MYSO Closes $2.4M Seed Round
MYSO Finance closes $2.4M Seed Round, to build the leading DeFi protocol for Zero-Liquidation Loans. Its team will be deploying this capital to accelerate the development of MYSO’s zero-liquidation loan protocol, called “IKARUS”. The IKARUS protocol allows users to borrow without liquidation risk while offering Liquidity Providers (LPs) yield for bearing this risk.
MYSO is proud to be backed by several seasoned crypto VCs, strategic investors, and angels, including Huobi, Nexo, Wintermute, GSR, Hashkey, CMT Digital, Nothing Research, Caballeros Capital, Advanced Blockchain, Ratio Ventures, Symbolic Capital Partners, Jabre Cap and Mentha Partners.
The Problem: Liquidations in DeFi Borrowing Protocols
Current DeFi borrowing and lending protocols take a liquidation-centered design approach, meaning they trigger liquidations as soon as a target Loan-to-Value (LTV) is breached.
This design approach comes with several drawbacks: first, users that get liquidated must pay a liquidation penalty (users have paid over $60M in liquidation penalties so far). Secondly, it creates operational overhead for borrowers, requiring them to constantly monitor their health factors and LTV levels.
And the worst case, borrowers may find themselves unable to prevent being liquidated as repaying or topping up a loan can be heavily delayed in times of market turmoil and congested networks.
Thirdly, External prices are needed from oracles to orchestrate liquidations. However, such external prices are prone to manipulation. Might not even be available on some blockchains and for some cryptocurrencies, such that borrowing facilities cannot be offered in these cases.
To address these shortcomings, MYSO Finance adopts a rather different and innovative protocol design. Approach to permissionless lending and borrowing. Users borrowing with the IKARUS protocol can transfer the liquidation risk to LPs, who in exchange can earn a risk premium for bearing this risk.
What is IKARUS
The IKARUS protocol is structured like a DEX. Meaning for every cryptocurrency pair an individual borrowing market and liquidity pool can be created. LPs can fund each market by providing both assets of the associated pair. While borrowers can borrow one asset after posting the other as collateral, and vice versa.
A unique characteristic of the IKARUS borrowing protocol is that it is oracle-independent. Meaning repayment and settlement of loans happen by virtue of incentives rather than requiring external price information to orchestrate this process. Naturally, it is in the users’ own interest to repay their loans. Value of their pledged collateral remains above the amount owed. If this is the case and they repay, then LPs receive an interest payment, and otherwise, if users don’t repay, LPs receive the pledged collateral.
ABOUT MYSO
MYSO Finance is an abbreviation for a Million Yield Structuring Opportunities. Aims to combine concepts from the world of DeFi with TradFi. Building game-changing financial products, starting with the IKARUS protocol as its first product.
RESOURCES
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