Interest Protocol

Mint one USDi by depositing one USDC, redeem it the same way, and collect interest simply for holding it: that is the bargain Interest Protocol, built by GFX Labs, offered when it launched on Ethereum in 2022. Behind the token sits a fractional-reserve lending market where borrowers post ETH, wBTC or UNI and draw USDi against that collateral, and the interest they pay flows automatically to every holder without any staking step. A variable rate keeps the reserve ratio, USDC held against USDi outstanding, in balance so the system stays solvent. Redemption runs through the smart contracts rather than a company, permissionlessly and without identity checks. It is a small, niche dollar next to the majors, but its design deliberately contrasts itself with the undercollateralized algorithmic coins that failed the same year, leaning on hard USDC backing plus over-collateralized loans.