When thinking about DeFi, it’s likely that the mind may think about fast-moving, 24-hour markets, or maybe even meme coins. Where the mind probably doesn’t go is “interest rate swaps” a building block to bringing DeFi into mainstream spotlights. And that is exactly what Rho is building.

Rho is built on Arbitrum, and launched in 2022, around the time of the crypto bear market. The purpose of Rho is to reimagine traditional finance’s most essential instruments: fixed-for-floating interest rate swaps, with a DeFi twist. 

Why Do Interest Rate Swaps Matter for DeFi Anyway?

If we look into the world of traditional finance, we’ll realize that interest rate swaps are kind of a huge deal. We’re talking about a $700 trillion market in notional outstanding. These swaps allow institutions to manage the cost of borrowing, hedge exposure to rate changes and take speculative positions on where rates are heading. 

In many ways the crypto space also reflects the world of traditional finance. Rates are everywhere. Borrowing and lending on DeFi platforms require rates, staking yields require rates, and perpetual futures funding also requires rates. These rates are often volatile, sometimes within reason, other times unpredictable. 

Rho’s founder, Alex Ryvkin, noticed this. Ryvkin, formerly a structured products trader, realized that DeFi was missing one of TradFi’s most essential tools: interest rate swaps. With institutional investors entering the space and rate volatility rising, he built Rho to bring appropriate risk management to cryptonative markets. 

Rho’s products allow users to trade interest rate derivatives with cryptonative rates. This includes perp funding or staking APYs for example, and provides users with a new way to lock in returns, hedge volatility and speculate on future rate movements, opening up a new dimension for DeFi strategy.

Building on Arbitrum

Launching on Arbitrum wasn’t just a technical decision according to Ryvkin, it was also a decision that made most strategic sense. With a thriving DeFi ecosystem, strong developer support and low-cost, high throughput infrastructure, Arbitrum offered the most ideal environment for building complex financial instruments such as rate swaps. 

“We looked at DeFi activity across the networks, and Arbitrum was a no-brainer,” Ryvkin said. “It had the most traction in DeFi, the best primitives and is the kind of ecosystem where rate products could actually thrive.”

Since launch, Rho has steadily grown its user base and product offerings. According to the Rho blog, as of March 2025, Rho had a notional trading volume of $10 billion, suggesting that crypto users are very aware of the importance of rate risk. With more institutions and sophisticated traders entering the market, Rho’s tools become an essential part of the landscape.

What’s Next for Rho?

Interest rate swaps may not seem to be the most flashy product in crypto, but they are an essential tool that makes DeFi work better, making Rho a team to keep your eyes on.

Looking forward, Rho is planning to expand its product suite to offer more tooling for traders and hedgers, and deeper integrations across DeFi. There are also plans to support more chains, offer improved analytics, and work with protocols that want to manage exposure natively.