How Minterest’s model encourages long-term participation

High yield and eye-catching rewards are no longer enough to get real value in DeFi in 2024. Minterest has developed one of Web3’s early lending protocols designed to encourage long-term participation. 

Keep reading to learn how we’ve created a protocol where true supporters can pursue greater rewards.

Up to 100% of fees is designed to be routed back to users

Unlike other lending protocols in the market, Minterest captures 100% of protocol fee value through several mechanisms, including:

• Interest Rate Spread
• Flash Loans
• Minterest’s exclusive solvency engine. 

This approach aims to improve value capture, can increase rewards for lenders and may reduce effective cost of borrowing. By redirecting captured net fees to users when the Buyback Engine is activated, the model is intended to encourage ongoing participation.

TVL drives rewards

As Minterest’s TVL grows it can create a positive feedback loop since increasing TVL generates more fees, fees generate greater buy back, greater buy back provides greater rewards for users, and thus attracts further liquidity. This cycle of growth improves the net yields for both lenders and borrowers, drives sustainable tokenomics, and increases rewards to strengthen users’ loyalty to Minterest.

Governance rewards

Governance rewards are the key to protocol value in the Minterest model. Minterest governance rewards are directly connected and sourced from the buyback mechanism. The longer users stake $MINTY, the more incentives and governance weight they receive in voting rights based on a loyalty boost, rewarding long term active participation in the governance process. 

This voting right and reward system enriches the governance process and ensures that true Minterest supporters are given generous yields and bonuses.

Strategic reserve

The Strategic Reserve is a treasury of $MINTY tokens to be utilised by the future Minterest DAO to support the protocol’s growth. 

A portion of the Strategic Reserve is staked and grows. The rewards can be used by the Minterest DAO in a multitude of ways via fiscal and monetary policy-inspired levers to benefit the protocol and its users including, but not limited to:

• Growth: The DAO can utilise treasury earned from the buyback to fund new developments beneficial to the community. 
• Token supply management: The DAO can elect to stake and lock any buyback tokens away to reduce on-market supply. 
• Refresh emissions: As opposed to other lending protocols that run out of token emissions, Minterest can utilise Strategic Reserve earnings to recycle them back into emissions to continue providing greater rewards than other protocols.

Minterest NFTs

Minterest NFTs are designed to provide a unique use case in DeFi as a core of the protocol. 3000 NFTs span across 12 levels, each granting a holder a different perk. The main utility of the NFT is the emission booster granted to the holder, currently increasing yields by up to 50% depending on the tier.

NFTs attract early adopters to Minterest, bootstrap liquidity, encourage education and loyalty to the protocol. Minterest NFTs fulfil a multi-layered mission as they increase emission rewards, effectively boosting the amount of $MINTY staked in governance, which in turn increases governance rewards received from the buyback mechanism. 

Learn more about Minterest NFTs here, check out the beautiful Minterest NFT Gallery and get started on your collection on OpenSea and stay tuned for the upcoming Minterest NFT collection launch on Mintle. 

Wrapping up

Minterest creates an economic model that rewards long-term engagement and participation. Through its solvency engine, governance rewards, strategic reserve, and the resulting token scarcity, Minterest has developed a cohesive ecosystem that incentivises users to invest in the platform’s future. 

Fee‑routing percentages, yield boosts, governance mechanics, and illustrative APYs/APRs are targets based on current parameters and may change through on‑chain governance, audits, or market conditions; they may be modified, delayed, or suspended without notice. Figures and examples are illustrative only; results are not guaranteed, and nothing herein constitutes financial, legal, or investment advice.

18, April 2024