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Mutuum Finance (MUTM) has announced the launch of its V1 protocol on the Sepolia testnet, marking a new stage in the project’s development roadmap. According to the project team, this milestone coincides with the transition into Phase 3 of the roadmap, referred to as “Finalizing Mutuum.”
The team also reports that the project has raised more than $20.7 million during its funding phase, with over 19,000 token holders participating so far. According to the project, the MUTM token is currently priced at approximately $0.04.
V1 Protocol Launch
Mutuum Finance has introduced the first version of its lending and borrowing platform, known as the V1 Protocol, in a test environment on Ethereum’s Sepolia network. The release allows users to interact with core protocol features in a blockchain-based testing environment ahead of any potential mainnet deployment.
The testnet version enables participants to explore several components of the platform while using test assets rather than real funds. According to the team, the V1 protocol currently supports testnet versions of ETH, LINK, USDT, and WBTC.
Features available in the testing environment include:
Decentralized Lending and Borrowing
The protocol is designed to allow users to deposit assets into liquidity pools and borrow assets by providing collateral through smart contracts. Within the testnet environment, these mechanisms can be explored without financial exposure, allowing users to understand how the system functions before any potential production deployment.
mtTokens
When users deposit assets into the protocol’s liquidity pools, they receive mtTokens that represent their deposited balance. For supported assets on the testnet—such as ETH, LINK, USDT, and WBTC—depositors receive mtETH, mtLINK, mtUSDT, and mtWBTC respectively.
According to the project documentation, mtTokens track a user’s supplied assets and may accrue interest over time based on lending activity within the pools.
Debt Tokens
Borrowers receive debt tokens when taking out a loan. These tokens represent the outstanding borrowed amount and are updated as interest accumulates. The tokens function as an on-chain record of borrowing activity within the protocol.
Automated Liquidation Monitoring
The system also includes automated monitoring mechanisms designed to track collateral levels of borrowing positions. According to the team, these tools are intended to support the protocol’s collateral management framework by identifying positions that may fall below required collateral thresholds.
Borrow Presets
Mutuum Finance has also introduced Safe Mode Borrow Presets, a feature intended to simplify the borrowing process by applying predefined collateralization parameters.
These presets correspond to different Health Factor (HF) levels:
Safe: Target HF ≥ 2.0
Balanced: Target HF ≈ 1.7
Aggressive: Target HF ≈ 1.4
According to the project team, these presets are designed to help users choose borrowing parameters without manually calculating collateral ratios. The borrowing capacity associated with each preset may vary depending on market conditions and protocol settings.
Lending and Borrowing Models
Mutuum Finance describes its platform as a non-custodial DeFi lending protocol, meaning users retain control of their assets while interacting with the system through smart contracts.
The protocol includes two lending structures:
Peer-to-Contract (P2C)
In the P2C model, lenders deposit assets into shared liquidity pools that borrowers can access by providing collateral. Interest rates within the pools are determined algorithmically based on supply and demand dynamics.
Peer-to-Peer (P2P)
The platform also supports a Peer-to-Peer model, where lenders and borrowers can create customized loan agreements with specific terms such as collateral type, loan duration, and interest conditions. According to the team, this structure is intended to support assets that may not fit well within pooled lending markets.
Development and Security
According to the project team, Mutuum Finance’s lending and borrowing smart contracts have undergone a security audit by Halborn. The audit reviewed the smart contract code prior to the public testnet release.
The launch of the Sepolia testnet represents an early development milestone as the project continues building its decentralized lending infrastructure on Ethereum. As with many early-stage blockchain projects, the timeline and functionality of future releases remain subject to ongoing development and testing.
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