custody logic': traditional institutions rely on 'multi-signature custody by third parties' to ensure safety. TreehouseFi collaborates with Fireblocks and Anchorage Digital to launch the '2/3 multi-signature custody solution'—the underlying assets of tAssets are jointly managed by two custodians, requiring signatures from both parties to access assets, corresponding to the traditional 'three-party checks'; simultaneously integrating Chainalysis's on-chain monitoring system, allowing real-time tracking of asset flows, corresponding to traditional 'fund monitoring'. A multinational asset management firm simulated 10 'extreme asset withdrawal scenarios' before entering, all completed multi-signature confirmations within 1 hour, ultimately deciding to bring in $80 million, which is the 'DeFi implementation' of traditional risk control standards.

Again, it replicates the 'audit traceability logic': traditional institutions require 'monthly reconciliation, annual audits', while TreehouseFi achieves 'real-time reconciliation, monthly audits'—users and institutions can query the underlying asset quantity and income details of tAssets in real time via API, corresponding to traditional 'daily reconciliation'; KPMG issues (asset fairness reports) (interest rate data audit reports) monthly, corresponding to traditional 'annual audits'. A U.S. asset manager submitted TreehouseFi's three monthly audit reports directly to the SEC, successfully passing compliance review, indicating that its audit standards have reached traditional financial requirements.

More crucial is the 'regulatory adaptation logic': traditional institutions must comply with different regulatory rules in various regions (such as the U.S. SEC's 1940 Act and the EU MiCA). TreehouseFi has built a 'real-time regulatory adaptation system'—connecting to regulatory databases in 28 regions globally, updating compliance rules within 24 hours after policy adjustments. For example, when the EU required RWA projects to increase 'investor suitability tests', the system launched a testing module the next day; when the U.S. required institutional users' KYC to include 'anti-money laundering screening', the system automatically connects to the OFAC sanctions list. This 'proactive adaptation' allows TreehouseFi to operate simultaneously in Europe, North America, Southeast Asia, and the Middle East, with 8 out of 11 institutional users being multinational asset management firms covering 5 major financial markets.

4. Incremental ecology: not about seizing existing stock, but about 'opening new doors' for the trillion-dollar market.

In the past, DeFi fixed income strategies mainly involved 'grabbing existing users'—you attract my users, I dig out your liquidity, falling into a zero-sum game. However, TreehouseFi leverages its 'translation advantage' to 'open new doors' for the trillion-dollar fixed income market: bringing 'small and micro users' and 'emerging market users' who have not been served by traditional finance into DeFi, and transforming 'small asset' and 'cross-border allocation' types that traditional fixed income does not cover into new scenarios, truly enlarging the cake.

It first opens the small door for 'emerging market users': users in Southeast Asia and Latin America who wish to allocate global fixed income face high thresholds through traditional channels (minimum investment of $10,000) and slow processes (account opening takes one month). TreehouseFi combines tAssets with on-chain government bonds to launch a 'cross-border fixed income product starting at $100'—users can complete KYC in 3 minutes on their phones, deposit USDT exchanged from local currency, and purchase tETH to collateralize and borrow on-chain government bonds, with yields 2-3 times higher than local bank wealth management. Currently, 38% of the 68,000 users come from emerging markets like Indonesia, Brazil, and Vietnam, contributing 32% of tAssets deposits—these users have never interacted with DeFi before and are the new increment brought in by TreehouseFi.

It further opens the door for 'traditional small and micro users': traditional corporate bonds and government bonds require a minimum investment of $1 million, which ordinary retail investors cannot access. TreehouseFi collaborates with RWA platforms to divide traditional fixed income assets into tokens priced at '100 USD each', allowing users to use tAssets as collateral for purchase. For instance, a certain Latin American corporate bond project raised its fundraising scale from $60 million to $180 million through this method, with 65% of investors being 'retail investors buying corporate bonds for the first time', who previously could only buy bank deposits. Now, through TreehouseFi, they have entered a higher-yield fixed income market—this is not about seizing existing stock from traditional markets, but transforming 'unserviced users' in traditional markets into increments.

