Mutuum Finance (MUTM) Raises $20.8M as it Brings Dual Lending Infrastructure to Ethereum

Mutuum Finance (MUTM), a new decentralized finance crypto project, has raised $20.8 million as it continues developing its lending ecosystem on Ethereum. The project features a dual lending infrastructure that combines Peer-to-Contract (P2C) liquidity pools with Peer-to-Peer (P2P) lending.

How Mutuum Finance Works
P2C and P2C Lending

Liquidity in Mutuum Finance's P2C lending model is aggregated from multiple lenders into pools for borrowers to draw from. This model is ideal for stable or blue-chip assets like ETH or USDT. Interest rates adjust based on pool utilization. Lenders deposit assets and receive mtTokens, which represent their share of the pool and automatically accrue interest over time.

These mtTokens can also be staked for MUTM dividends or be used as collateral for borrowing elsewhere on the platform. Borrowers benefit from options like variable rates, which fluctuate with market conditions, or stable rates for predictable repayments.

For example, suppose you're a investor holding $15,000 in USDT. Instead of letting it sit idle in a wallet, you deposit it into Mutuum Finance's lending pools, receiving equivalent $15,000 mtUSDT tokens. If the pool's utilization is at 60%, you might earn a variable supply APY of 6%.

Over six months, this could accrue about $450 in interest. If utilization spikes to 80% due to increased borrowing demand (e.g., from a DeFi bull run), rates could rise to 10% APY, boosting earnings to $750 over the same six-month period.

To handle less liquid assets, such as meme coins like PEPE, Mutuum Finance offers P2P lending, protecting P2C pools from extreme volatility. Here, there's no centralized liquidity pool. Instead, borrowers and lenders connect directly to negotiate loan terms, including interest rates, loan durations, or even collateral requirements.

This direct matching allows for potentially higher returns for lenders, while giving borrowers access to funding for niche assets that might not qualify for P2C.

Tokens

Mutuum Finance operates with two tokens that serve different roles within its ecosystem. The first one is MUTM, which functions as the core utility and incentive asset of the platform.

A portion of the revenue produced within the ecosystem is used to buy back MUTM tokens from the market. These repurchased tokens are then redistributed to users who stake their mtTokens within the protocol's safety module. MUTM is priced at $0.04 with more than 19,090 token holders.

Alongside MUTM, the protocol plans to launch a native USD-pegged stablecoin that users can mint by depositing over-collateralized assets into the system. The assets used as collateral also earn yield, allowing users to access liquidity while their holdings continue generating returns within the protocol.

Protocol Updates

Project disclosures indicate that Mutuum Finance is nearing $21 million raised in funding as development of its DeFi ecosystem continues. Earlier this year, the project announced V1 Protocol (https://x.com/MutuumFinance/status/2016149102145216967) , a demo version of its lending and borrowing ecosystem deployed on the Sepolia Testnet.

The V1 protocol includes several key features such as pooled lending and mtTokens, borrowing and debt tokens, as well as an automated liquidator bot to maintain protocol stability. Users can interact with the system using test assets including ETH, LINK, USDT, and WBTC.

In a recent update to the V1 protocol, Mutuum Finance has also introduced Safe-Mode Borrow Presets, to simplify borrowing by allowing users to select predefined risk profiles when opening loan positions. Instead of manually calculating collateral ratios, borrowers can choose between three preset options that automatically adjust borrowing limits according to a target Stability Factor (SF).

The Safe preset targets a Stability Factor of 2.0 or higher, creating a large collateral buffer and reducing liquidation risk. The Balanced option aims for an SF of around 1.7, offering a moderate borrowing level with a mix of safety and capital efficiency. Meanwhile, the Aggressive preset targets an SF of around 1.4, allowing users to borrow closer to the protocol's maximum Loan-to-Value (LTV) limit.

For example, if a user deposits $10,000 worth of ETH as collateral with a maximum LTV of 75%, the borrowing limit would be $7,500. With the presets applied, the Safe mode may limit borrowing to around $4,500-$5,000, Balanced mode could allow roughly $5,500-$6,000, while the Aggressive option may approach $7,000-$7,500.

Mutuum Finance aims to improve capital efficiency within the decentralized lending market. Its dual lending infrastructure enables users to earn yield on idle assets while allowing borrowers to access liquidity without needing to sell their holdings.

Through this model, lenders generate passive returns while borrowers retain exposure to the potential upside of their crypto assets.

About Mutuum Finance

Mutuum Finance (MUTM) is an Ethereum-based, non-custodial decentralized finance (DeFi) protocol designed for lending and borrowing digital assets without intermediaries.

J. Weir
Contact@mutuum.com

This release was published on openPR.