Mutuum Finance (MUTM), an Ethereum-based decentralized finance (DeFi) project currently developing a lending and borrowing protocol, has introduced a new feature called Safe-Mode Borrow Presets following the release of its V1 protocol on the Sepolia testnet. The update is designed to simplify borrowing configurations by offering predefined risk settings based on Stability Factor thresholds.
According to information published by the project, Mutuum Finance has raised approximately $20.72 million and reports more than 19,000 participants during its ongoing token sale phases.
Safe-Mode Borrow Presets Introduced on Testnet
Mutuum Finance recently launched its V1 protocol on Ethereum’s Sepolia testnet, where users can test core protocol functionality using testnet assets. Testnet deployments are commonly used in blockchain development to allow users and developers to interact with new systems before they are deployed on a live network.
The current testnet supports several assets, including ETH, USDT, WBTC, and LINK, enabling users to simulate lending and borrowing activities within the protocol environment.
Following the testnet launch, the project introduced Safe-Mode Borrow Presets, which allow users to select borrowing configurations without manually adjusting collateral ratios. The presets automatically determine borrowing parameters based on predefined Stability Factor (SF) thresholds.
The three preset options include:
- Safe: Targets a Stability Factor of ≥ 2.0
- Balanced: Targets a Stability Factor of approximately 1.7
- Aggressive: Targets a Stability Factor of approximately 1.4
The Stability Factor measures the relative safety of a borrowing position by comparing collateral value to the amount borrowed. Higher values typically indicate a greater collateral buffer, while lower values may increase the risk of liquidation during market volatility.
For example, a user depositing $25,000 worth of ETH as collateral could potentially borrow up to $20,000 USDT under an 80% loan-to-value (LTV) configuration. The preset options automatically adjust the borrowing amount relative to this maximum depending on the selected risk profile.
Lending Framework and Protocol Structure
Mutuum Finance is developing a lending protocol that includes two primary models: Peer-to-Contract (P2C) lending pools and Peer-to-Peer (P2P) lending.
In the Peer-to-Contract model, users deposit assets into shared liquidity pools and receive mtTokens at a 1:1 ratio representing their deposit. According to the project documentation, these tokens track a user’s share of the pool and may increase in value over time as interest from borrowers accumulates.
For example, a deposit of 18,000 USDT into a lending pool would generate 18,000 mtUSDT, which represents the depositor’s participation in the pool.
The protocol also includes a Peer-to-Peer lending option, where individual lenders and borrowers can negotiate custom loan terms directly. This model may support less commonly used assets and allow participants to set parameters such as interest rates, loan duration, collateral type, and loan amount.
Borrowing Without Asset Liquidation
DeFi lending protocols are often designed to allow users to access liquidity without selling their crypto assets. In this structure, a borrower can lock digital assets as collateral and borrow another asset against that collateral.
For instance, a user holding ETH valued at $14,000 could deposit it as collateral and borrow a stablecoin such as USDT. The collateral remains locked in the protocol until the loan is repaid, after which it becomes withdrawable again.
This structure is commonly used in DeFi lending systems but also carries risks, including liquidation during periods of high market volatility.
Token Sale and Project Metrics
According to the project team, the MUTM token is currently offered at $0.04 as part of its ongoing token sale phases. The project states that its total token supply is 4 billion tokens, with 1.82 billion allocated for public distribution.
Mutuum Finance reports that approximately 850 million tokens have been acquired by participants and that the project has raised more than $20.72 million to date. The project also reports testnet activity reaching approximately $190 million in simulated total value locked (TVL) during the testing phase.
As with all early-stage blockchain projects, these figures are project-reported and may change as development continues.
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