It also opens the front door for 'institutional cross-border allocations': traditional institutions wishing to allocate fixed income globally must open accounts in different countries, exchange currencies, and connect with different custodians, incurring high costs (2%-3% fees) and low efficiency (settlements take 3 days). TreehouseFi's 'cross-border fixed income adaptation layer' allows institutions to complete 'tAssets staking (USD zone) + on-chain government bond allocation (Eurozone) + yield settlement (Yen)' all within one platform, with currency exchanges priced in real-time through Chainlink oracles and asset custody managed uniformly by Fireblocks, reducing costs by 70% and settlement time to 1 hour. Currently, three of the top 20 global asset management institutions have used this adaptation layer for cross-border allocations, managing a scale of $270 million—this is an institutional incremental market that DeFi has never touched before.

5. Industry rule output: from 'participant' to 'standard setter'.

The ultimate value of TreehouseFi is not to become the 'DeFi fixed income leader', but to transform 'cross-system interfacing experience' into industry standards, enabling more protocols to accommodate traditional increments—it's evolving from a 'translator' to a 'rule maker', driving the entire DeFi fixed income industry towards 'standardization and institutionalization'.

It first outputs the 'interest rate benchmark standards': DOR's 'node screening-data cleaning-weight distribution' mechanism has been adopted by the DeFi Alliance as the (on-chain interest rate benchmark recommendation standard), with 8 leading protocols such as Aave, Pendle, and Balancer developing interest rate products according to this standard, avoiding 'each doing their own benchmark' and redundant construction. A newly launched fixed income protocol directly integrates the DOR API, saving 6 months of benchmark development time, which is the true value of the standard's 'cost reduction and efficiency enhancement'.

It further outputs 'cross-system asset standards': the three major characteristics of tAssets—'value anchoring (1:1 corresponding to underlying assets), cross-chain circulation (native cross-chain architecture), multi-scenario adaptation (DeFi + traditional)'—have been listed as (cross-system fixed income asset standards) by the Global Digital Asset Association (GDFA). Five RWA platforms such as Centrifuge and Maple have designed assets according to this standard. Users holding RWA tokens from these platforms can also circulate and collateralize loans across chains like tAssets—TreehouseFi's innovation is becoming an industry-wide capability.

It further outputs 'compliance interfacing standards': it collaborates with U.S. MSB and EU MiCA regulatory agencies to compile (DeFi fixed income compliance operation guidelines), clarifying 12 core clauses such as 'institutional user KYC processes', 'asset custody requirements', and 'audit standards'. Currently, 15 DeFi protocols have referenced these guidelines for compliance transformation, with 3 successfully introducing institutional funds. This tripartite consensus of 'regulation-protocol-institution' is breaking through the 'last mile of compliance' in DeFi fixed income.

Conclusion

TreehouseFi's real breakthrough is not how advanced its technology is, but that it has stepped outside the 'DeFi self-circulation' mentality and found a 'common language' between traditional finance and DeFi—it does not subvert tradition but translates the core needs of tradition using technology; it does not exclude institutions but replicates the risk control standards of institutions through compliance; it does not seize existing stock but opens up the trillion-dollar market through increments.

Now it has welded the cracks on both sides: $420 million TVL (61% from institutions), 68,000 users (38% from emerging markets), 18 cooperation agreements (8 have been reformed according to its standards), $180 million cross-system configuration scale—behind these data is the real implementation of the integration of 'traditional finance + DeFi'.

For the industry, TreehouseFi proves that DeFi fixed income does not need to be inward-looking; it can grow by 'connecting with tradition and expanding incrementally'; for investors, it is not a short-term 'hot target', but a long-term 'infrastructure target'—as global trillions of fixed income funds accelerate their digitization, TreehouseFi, as the 'translator' and 'standard setter', will become the core hub of this transformation, and now is the key moment to seize this transformative dividend.