<h2 id="header-0">Introduction</h2><p>With a TVL of approximately $19 billion, lending has emerged as one of the most validated use cases in Decentralized Finance (DeFi), allowing users to earn yield on otherwise idle tokens. However, conventional DeFi lending protocols have concentrated mostly on users who hold mainstream blue-chip tokens. On the other side, users holding smaller midcap tokens typically don’t have options available to earn yield on niche tokens. MYSO is set to change this narrative using so-called “Covered Calls”, a popular yield enhancement from Traditional Finance (TradFi), and bringing them into DeFi lending.</p><h2 id="header-1">The Challenge</h2><p>The majority of DeFi lending activities are centered around well-known mainstream tokens like Bitcoin and Ethereum. This concentration has resulted in standardized one-size-fits lending systems, which typically lack customization options for users seeking more personalized yield enhancement opportunities, especially in the realms of niche tokens. Despite niche midcap tokens frequently having market caps in the hundreds of millions, they have been notably underserved. This is because integrating niche tokens into conventional DeFi lending protocols is oftentimes impossible due to a lack of reliable on-chain price information and lower DEX liquidity, both of which conventional lending protocols cannot easily handle.</p><h2 id="header-2">MYSO Approach</h2><p>MYSO uses financial engineering primitives from TradFi, so-called “Covered Calls”, to provide alternative yield enhancement opportunities, especially for users holding smaller niche tokens. With MYSO, users can lend almost any ERC-20 token and earn upfront cash for doing so. Loans are structured as covered calls, where users have complete flexibility in setting loan duration and upside cap. If, at the expiry of the loan, the token price is below the upside cap, the user gets back their tokens; otherwise, they receive cash as if they had sold their tokens at a premium. In contrast to conventional covered calls, MYSO users don’t have any counterparty risk when lending their tokens. With its three-time audited v2 protocol, MYSO users have full transparency about the covered call loan transaction and can verify that cash collateral has been sent to secure any potential conversion of tokens</p><p><img src="https://academy-public.coinmarketcap.com/optimized-uploads/f7e6c8b2a6da425eb6e0325b2265c6e1.jpeg" /></p><p>Image: MYSO Finance Ecosystem. Source: <a href="https://www.myso.finance/" rel="noopener noreferrer nofollow">MYSO Finance</a>.</p><h2 id="header-3">Use Cases &amp; Benefits</h2><p>MYSO is particularly useful for larger token holders like funds, angel investors, founders, team members, and DAO treasuries. These users oftentimes hold larger amounts of niche tokens and seek ways to earn yield without selling. Using MYSO, they can put idle tokens to work for covered call lending, i.e., lend tokens to institutional users in exchange for an upfront premium. For example, one MYSO user loaned $150k of LQTY for 90 days with an upside cap of 110% and, in exchange, earned an immediate upfront premium of $14k USDC. If, after 90 days, LQTY stays below the 110% upside cap, the whale receives the originally loaned LQTY back and otherwise gets $165k USDC according to the 110% upside cap. In contrast to conventional DeFi lending solutions, MYSO users earn cash immediately upfront. And in comparison to conventional covered calls users here don’t have any counterparty risk.</p><h2 id="header-4">ABOUT</h2><p>MYSO originated as one of the finalists at the ETHGlobal Hackathon and is backed by several reputable crypto investors such as HashKey, Wintermute and Nexo. MYSO v2 is currently live on Ethereum, Arbitrum, and Mantle, and holds a TVL of $2.3M. The protocol has undergone three independent security audits with leading security experts from Trail of Bits, Statemind and Omniscia. MYSO has worked together with several well-known DAOs, such as Mantle, Pendle, Lybra and Rocket Pool, helping them create lending markets for their native tokens.</p><p>In 2024, MYSO plans to launch its own token, including a liquidity mining incentive program for early users of the protocol. In case you’re interested, reach out to hi&#64;myso.finance.</p><h2 id="header-5">Closing Thoughts</h2><p>MYSO is a novel DeFi lending protocol that opens up new yield enhancement opportunities for a broader range of tokens. By combining financial engineering primitives from TradFi with trustless DeFi settlement capabilities, MYSO stands as an innovative new DeFi protocol that allows larger token holders, including venture capital firms, to optimize their digital asset portfolios and take advantage of tailor-made covered call strategies.</p><p>Curious to explore more research articles and crypto news? Visit <u><a href="https://www.thevcwhisperer.io/" rel="noopener noreferrer nofollow">The VC Whisperer</a></u> to receive relevant and insightful Venture Capital and project overviews.</p>

MYSO Finance: Pioneering Covered Call Lending | Web3 Protocol Gems

Table of Contents

The VC Whisperer

Other articles published on Mar 28, 2024

BREAKING: Sam Bankman-Fried Sentenced To 25 Years In Prison

Cosmos Hub Expands with Bitcoin L2 Staking via Babylon Chain

Current Trends and Price Targets for Leading Cryptocurrencies

Pepe Price Prediction: PEPE Plunges 5% As This Potential BONK Challenger Teases A New Exchange Li...

XCAD Network and Pakistan’ Technical Education Authority of Khyber Pakhtunkhwa Government partner...

Litecoin breaks above $90 – Analysts believe $400 is next

Join our free newsletter for daily crypto updates!