Expansion of Fixed-Rate DeFi Loans: Competition Among Morpho, Jupiter, and Kamino

The DeFi lending market is expanding with fixed-rate and fixed-term products. Morpho, Jupiter, and Kamino have introduced structures that allow borrowers to pre-determine borrowing costs and maturities, addressing liquidity shortages and maturity management issues. The active loan volume is approximately $28.5 billion, with most being variable-rate products. While variable-rate loans allow for immediate borrowing, it is difficult to know the actual interest in advance. Fixed-rate products provide predictability by locking in the interest rate for the duration of the loan. Morpho is set to launch its fixed-rate lending protocol, Midnight, in July 2026, adopting a structure where borrowers and lenders present their intentions for specific conditions as orders, and funds move when a transaction is executed. Jupiter allows users to set loan durations from 1 to 30 days through an offer book, and if not repaid by maturity, the collateral is seized. Kamino has added fixed-rate reserves to its existing Kamino Lend, creating reserves based on combinations of assets, durations, and interest rates, allowing borrowers and lenders to select their desired conditions. All three protocols are designed to ensure that funds do not remain idle until fixed-rate transactions are completed. Although fixed-rate products have not yet replaced variable-rate loans, competition in DeFi lending is expanding through maturities, collateral evaluations, and more.

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