1. What is voltz.xyz ?

The team behind voltz define it as

<aside> 💡 A noncustodial automated market maker for Interest Rate Swaps (IRS).

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Now let’s break that down

• Non-custodial means the private keys of the wallet are in the control of the user and not the project which utilizes the wallet
• Automated market maker can be thought of as a computer program that automates the process of providing liquidity.
• Interest rate swaps is a financial instrument through which two parties agree to exchange one stream of interest payments for another, over a set period of time.

<aside> 💡 Simply put, voltz is a de-fi protocol that allows you to trade a financial instrument called interest rate swaps.

</aside>

What interest rate swaps allow you to do is basically swap a [floating interest rate](https://www.investopedia.com/terms/f/floatinginterestrate.asp#:~:text=freelancers%2C and individuals.-,What Is a Floating Interest Rate%3F,or with general market conditions.) for a fixed interest rate and vice versa. The person with the floating interest rate doesn’t want the volatility associated with the variable interest rate. The person who’s getting the floating interest rate payment looks to make a profit when the floating interest rate decreases.

2. How does voltz work?

Fixed Takers

One side is called as Fixed Takers (FTs), where you swap a variable rate and end up with a fixed rate of return. This provides traders with the ability to de-risk their portfolio by ‘locking in’ a fixed interest rate.

For example, you may own an asset that has a variable rate of return, such as cDAI. If you don’t want the uncertainty of a variable interest rate on your DAI, but instead would like a fixed rate of return, you can initiate a swap on Voltz.

Let’s illustrate this with an example:

1. Alice owns $10,000 worth of cDAI, which currently has a variable rate of return of 10% APY
2. Alice doesn’t want to risk seeing that rate drop, so would rather fix the rate for 90 days