Mutuum Finance has reached over $200 million in TVL on its liquidity testnet, while the team recently announced a new feature added to its lending and borrowing protocol running on the Sepolia testnet.
Mutuum Finance (MUTM)
In its current version of the protocol, the team has outlined that cryptocurrencies such as USDT, ETH, LINK, and WBTC are available in the testnet environment. Users are able to lend, borrow, and stake within the platform. Alongside crossing the $200 million TVL mark, the project has also raised over $20.7 million, with more than 19,000 holders participating.
The native token of Mutuum Finance is MUTM, which is priced at $0.04. The token smart contract has been reviewed by CertiK, reaching a Token Scan score of 90/100.
From the product side, the lending and borrowing smart contracts have also undergone an audit conducted by the security firm Halborn.
V1 Protocol Core Features
The core features of its V1 protocol include mtTokens, debt tokens, stability factor monitoring, and an automated liquidator bot. mtTokens represent proof of deposit and accumulate yield over time. Debt tokens track the borrowed amount and the interest accrued on positions. The stability factor helps monitor the safety of collateralized positions, while the automated liquidator bot observes risk levels and triggers liquidations when required to maintain protocol stability. Recently, the team added a new feature that enables users to choose borrowing presets.
If users mint WBTC, they will receive mtWBTC (mtTokens) in return after supplying them into the protocol. These mtTokens can be staked in the safety module to receive dividends, in addition to the yield accumulation from lending activity based on APY.
Part of the protocol fees generated from lending interest, liquidation fees, and other platform activity is allocated to purchasing MUTM tokens from the open market. These tokens are then distributed to users who stake their mtTokens. This buyback and distribute mechanism links protocol usage with token demand while providing additional incentives for long-term participation.
From the borrowing side, those WBTC tokens can be posted as collateral instead of selling them, allowing users to retain potential price appreciation from WBTC while borrowing other crypto assets such as ETH or USDT.
Borrowing presets give investors the ability to choose between safe, balanced and aggressive options. The safe preset keeps borrowing well below the maximum loan-to-value level, reducing liquidation risk. The balanced preset allows moderate borrowing relative to the deposited collateral, offering a middle ground between safety and capital efficiency. The aggressive preset enables borrowing closer to the maximum LTV threshold, allowing greater access to liquidity while also increasing exposure to liquidation risk if collateral value declines.
For example, if a user deposits $5,000 worth of ETH as collateral and the maximum loan-to-value ratio is 80%, the maximum borrow limit would be around $4,000. Under the Safe preset (SF ≥ 2.0), borrowing would typically remain significantly below that level, for instance around $2,000, maintaining a large safety buffer against liquidation. With the Balanced preset (SF ≈ 1.7), a user could borrow approximately $2,800–$3,000, utilizing more of the collateral while still keeping moderate protection. Under the Aggressive preset (SF ≈ 1.4), borrowing could move closer to the upper limit, for example around $3,500–$4,000, increasing liquidity access but also raising liquidation risk if the ETH price declines.
Overall, the project continues to actively develop its lending and borrowing protocol, enhancing its features ahead of the planned mainnet launch. According to its roadmap, future ecosystem developments include the introduction of an overcollateralized stablecoin, along with multichain expansion and Layer 2 integration to improve scalability and protocol accessibility.
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