DeFi lending platform Minterest just raised $6.5 million from a fundraiser, the platform aims to channel all fees, interest, and revenue back into the protocol for its users.
A number of venture capital firms, including KR1, DigiStrats, Bitscale Capital, PNYX Ventures, CMT Digital, and others, contributed to the private financing round.
The Estonian team plans to utilize the funds to further create a loan and borrowing protocol that is “designed to make DeFi fairer for users,” according to the company. Minterest has a buyback mechanism that captures value and distributes 100% of the platform’s revenue to its users.
It automates the liquidation process, allowing fees and interest to be collected and returned to users. Some DeFi protocols make money by allowing a limited number of users to purchase out of collateralized holdings at a discount to the market price.
According to an announcement, Minterest will use any operating surplus to buy its own native MNT coin, which will subsequently be distributed to its users.
This way, a user’s earnings are boosted by some of the protocol’s awards and income, potentially resulting in better long-term yields.
The protocol is built on the concept of “flywheel tokenomics,” which means that value is captured and then returned to the system to generate additional value.
Josh Rogers, the founder and CEO of Minterest, emphasized that this new DeFi project creates value for the whole user environment rather than extracting it for a select few, Adding:
“Through their interactions, users create the value on the platform, therefore, making their participation equitable and rewarding. Without its community, any protocol would be obsolete, and our model places our community at the centre of the value-creation cycle.”
He said that the protocol would be “audited by highly renowned auditors,” but did not provide a launch date.
The new protocol is named after a digital investing platform created in Singapore in 2017. The Southeast Asian Minterest is more finance-oriented, with an aim to provide clients with access to alternative investments and diversified investment alternatives.
In other fundraising news, the Avalanche Foundation revealed on Sept. 16 that it had received a massive $230 million investment from a venture capital firm led by Polychain and Three Arrows Capital. It intends to use the funds to help build the DeFi ecosystem and the projects that run on its blockchain.