Mutuum Finance (MUTM), a decentralized lending and borrowing protocol built on Ethereum, has added a new feature to its V1 protocol currently running on the Sepolia testnet. The update introduces Safe-Mode Borrow Presets, designed to simplify borrowing through predefined risk settings tied to specific Stability Factor levels.Disclaimer: This article is sponsored content and is for informational purposes only. The publisher does not independently verify the claims made by the project and assumes no responsibility for their accuracy. Nothing contained in this article constitutes an offer to sell, solicitation of an offer to buy, or recommendation of any securities or financial instruments. Cryptocurrency investments and token sales are highly volatile, speculative, and involve significant regulatory and market risks. Readers should perform their own research and seek independent professional advice before participating in any token sale or investment opportunity.
The protocol is currently operating on the Sepolia testnet and has not yet launched on Ethereum mainnet.
According to project disclosures, Mutuum Finance has raised approximately $20.6 million to date. The MUTM token is currently priced at $0.04, with more than 19,000 holders reported by the project. The team also states that testnet total value locked (TVL) has reportedly surpassed $150 million in simulated liquidity, with over 850 million tokens sold during the ongoing sale phase, according to project disclosures. Simulated liquidity on testnet does not represent real capital deposits.
Safe-Mode Borrow Presets Introduced on Testnet
The new feature allows users to open borrowing positions using a one-click preset system. Instead of manually adjusting collateral ratios, users can select from three predefined options:
Safe: Targets a Health Factor (HF) of ≥ 2.0
Balanced: Targets an HF of approximately 1.7
Aggressive: Targets an HF of approximately 1.4
The Health Factor measures the safety of a borrowing position based on the ratio between collateral and outstanding debt. Higher values reflect stronger collateral buffers, while lower values increase liquidation exposure. The preset system automatically adjusts borrowing capacity according to the selected risk profile.
For example, if the maximum loan-to-value (LTV) ratio is 75% and a user deposits $3,000 worth of ETH as collateral, the theoretical maximum borrowing limit would be $2,250. Under the Safe preset, the system would set borrowing below that maximum to maintain a higher Health Factor, reducing liquidation risk. The Balanced preset would allow borrowing closer to the midpoint of the limit, while the Aggressive preset would position the loan nearer to the $2,250 threshold, increasing capital efficiency but also increasing exposure to price volatility.
The feature is available within the Sepolia testnet environment, where users can mint supported assets such as ETH, USDT, LINK and WBTC before supplying them into liquidity pools or using them as collateral.
Core Features Available in V1 Protocol
In addition to Safe-Mode Borrow Presets, the V1 protocol includes several operational components:
Liquidity Pools: Users deposit assets into shared pools, which provide liquidity for borrowers and generate yield based on utilization.
mtTokens: Depositors receive mtTokens on a 1:1 basis as proof of deposit. These tokens accrue yield over time.
Debt Tokens: Borrowers receive debt tokens that track borrowed principal and accumulated interest.
Stability Factor: A risk metric that reflects the health of a borrowing position relative to required collateral thresholds.
Automated Liquidator Bot: A monitoring mechanism that triggers liquidation if collateral levels fall below protocol requirements.
Staking functionality is also available within the testnet environment, allowing mtToken holders to test how dividends in MUTM tokens are distributed through the protocol’s safety module. According to the project model, dividends are funded through protocol-generated fees. A portion of these fees is allocated to purchasing MUTM tokens from the open market, which are then distributed to eligible stakers.
Before the V1 protocol was launched on Sepolia, the lending and borrowing smart contracts underwent a security audit by Halborn, while the MUTM token contract was reviewed by CertiK. Audit completion does not eliminate all potential risks associated with smart contracts.
According to its published roadmap, development is structured across 4 phases. The protocol is currently in Phase 3, with nearly half of the outlined tasks completed as work progresses toward mainnet deployment.
The platform continues to release feature updates and complete roadmap milestones as it works toward a planned future mainnet launch, subject to development progress and market conditions.
