Minterest has a unique protocol-managed buyback process that will allow in passing more revenue to its users. It uses a liquidation process managed by the protocol itself that automatically handles the liquidation process without involving any third party. As a result, the protocol can hold on to a significant amount of fee income that generally flows out of Minterest along with the fee captured from interest and flash loan.
Source: Minterest
Now, we will see the current problems that DeFi have nowadays:
Problem With The Current DeFi Ecosystem
Decentralized Finance protocols offer the following two kinds of rewards to their users:
1. Via Trading Fee
Users who provide liquidity into the protocol earn a reward proportional to their stake in the liquidity pool. The reward is from the trading fee that is done against their participating pool
2. Buy-Out Under a Collateralized loan
Here the number of participating users is really small and is generally confined to some elite user group known as liquidators. These liquidators repay the debt positions of borrowers with under collateralized assets in exchange for the borrower’s collateral. And in return, the liquidators are incentivized. This additional fee is pulled out from the borrower by trading his funds at a discounted price than the market rate.
This overall process helps the lending protocols to accumulate hundreds of millions in annualized revenue each year. Wealthy users generally handle this lending process. The liquidator never discloses the exact liquidation data. However, the big group of users who participates and helps in generating revenue is still unaware and barred from the benefits that the protocol earns in actuality.
Minterest Is The Solution
The Minterest protocol aims to bring a fair financial model by unwinding the hidden profit margin from the current DeFi ecosystem. In existing DeFi protocols, the elite members mainly dominate the percentage of the profit thereby leaving very little share for other users. Nevertheless, Minterest will help in generating a lucrative and fair reward distribution system for all active community users.
To achieve this, the protocol will use a unique, on-chain, and automatic liquidation process that will combine the fee collected from interest, flash loan, and liquidation and use it to buy the platform native $MNT tokens on-market. Later, Minterest will distribute these tokens to the users. The whole idea behind this concept is to create a powerful network supported by active and loyal users by offering high yield liquidity mining.
On the other hand, the Minterest team consists of highly skilled crypto experts who are capable of doing extensive research and analysis on the blockchain data and the returns generated from it. Thus, Minterest believes that the business model will help in bringing out more revenues than other existing DeFi protocols.
Minterest Features
- High Yield Model– Offers high APY/APR to active platform users as compared to the existing DeFi protocol.
- Fully Audited- Platform code testing by reputed auditors in the blockchain space before its early access phase.
- Security– The design of the system will ensure secure yield for the long term.
- Transparent System- Maintains complete transparency at the code and operational level
- User-Centric Dashboard- Offers customized portfolio and risk analysis tools
- Real-Time Risk Analysis- Allows the users to analyze their planned action, check associated risks before entering into new positions
- Additional Rewards to Loyal Users- Platform reward increases from month to month for loyal platform users.
Partnership
The Minterest platform has a partnership with different blockchain pioneers. Here is the list:
Conclusion
Minterest protocol aims to build the next layer of DeFi by offering an on-chain liquidation process. The removal of third-party liquidators makes the protocol a sole beneficiary of all the income generated through liquidation fees, interest rates, and flash loan fees.
The project believes that this method will help in generating more revenues than any other existing DeFi protocol. It then planned to pass it on to its platform users by using a unique, world’s first in-protocol buyback process.
The model along with team expertise and a loyal group of users can altogether build a trustworthy ecosystem. This can help the platform to grow and strengthen. And make ways for long-term high-yield for the users in the DeFi industry.
