<p>Fixed-rate lending protocol startup Element Finance has raised $4.4 million in new funding.</p> <p>Andreessen Horowitz and Placeholder led the seed round, accompanied by SV Angel, A.Capital, Scalar Capital and Robot Ventures, according to a funding <a href="https://medium.com/element-finance/element-finance-raises-4-4m-to-bring-liquidity-to-fixed-rate-income-and-interest-markets-fea72f4ef726">announcement</a>.</p> <p>The protocol touts fixed-rate yields for decentralized finance (DeFi) users, a process that enables users to purchase bitcoin, ether and USDC at a discount without locking buyers into a fixed term. This then allows them to swap between assets at any time. </p> <p>Interest rates in most DeFi markets move by demand, meaning a user can borrow an asset at a rate that could radically change over the time they're holding it. Fixed-rate protocols like Element mitigate this by trading underlying assets at a discount until they mature. </p> <p>Yield was the first to do this with fyDai, or fixed yield Dai. Element achieves this in a similar way by splitting the base asset into two tokens: the principal token and the yield token. Users can sell their principal as a fixed-rate income position, allowing them to swap base assets at any time while the yield token matures.</p> <p>Founders of other DeFi venues have already taken notice. Compound founder Robert Leshner, Gauntlet founder Tarun Chitra, Aave founder Stani Kulechov and Ethereum co-founder Joseph Lubin have all backed the protocol, among others. </p> <p>Element's team said the protocol's official release date is "imminent," but did not disclose when exactly the launch will occur.</p>