TREE Series (Sixty-Two): DOR Standardized DeFi Interest Rates
The standardization of DeFi interest rates has always been a pain point in the industry. This article discusses how DOR addresses this issue through a decentralized mechanism. DOR, short for Decentralized Quoted Interest Rate, is the core primitive of the Treehouse protocol, replacing traditional centralized benchmarks like LIBOR and introducing a consensus-driven forward interest rate curve. Participants include operators, panel members, and delegates who collectively submit market data and forecasts, ensuring interest rates are transparent and resistant to censorship.
Why is standardization needed? On-chain interest rates are often fragmented and heavily influenced by manipulation risks. DOR incentivizes panel members through cryptoeconomic rewards to stake tAssets and submit accurate forecasts, with penalties for incorrect data. This not only enhances reliability but also provides a solid foundation for reference entities to build financial products, such as interest rate swaps or fixed lending. End users benefit the most, enjoying fairer DeFi primitives without worrying about centralized manipulation.
The TREE token plays a crucial role here: query fees must be paid in TREE, and staking TREE allows participation in governance while earning consensus rewards. This creates a self-reinforcing economic system that drives the standardization process of DOR. For example, TESR, as the first DOR, focuses on the risk-free interest rate curve of Ethereum, helping bridge the gap between CeFi and DeFi. In the future, DOR will expand to multiple chains, standardizing interest rates for more assets. In summary, DOR is not just a simple tool but a cornerstone of the DeFi interest rate revolution, making the entire ecosystem more efficient and fairer.
