Minterest’s unique design means long-term yields are optimised thanks to a new, fairer structure
An experienced team of cryptographers and blockchain industry luminaries have unveiled Minterest, a value-capturing lending and borrowing protocol designed to make DeFi fairer for users. The reveal of the new protocol follows a recent private fundraising round that saw the team behind the project raise $6.5 million USD from top-tier investors, including KR1, DFG, CMS, DigiStrats, FOMOcraft, Bitscale Capital, PNYX Ventures, CMT Digital and Faculty Capital.
The Minterest protocol provides users with decentralised token money markets, combined with a uniquely fair incentive structure that will facilitate and promote widespread adoption of DeFi. What sets it apart from DeFi incumbents is that it is engineered from the ground up to capture the value it generates. By utilising its own buy back mechanism, the protocol passes on 100% of revenue generated to its community of active participants. A key component of this architecture is its unique liquidation mechanism which is entirely managed by the protocol rather than being delegated to external parties.
Lending protocols generate significant value, but traditionally such value has not been passed on to users. Existing lending protocols reward users in two key ways. Firstly, through various forms of token issuance via liquidity mining to incentivise use. Secondly, through the liquidation process which is available only to a very small and sophisticated group of users who buy out the positions of under-collateralised borrowers at a market discount.
In an industry first, the Minterest protocol undertakes liquidation processes automatically, without the need for external liquidators, and so captures all fee income, including interest, flash loan and liquidation fee income. On other lending protocols this revenue is usually extracted from the network for the benefit of a privileged few.
Uniquely, Minterest uses its operating surplus to auto-buy the protocol’s native MNT token on-market and then distributes it to its users. This means the protocol users’ earnings are supplemented with a portion of the protocol’s rewards, creating the potential for the highest long-term yields in DeFi.
Josh Rogers, Founder and CEO of Minterest said: “The success of the blockchain industry continues to take everyone by surprise. Increasingly, however, we are seeing players lose sight of the original motivation and what caused such success in decentralised digital economies. The Minterest protocol recaptures crypto’s vision of creating a fairer, more egalitarian financial system with a new DeFi model that generates value for the entire user ecosystem, instead of extracting it only for the few, and in doing so, it intentionally challenges existing sector leaders.
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“DeFi’s current total TVL of nearly 170 billion USD accounts for approximately as little as around 5% of the world’s crypto assets. With significant and sustained crypto growth and the vast majority of crypto value yet to earn returns, DeFi is very much in its infancy and represents a massive opportunity for crypto investors. Today’s DeFi lending and borrowing protocols have inflationary token models, don’t capture or pass on the value the protocol generates, often lack cross-chain capabilities, and offer an overly complex user experience. Minterest changes that. Through their interactions, users create the value on the platform therefore making their participation equitable and rewarding. Without its community, any protocol would be obsolete, and our model places our community at the centre of the value-creation cycle.”
Minterest Protocol’s design operates on the principle of flywheel tokenomics, building a self-reinforcing cycle of value into the platform. The more value created and captured within the protocol, the more value is passed on to users, improving total Annual Percentage Yield (APY). This makes it more attractive to become a liquidity provider to Minterest, thereby attracting new users and over time, exponentially increasing the overall value of the protocol.
The Minterest protocol will be audited by highly regarded auditors in the blockchain space prior to its early access phase, underpinning network security and giving users the confidence required to fully participate.
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James Wo, Founder and CEO of investor DFG (Digital Finance Group) said: “Minterest has engineered a major improvement in the current DeFi ecosystem by solving issues that exist in legacy DeFi protocols. Its unique token buy-back mechanism using the protocol’s own revenue means Minterest passes on protocol rewards to users for their participation in its governance. It’s the first of its kind in DeFi, and a truly sustainable, long-term, model. It’s this kind of innovation that really attracts us as investors.”
Eric Weiss, Partner at Digital Strategies highlighted: “We love that Minterest has taken the original DeFi ecosystem and made it fairer and more inclusive for its users. In doing so, they ensure that the true beneficiaries are the users who share in all revenues generated by the protocol. These unique features make it an appealing platform for everyone in the sector. We are excited to be on the journey with the team and supporting the protocol’s evolution and growth.”
Minterest was founded by Josh Rogers, a serial technology entrepreneur with over 25 years’ experience as a founder or as part of founding start-up teams for projects including COMindico, the world’s first point-to-point IP telco; Oriel Communications, the world’s first micro-billing content engine; Mitchell Morgan, an advisory and fintech conglomerate encompassing a digital agency for online digital platforms; Freelancer, the world’s largest freelancing marketplace; and HeyYou, Australia’s largest hospitality app. The Minterest team looks like the who’s who of industry luminaries, with leadership backgrounds from Cardano, Prysm Group, Chainlink and IBM as well as members with elite academic and technology credentials.
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