How does the Midas protocol integrate traditional finance with DeFi?

At the end of March 2024, the asset tokenization platform Midas successfully completed a $8.75 million seed round financing with the participation of well-known institutions including Coinbase Venture and GSR. This achievement marks a further consolidation of Midas's position in the public eye while strengthening its mission to connect traditional finance with decentralized finance.

After more than two years of intensive research and development, Midas is excited to launch its flagship product, mTBILL. This ERC-20 based token provides a new way for stablecoin investors to earn returns on the blockchain by tracking short-term U.S. Treasury bonds in the BlackRock Treasury fund, cleverly blending the characteristics of traditional finance and decentralized finance.
In the global financial system, stablecoins are not only a stable anchor in the volatility of the cryptocurrency market but also a key to efficient cross-border transactions. Faced with the endless intermediaries and cumbersome processing times in the traditional financial system, stablecoins have become an effective alternative for global transfers due to their speed and significant cost-effectiveness.
However, with rising interest rates, the supply of stablecoins has also experienced dramatic fluctuations in recent years. This phenomenon highlights the urgent market demand for a DeFi solution that can provide competitive returns. mTBILL was born to address this challenge, designed not only to distribute returns on-chain but also to allow users to freely participate in the DeFi ecosystem.
In the rapidly evolving financial landscape, Midas stands at the forefront of innovation with mTBILL. By introducing mTBILL, Midas is not only securing a place in the market but is actively redefining it. The launch of this token is a significant advancement, combining the stability of traditional financial instruments with the efficiency and usability of DeFi, providing a sustainable, fair, and fully compliant way for investors to take full advantage of the potential returns of U.S. Treasury bonds while enjoying the benefits of both worlds, ensuring that the future of financial empowerment can benefit everyone.

Midas Protocol: A Bridge Between Traditional Finance and Decentralized Finance

Midas is an asset tokenization platform that gradually carves out its niche in the blockchain space by bringing institutional-grade assets onto the blockchain through tokenization. This innovative approach has significant implications for the decentralized finance (DeFi) sector.

The Origin of mTBILL

The core product offered by Midas is mTBILL, an ERC-20 token that exemplifies the fusion of traditional financial tools with the versatility of blockchain technology. As Midas's first asset tokenization product, mTBILL quickly gained attention in the market, currently offering an annualized yield of 5.23% and a total value locked (TVL) of $3.03 million.
mTBILL is directly linked to the iShares $Treasury Bond 0-1 yr UCITS ETF (IB 01.L), which manages assets totaling $14.6 billion, with an average daily trading volume of $25.18 million and an annualized yield of 5.26%, rated AA by S&P. Each mTBILL token corresponds to one share of IB 01.L at a 1:1 ratio.

