Multi-Asset Collateralization

In many traditional DeFi systems, minting a decentralized stablecoin involves single-asset vaults, where each collateral type is siloed in a separate position. Mutuum, however, envisions a multi-collateral approach, allowing users to deposit various supported assets into the protocol and mint its stablecoin from a consolidated pool of collateral. Because multiple asset types can back a single borrowing position, the stablecoin’s value remains secured by a diverse range of tokens.

From a user’s perspective, the borrowing process remains straightforward. After supplying collateral to Mutuum and marking it as available for borrowing, users can then open a multi-collateral position to generate the stablecoin. This design confers greater flexibility, particularly in terms of managing exposure to price fluctuations. When several assets underpin a single debt, users avoid the need to juggle multiple positions, stability factors, or distinct vaults. If a user’s objective is to enhance their overall collateralization, they can deposit additional assets without having to close or refactor a separate position for each token.

By eliminating the friction of single-asset vaults, multi-collateralization also provides a more robust defense against volatility - if one collateral experiences a downturn, the risk is partially mitigated by other assets in the same position. In summary, multi-collateral borrowing within Mutuum’s ecosystem expands user control, streamlines collateral management, and maintains a simpler, more unified approach to decentralized stablecoin minting.