# Use cases As a novel new DeFi primitive, there are a lot of powerful use cases of Derivio's interest rate & index derivatives market. We provide several examples for illustration: 1. **Enable leveraged yield farming** It is inherently hard to leverage on market making for traditional order book-based trading given its structure. What would a trader do on Derivio to leverage on market making? Borrow and deploy more capital as a liquidity provider? With rDLP, for the first time a trader has an elegant tool to leverage on market making — just buy/swap more rDLP, stake them, and enjoy the leveraged yield. 2. **Index fixed-rate & variable-rate market** A trader can swap variable-rate yields to fixed-rate yields, gain leveraged exposure to an index’s price or yield, and convert their future yield instantly into a stablecoin to manage their exposure to index volatility. This operates similarly to interest rate markets in TradFi. 3. **Yield farming without delta exposure** It is hard to construct delta-neutral yield farming strategies that are both robust & capital-efficient. Oftentimes it comes with a high cost and over-complex operations. Derivio’s yield-principal separation design offers an easy way of yield farming without delta exposure. A trader could deposit liquidity and get DLP, refract it then sell the principal component. Since rDLP is not exposed to index delta but just the yield, effectively this is a highly capital-efficient way of doing zero-delta yield farming. 4. **High capital efficiency for principal-protected passive investment** As an investor who wants to get exposure to the principal only (i.e. the underlying asset basket), he/she could use 1 DLP to mint 1 r-token and 1 b-token. Notice that the price of 1 r-token + the price of 1 b-token = the price of 1 DLP (otherwise there is an arbitrage opportunity so the market will fix it). He/she could swap r-token for b-token from others, then the investor could hold more than 1 b-token. As the b-token holder stakes the b-token, he/she can expect to gradually receive r-token from the staked r-token pool and convert the p-token back to DLP. Notice that all the use cases above provide leverage without the risk of being liquidated. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://derivio.gitbook.io/v1/providing-liquidity/interest-rates-and-bonds/use-cases.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.