[Tallinn, Estonia] An experienced team of cryptographers and blockchain industry luminaries has today unveiled Minterest, value-capturing lending and borrowing protocol designed to make DeFi fairer for users. The reveal of the new protocol follows a recent private fundraising round that saw the team behind the project raised $6.5 million USD from top-tier investors, including KR1, DFG, CMS, DigiStrats, FOMOcraft, Bitscale Capital, PNYX Ventures, CMT Digital and Faculty Capital.
The Minterest protocol provides users with decentralized token money markets, combined with a uniquely fair incentive structure that will facilitate and promote widespread adoption of DeFi. What sets it apart from DeFi incumbents is that it is engineered from the ground up to capture the value it generates. By utilizing its own buy-back mechanism, the protocol passes on 100% of revenue generated to its community of active participants. A key component of this architecture is its unique liquidation mechanism, which is entirely managed by the protocol rather than being delegated to external parties.
Lending protocols generate significant value, but traditionally, such value has not been passed on to users. Existing lending protocols reward users in two key ways. Firstly, through various forms of token issuance via liquidity mining to incentivize use. Second, through the liquidation process which is available only to a very small and sophisticated group of users who buy out the positions of under-collateralized borrowers at a market discount.
In an industry first, the Minterest protocol undertakes liquidation processes automatically, without the need for external liquidators, and so captures all fee income, including interest, flash loan and liquidation fee income. On other lending protocols, this revenue is usually extracted from the network for the benefit of a privileged few.
Uniquely, Minterest uses its operating surplus to auto-buy the protocol’s native MNT token on-market and then distributes it to its users. This means the protocol users’ earnings are supplemented with a portion of the protocol’s rewards, creating the potential for the highest long-term yields in DeFi.
Josh Rogers, Founder and CEO of Minterest said: “The success of the blockchain industry continues to take everyone by surprise. Increasingly, however, we are seeing players lose sight of the original motivation and what caused such success in decentralized digital economies. The Minterest protocol recaptures crypto’s vision of creating a fairer, more egalitarian financial system with a new DeFi model that generates value for the entire user ecosystem, instead of extracting it only for the few, and in doing so, it intentionally challenges existing sector leaders.
“DeFi’s current total TVL of nearly 170 billion USD accounts for approximately as little as around 5% of the world’s crypto assets. With significant and sustained crypto growth and the vast majority of crypto value yet to earn returns, DeFi is very much in its infancy and represents a massive opportunity for crypto investors. Today’s DeFi lending and borrowing protocols have inflationary token models, don’t capture or pass on the value the protocol generates, often lack cross-chain capabilities, and offer an overly complex user experience. Minterest changes that. Through their interactions, users create value on the platform, therefore making their participation equitable and rewarding. Without its community, any protocol would be obsolete, and our model places our community at the center of the value-creation cycle.”
Minterest Protocol’s design operates on the principle of flywheel tokenomics, building a self-reinforcing cycle of value into the platform. The more value created and captured within the protocol, the more value is passed on to users, improving the total Annual Percentage Yield (APY). This makes it more attractive to become a liquidity provider to Minterest, thereby attracting new users and over time, exponentially increasing the overall value of the protocol.
The Minterest protocol will be audited by highly regarded auditors in the blockchain space prior to its early access phase, underpinning network security and giving users the confidence required to fully participate.
James Wo, Founder and CEO of investor DFG (Digital Finance Group) said: “Minterest has engineered a major improvement in the current DeFi ecosystem by solving issues that exist in legacy DeFi protocols. Its unique token buy-back mechanism using the protocol’s own revenue means Minterest passes on protocol rewards to users for their participation in its governance. It’s the first of its kind in DeFi, and a truly sustainable, long-term, model.
