Interest and Discount Rates

An overcollateralized stablecoin depends on an interest rate to maintain price stability, and this rate will be coded into Mutuum’s smart contracts. Unlike typical supply-and-demand models for interest, the stablecoin’s rate may be adjusted according to certain policy rules set by Mutuum’s maintainers. If desired, a discount mechanism could reward select users or stakeholders with lower borrowing costs. This dual structure - consisting of a protocol-wide rate and an optional discount for stakers - gives Mutuum the flexibility to adapt to market conditions while incentivizing community engagement.