Mutuum Finance V1 protocol crosses $200 million TVL milestone with Phase 3 roadmap

Mutuum Finance has exceeded 200 million dollars with the total value of the V1 protocol test network, which is an important milestone as the project moves forward in phase 3 of its roadmap.

Mutuum Finance (MUTM) reached a new technical milestone. The project’s V1 protocol has officially crossed $200 million in Total Value Locked (TVL) in its testnet environment. This increase comes as the project enters Phase 3 of its development roadmap, focusing on stress-testing its core financial engine before moving on to a full mainnet launch.

Currently, Mutuum Finance has funded more than $20.7 million and established a base of more than 19,000 individual holders. The original MUTM token is currently priced at $0.04. By reaching the $200 million TVL mark, the system demonstrated its ability to manage large-scale liquidity and handle complex interest calculations in a simulated environment.

Mutual Finance

The V1 protocol serves as the functional basis for the entire Mutuum Finance ecosystem. It allows users to interact with decentralized liquidity pools without the need for traditional intermediaries.

The system is currently being tested on the Sepolia network to ensure that all smart contracts are executed accurately under volume conditions. By providing a risk-free environment for users to test these mechanics, the team aims to ensure a smooth transition to the live market.

mtToken systems and debt tokens

One of the key features of the V1 Protocol is the mtToken system, which is how liquidity providers earn revenue. When a user puts an asset like ETH into a pool, they get mtTokens (like mtETH) as a digital receipt. These tokens are yielding, meaning they increase in value relative to the original deposit as interest is charged to borrowers. For example, if a lender offers 100 ETH to a pool with a 10% Annual Yield (APY), their mtETH tokens will eventually be paid for 110 ETH.

Along with yield generation, the protocol uses a debt token system to provide a transparent way to track outstanding debts. When a borrower receives a loan, the system issues loan tokens to their account. If a user borrows $5,000 in USDT, their account will show Debt-USDT 5,000. As interest accumulates, this balance will increase to reflect the total amount owed.

Automated risk management and one-click features

To maintain the security of the $200 million TVL protocol, Mutuum Finance uses a strict Loan-to-Value (LTV) system. This requires all loans to be over-secured, meaning the value of the collateral must be higher than the loan amount. For example, with an LTV of 75%, a borrower with a $10,000 mortgage can borrow up to $7,500. This arrangement benefits the borrower by giving them access to liquidity without forcing them to sell their digital assets, allowing them to keep their investment active.

The V1 protocol also includes Secure Credit Presets, which are “one-click” tools designed to simplify risk management. Users can choose from three predefined risk profiles: safe, balanced and aggressive. Instead of manually calculating complex collateral ratios, these presets automatically adjust the borrower’s ability to maintain a healthy safety buffer. To prevent bankruptcy, an automated liquidation bot monitors these positions in real time and sells a portion of the collateral if its value falls too close to the loan level.

Mutuum Finance road map

With Phase 3 currently underway, Mutuum Finance’s roadmap is focused on expanding the protocol’s services and ensuring long-term sustainability. The project has already completed manual checks with Halborn Security and maintains a 90/100 scan score from CertiK.

A key part of the future roadmap is the development of the architecture of the two markets. This includes a peer-to-peer (P2C) marketplace for instant liquidity from automated pools, ideal for common assets like ETH or stablecoins.

Additionally, the team is building a Peer-to-Peer (P2P) marketplace where users can directly negotiate custom loan terms. This P2P model is designed for unique or less liquid assets that require specific agreements such as Dogecoin (DOGE) and Shiba Inu (SHIB). Offering both models, the protocol services everything from small retail loans to institutional-scale credit lines.

Purchase and distribution mechanism

To ensure self-financing of the protocol, Mutuum Finance has planned a purchase and distribution mechanism. Under this model, a portion of the fees generated from using the platform is used to purchase MUTM tokens from the open market. These tokens are then distributed to users who participate in staking in the Security Module.

The safety module acts as a decentralized insurance fund that protects the protocol during extreme market volatility. By staking their mtTokens on this module, users provide financial support for the network’s liquidity. In exchange for this support, they receive MUTM tokens, which are collected through the buy-and-sell mechanism.

With $20.7 million raised and Protocol V1 demonstrating the ability to manage $200 million in total package value (TVL), the project enters the next phase of the roadmap. Its design includes automated risk management mechanisms, support for two-way market structures, and a reward model that is sustainable.