Minterest

Minterest is a unique borrowing/lending protocol built by industry leaders to service the billions in Total Value Locked (TVL), in DeFi lending projects, with the specific aim of putting user benefits at its core. It provides users with a decentralised financial platform that is fair and inclusive.

The Minterest protocol has the world’s first buyback mechanism, which automatically passes on revenue to contributing platform users. This way, users receive protocol revenue on top of industry leading borrowing/lending rates, creating the potential for the highest long-term yields in DeFi. The protocol also has an on-chain treasury which captures and shares liquidation revenues with users.

Minterest is a decentralised lending protocol. It comes with a unique economic model where the protocol itself captures 100% of the value created from its functions, including interest, flash loan, and auto-liquidation fees. This value is exchanged via an automated Buyback process for its native MNT token, which is then distributed to its users in return for their participation in the protocol's governance.

Minterest is therefore designed and built to give maximum benefit to those who create its value - its community of users. Minterest's feature innovations revolve around breakthroughs in two key aspects of lending protocol model architecture, each fundamental to ensuring the protocol's ability to be valuable to its users - value capture and liquidity mining, via automated liquidation of loans and its Buyback, which allows the capture of 100% of value created by the protocol and its distribution to users to incentivise their participation in both the protocol and its governance processes.

Operating its own on-chain liquidation and buyback mechanisms, the Minterest protocol automatically distributes the value it captures from interest rate, flash loan and liquidation fees to users. It does this via MNT tokens that it buys on-market, ensuring your highest long-term yields.

The value of any digital platform is almost solely determined by its ability to generate network effects, where each new user added generates increased value for all other users. Lending protocols are a type of digital marketplace platform. For the Minterest protocol to optimise value delivered to its users, it must generate network effects more powerful than sector peers, otherwise it will fail to compete. The protocol does this via an additional network effect to existing marketplace network effects and which is not exhibited by other lending protocols. All things being equal, it means Interest has the capability to generate more powerful network effects than other lending protocols and in doing so has the potential to outcompete.

Despite the critical role they play in the ultimate success of the protocol, network effects are generally considered notoriously difficult to identify and quantify. Whether Minterest's model employs a previously unknown, DeFi specific network effect, or if it is an extension of existing ones, is the purview of academia and outside the scope of this whitepaper. What is relevant, is how the protocol's architecture generates this second network effect in order to further its performance. This revolves around breakthroughs in two aspects of lending protocol model architecture: value capture and liquidity mining.

The Minterest protocol captures 100% of the value generated through its activity, essentially a form of platform monetisation of its functions. This occurs as the protocol's Treasury captures interest rate fees, as well as liquidation fees via the protocol's internal auto-liquidation process i.e. this is not lost to external parties, plus flash loan fees (subject to governance processes enabling these). The capturing of liquidation fees is significant since no other lending protocol does this. The result of Minterest's value capture is that in a dollar-for-dollar liquidity comparison Minterest captures more value than its peers, and given the sheer quantum of liquidation fees in DeFi, quite possibly significantly more.

Minterest NFTs have functional utility, meaning they enable the holder to interact with the protocol in ways that deliver benefits through their holding of an NFT. Each NFT is unique and has specific benefits that are only provided to its holder.

With limited exceptions and primarily relating to earlier Minterest fund raising activities, NFTs are issued to participants of the Minterest Next Level public token sale as per its terms and conditions.

Minterest's Tokenomics includes a total MNT token supply of 100,000,030 MNT which begin emitting block-by-block upon the launch of the protocol during its Private Launch. The unlocking process is smooth, with no sudden tranches of tokens being released. The Minterest protocol's tekkenomics structure has been designed to align incentives across all stakeholders, with the longevity of the Minterest protocol being top of mind.

“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.” Lee Pennington

Lee Pennington

Investment Partner at Digital Strategies

Minterest is a ground-breaking lending protocol built by industry leaders to service billions in TVL and to challenge existing DeFi incumbents. The protocol gives users a decentralised token money market, combined with a uniquely fair incentive structure that will facilitate and promote widespread adoption of DeFi. By utilising its own buy back mechanism, the protocol passes on 100% of revenue generated to its community of active participants.

It’s the world’s first lending protocol capturing 100% of value from the combination of interest rate, flash loan and liquidation fees which are then passed on to Minterest users participating in the protocol’s governance over time. This results in the highest long-term yield in the crypto borrowing/lending sector.

Loyalty bonuses will be passed onto users who provide liquidity in the long term and users will earn MNT tokens for their commitment to the protocol’s governance processes over time. This feature incentivises long-term liquidity to be built and maintained for the benefit of all Minterest users.

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.