WHY FIXED-RATE LENDING NEVER TOOK OFF ON-CHAIN

Summary from the TLDR Crypto newsletter

Fixed-rate demand is driven by borrowers (institutions and loopers) who want predictability, not by lenders, and on-chain lenders prize withdrawal-anytime flexibility, so locking capital for term loans forces unsustainably high fixed yields and kills scale. The scalable solution is a rate-exchange layer that leaves Aave/Morpho/Euler liquidity intact while letting traders hedge and synthesize fixed payments (high capital efficiency, margin-backed exposure), enabling borrowers to buy certainty without forcing lenders into term locks. If implemented, rate-exchanges would unlock institutional credit expansion on-chain by matching fixed-rate demand to rate traders rather than fixed-rate depositors.