Mutuum Finance (MUTM), a decentralized finance protocol built on Ethereum, has launched the V1 version of its platform on the Sepolia testnet. The release allows users to interact with the protocol’s core features in a testing environment.
According to project disclosures, Mutuum Finance has reported raising more than $20.78 million in funding. The project also states that the number of MUTM token holders has surpassed 19,000, with the token priced at approximately $0.04 at the time of writing.
Lending and Borrowing Models
Mutuum Finance is designed to support lending and borrowing of digital assets through two different models.
The first is Peer-to-Contract (P2C) lending, where users deposit assets into shared liquidity pools. Borrowers can access liquidity from these pools, while interest paid on loans is distributed to the lenders who provided the funds.
The second model is Peer-to-Peer (P2P) lending, where lenders and borrowers establish loan agreements directly with each other. In this model, participants determine loan terms such as interest rates and repayment periods without relying on pooled liquidity.
According to the project’s documentation, P2C lending is typically used for more widely traded assets such as ETH, while the P2P model may allow lending arrangements involving other types of tokens.
Borrowers within the protocol can access liquidity by depositing supported assets as collateral. Instead of selling their holdings, users can borrow against them while maintaining exposure to the underlying assets.
Stablecoin Design
Mutuum Finance is also developing an overcollateralized stablecoin that is intended to maintain a value close to $1 through collateral-backed issuance and supply adjustments.
Under this model, users can mint the stablecoin by depositing collateral above a required threshold. When the stablecoin trades above its target value, additional minting activity may increase supply. Conversely, when the market price falls below the target level, users may purchase the stablecoin and use it to repay existing debt positions, which reduces circulating supply.
These mechanisms are designed to help maintain the stablecoin’s value through market-driven adjustments.
V1 Protocol Testnet
The V1 protocol represents the first working version of Mutuum Finance’s lending and borrowing infrastructure. The system currently operates on the Ethereum Sepolia testnet, allowing users to explore its functionality without using real assets.
The testnet supports several assets, including ETH, USDT, WBTC, and LINK, which are used only for testing purposes.
Users who deposit assets into liquidity pools receive mtTokens, which represent their deposited assets and track the value of the position as interest accrues through borrowing activity.
Borrowers receive debt tokens, which record the amount borrowed and update as interest accumulates. To help maintain collateral requirements, the protocol includes an automated liquidation bot that monitors borrowing positions.
The V1 release also includes Safe-Mode Borrow Presets, which provide predefined borrowing configurations based on targeted collateral ratios. The available presets include Safe, Balanced, and Aggressive, allowing users to select borrowing parameters that correspond to different collateral buffers.
According to the project team, a demonstration video explaining the Safe-Mode Borrow Presets has been shared through the project’s official X account.
Development Status
The launch of the V1 protocol testnet allows users to interact with Mutuum Finance’s lending and borrowing mechanisms in a live testing environment. The project reports ongoing growth in funding and token holders as development continues.
Mutuum Finance’s roadmap includes additional testing and feature development as the team continues preparing the protocol for a potential mainnet release.
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