New York, NY, USA, March 25th, 2026, Chainwire
Kairos Labs, Inc., today published its technical whitepaper detailing the design of a permissionless, non-custodial interest rate swap protocol built for the Ethereum Virtual Machine. The company also announced a $2.4 million seed round led by 6th Man Ventures, with participation from Lattice, Advancit Capital, and Compa Capital. The round follows a successful beta that generated over $300M in notional swap volume and the team’s graduation from the Alliance Accelerator. The full protocol is expected to launch on the Ethereum mainnet and Base in the coming weeks.
Interest rate swaps are the most widely traded derivatives in traditional finance, with a notional market exceeding $500 trillion. They serve a foundational function: enabling lenders to offer fixed rates by hedging their floating-rate exposure. Without this hedging layer, long-duration fixed-rate lending and fixed-income is near impossible due to interest rate risk. DeFi, despite surpassing $40 billion in outstanding loan balances, has no equivalent infrastructure today.
“Nearly all DeFi lending still runs on variable rates,” said Thomas Harrison, Co-Founder and CEO of Kairos Labs. “That works for short-term leverage, but it breaks down for real estate, business financing, or structured credit. Kairos is the hedging layer that makes fixed rates possible onchain.”
The Problem
DeFi lending has matured significantly. Protocols like Aave and Morpho collectively secure tens of billions in deposits, and institutional adoption continues to accelerate. But the credit infrastructure remains incomplete: virtually all DeFi loans carry variable rates that can swing dramatically based on utilization and market conditions. Borrowers cannot plan around unpredictable interest expense, and lenders cannot commit capital at duration without tools to manage rate risk.
“DeFi has been stuck in a chicken-and-egg dynamic for years that has restricted real use cases of lending to businesses — lenders won’t offer fixed rates without a way to hedge, and swap markets won’t develop without lending demand. We were looking for solutions that would allow this demand to exist and enable real businesses to borrow using DeFi products” said Serge Kassardjian, Managing Partner at 6th Man Ventures. That is finally changing. Morpho and others are moving to support fixed-rate lending at scale, and Kairos is the hedging infrastructure that makes it work. We’ve been waiting for this moment.
Kairos Mechanism Overview
Kairos enables anyone to create an interest rate swap market by specifying a set of immutable parameters: the underlying rate, swap tenor, collateral token, risk controls, and pricing oracles. In each market, buyers lock in a fixed or floating rate, depending on the market, for a fixed term, and a liquidity pool takes the opposing side. At expiry, the difference between the buyer’s rate and the pool’s rate is settled from the counter party’s collateral.
Markets are created in pairs: one sells fixed-rate swaps, the other sells floating-rate swaps. This separation allows liquidity providers to allocate based on their directional view and risk tolerance. Because market creation is permissionless, LPs and curators can compete on pricing accuracy. Markets with better-calibrated models will attract more volume and generate more fees, creating a natural selection dynamic that improves pricing over time.
Liquidity can be supplied directly or through vaults managed by curators, who select markets and set risk parameters on behalf of depositors. At launch, vault adapters integrate with Morpho Vault V2 and the ERC-4626 standard, with a modular adapter layer designed to support additional vault architectures. Markets can be constructed around any yield or interest rate, on or off chain, enabling swaps that precisely match the duration and notional size of an underlying position.
Implications for DeFi Fixed Income
Beyond hedging, onchain interest rate swaps unlock a broader opportunity: the development of fixed-income products in DeFi. Instruments like bonds, structured credit, and yield-bearing products with predictable cash flows represent the largest asset class in traditional finance, yet they are largely absent from DeFi.
“Kairos is solving one of the most important unsolved problems in DeFi, without interest rate swaps, there is no real credit market. This is the layer that unlocks everything else” said Imran Kahn, Co-Founder of Alliance. Predictable yield depends on predictable interest rates, which in turn depend on the ability to swap between fixed and floating exposures.
“ETH staking alone generates billions of dollars in annual yield, staking rates that are almost exclusively variable,” said Vince DePalma, Co-Founder and CTO of Kairos Labs. “Large DAOs and institutional stakers managing eight and nine-figure treasuries demand rate certainty. Kairos gives them the ability to lock in a fixed staking yield for a defined period, which is par for the course in traditional fixed income, but has never been possible onchain. The protocol supports any rate, for lenders or borrowers, so fixed-rate lending on Morpho, structured yield products, and entirely new fixed-income instruments are all made possible.”
The full Kairos whitepaper is available now.
About Kairos Labs
Kairos Labs Inc., is an Alliance-backed company (ALL15) building permissionless interest rate swap infrastructure for DeFi. The founding team brings direct experience building and scaling crypto financial products at the highest levels of the industry.
Thomas Harrison (CEO) is a repeat founder whose previous company was acquired by Gemini, the Winklevoss-founded cryptocurrency exchange. At Gemini, Harrison led the development and launch of the Gemini Credit Card, scaling the program from zero to hundreds of millions of dollars in loan volume. Vince DePalma (CTO) has led engineering teams at Goldman Sachs and Gemini.
“We have spent years building lending products in crypto, and the same constraint kept showing up,” said Harrison. “Without interest rate swaps, you cannot offer fixed rates at duration, and without fixed rates, you cannot serve the borrowers and institutions that drive the majority of credit demand in traditional markets. That is the gap we are closing.”
The protocol is expected to launch on Ethereum mainnet and Base in the coming weeks, with additional chain deployments to follow.
Website: kairosswap.com
X: @kairosswap
Contact
CTOVince DePalmaKairos Labs, Inc.vince@kairosswap.com
This article is not intended as financial advice. Educational purposes only.
