Yield-Generating Collateral

In Mutuum’s envisioned model, collateral supplied to the protocol remains actively engaged in lending pools. As a result, the collateral itself can accrue interest from borrowers using those assets. This arrangement has an immediate benefit for stablecoin minters: earnings on the collateral effectively offset a portion of the interest owed on their stablecoin borrow positions. Consequently, even while locked in a borrowing arrangement, users’ assets continue to generate yield, contributing to a more capital-efficient experience.