Mellow Finance is a community DAO and future-yield-backed synthetic asset protocol. The protocol provides improvements on numerous yield farming techniques via a synthetic token. In the Mellow protocol, the token represents a fungible claim on any underlying collateral; however, the claim must be made by the depositor of the collateral. The DAO will concentrate on providing investment for ventures that will advance both the Binance community as a whole and the Mellow ecosystem.
Think of a bank. The bank gives you interest on the money you deposit. Associated with the account is a credit card. You are permitted to use the card to spend up to 50% of your deposit. You have to give up a little portion of the debt's worth up front in order to access it. The debt bears no interest. There are no recurring charges. Instead, any loan you have is automatically paid off by the interest you earn on your total deposit. This item is available from Mellow in DeFi form: Mellow loans are non-liquidating, interest-free, and self-paying.
Currently, Mellow offers mUSD to borrow against select USD-pegged stablecoins, and mBNB to borrow against BNB.
- 1.Deposit: To Start, select a yield strategy and deposit collateral (i.e Stablecoin or BNB) into that strategy.
- 2.Borrow: You can borrow up to the approved collateralization ratio and recieve a synthetic mAsset which a represents future yield equivalent to the borrowed amount.
- 3.Convert: Exchange mAssets for any other token using a Dex or Dex Aggregator. mAssets may also be used directly on various DeFi protocols.
- 4.Spend: Do what you want with the loan (i.e Buy more crypto, build savings, or many other options)
- 5.Wait: The user's chosen yield method will start collecting interest on the entire initial deposit; the harvested yield will gradually reduce their debt.
- 6.Withdraw, Borrow, Repay, or Self-Liquidate: Users have the option to self-liquidate at any moment to obtain their collateral minus any outstanding debt in addition to withdrawing their principal or borrowing more up to the collateralization ratio. Additionally, borrowers might choose to repay their loans (with the respective mAsset or underlying token). Mellow always recognizes 1 mAsset to be equal to 1 underlying asset (i.e., 1 mUSD = 1 DAI) for the purpose of borrowing, self-liquidating, and loan repayment.