As the underlying Treasury bonds under IB 01.L mature, the assets will be reinvested, thereby increasing the net asset value (NAV) of the fund. Consequently, as the total NAV of the fund accumulates, the value of each corresponding mTBILL token will also increase accordingly. Therefore, the redemption of mTBILL products will be calculated based on the current NAV.
Like other real-world asset (RWA) projects, purchasing and redeeming mTBILL products requires KYC and AML verification, with individuals and institutions in the U.S. unable to participate, while there are no such restrictions for other countries. The initial purchase threshold is set at 12,000 USDC; although this threshold is not low, it does not specify which types of investors can purchase, as long as the funds meet the requirements. It is worth noting that the project team has not explicitly stated the threshold requirements for asset redemption, only mentioning the purchase threshold. If some mTBILL shares are purchased on the secondary market, whether they can be redeemed immediately still needs further confirmation, although the project team states that the response is instantaneous, the purchase and redemption process still requires some time.
Additionally, Midas's main focus in the RWA space is on DeFi without the need for tokens. After purchasing mTBILL, buyers can participate in related on-chain DeFi projects, primarily lending, without requiring the counterparty to have KYC qualifications. Trading in the market is allowed, but if asset redemption is to occur, the redeemer must meet KYC and other relevant verifications. Midas's approach is to audit the inflow and outflow of mTBILL without imposing restrictions during the process.
In terms of fees, Midas does not charge an issuance fee during the project's initial phase, only a 0.07% ETF management fee. It is currently unclear whether there will be subsequent fees.
Overall, in most RWA projects dominated by institutions and high-net-worth investors, the Midas protocol highlights the characteristics of RWA products in on-chain DeFi use, integrating RWA products into the existing DeFi ecosystem to provide additional product yields and utilization. Although evidence supporting related lending protocols has not yet been seen at this stage, Midas is still in its early phase. With support from institutions like Coinbase and GSR, the use cases for DeFi may continue to expand. Interested investors should also pay attention to the aforementioned risk points—product-related descriptions are not yet complete.
Midas's flagship product, mTBILL, as a permissionless ERC-20 token, achieves a 1:1 tracking of short-term U.S. Treasury bonds through the highly liquid BlackRock Treasury Bond (iShares $ Treasury Bond 0-1yr UCITS ETF). This design not only allows mTBILL to be freely traded on DeFi platforms but also ensures its close integration with traditional financial products, providing a bridge for crypto asset investors to directly access traditional financial markets.
Holders of mTBILL can earn returns from the interest generated by U.S. Treasury bonds while enjoying a complete suite of DeFi platforms, services, and strategies offered by permissionless ERC-20 tokens. The composability of DeFi allows different decentralized applications (dApps) to interact seamlessly and effectively, enabling users to leverage mTBILL to devise unique investment strategies tailored to their needs across various DeFi platforms.
Midas's assets maintain the open transparency provided by the blockchain's immutable ledger. Each mTBILL token represents a share of a BlackRock Treasury Bond and can be fully redeemed for its corresponding net asset value (NAV), ensuring the safety and transparency of investments.
Through the Midas platform, investors can not only participate in traditional financial markets but also engage at a lower cost and with fewer intermediaries, which traditional financial products cannot offer. Additionally, Midas's smart contracts are audited by leading security firms, further enhancing the platform's trustworthiness and security.
As the DeFi ecosystem continues to mature and develop, Midas and its product mTBILL are expected to play an increasingly important role in the global financial market. It not only provides traditional investors with a gateway to the crypto market but also offers crypto investors a bridge to traditional financial markets. With more institutions and high-net-worth investors participating, Midas is poised to continue expanding its product line and market influence, driving the entire financial ecosystem toward a more open and interconnected direction.
In summary, the launch of Midas and mTBILL is an important milestone in the integration of crypto finance and traditional finance, providing global investors with new investment channels and value-added opportunities. As the platform continues to develop and improve, it is expected to bring more innovation and opportunities to the financial market.

The Power and Potential of Real-World Assets (RWA)

Real-world assets (RWA) refer to assets that exist in the physical world, which can be utilized in the cryptocurrency space through tokenization technology. The development of blockchain technology provides new opportunities for the value transfer of these assets, making them easier to trade and convert liquidity. The introduction of RWA not only provides a new foundation for decentralized finance (DeFi) but also greatly promotes the growth of this sector.

Diverse Applications of RWA Tokens

RWA encompasses multiple fields, including but not limited to:
1. Real Estate: Tokens associated with land, residential, or commercial properties are often viewed as security tokens, as their value is linked to the underlying assets. These tokens can be used to generate regular cash flow or passive income, for example, by lending or mortgaging property-based NFTs to others, thereby earning rental or royalty income.
2. Artworks: Tokens related to collectibles may be seen as utility tokens, as they are primarily associated with goods or services. Platforms like Masterworks.io actively tokenize expensive works by artists such as Banksy and Warhol, providing individual investors with the flexibility to diversify their investments.
3. Commodities: Tangible and physical products, including gold, oil, agricultural products, etc. This category also includes central bank digital currencies (CBDC) backed by central bank reserves, as well as many other RWA-related directions.

Leaders in RWA Support Platforms

The tokenization and application of RWA are supported by several platforms, including:
Silver Collaboration: A collaborative project ensuring that real estate can be used to mine DAI tokens.
Goldfinch: Allows businesses to access DeFi opportunities without requiring crypto collateral, such as crypto lending, through a unique verification method by a series of auditors.
Centrifuge: As a leading player in the RWA token market, Centrifuge enables investors to invest in assets such as invoices, housing mortgages, and even homes through cryptocurrency.
Maple: A lending protocol focused on unsecured transactions, involving institutional borrowers, pool representatives, and lenders.
Ondo Finance: Brings institutional-grade real-world financial products into the DeFi ecosystem, allowing trading after tokenizing assets and completing AML and KYC processes.
RWA brings liquidity and global accessibility to the tokenization of traditional assets such as real estate, bonds, and artworks, not only improving the market efficiency of these assets but also providing new growth opportunities for DeFi. With technological advancements and the improvement of regulatory frameworks, RWA is expected to continue expanding its market share in the coming years, becoming a hot topic for investors and market participants.
Therefore, from both the investor's perspective and the overall health and maturity of the market, RWA is an important narrative worth paying attention to. It bridges the gap between traditional finance and the crypto world, providing a more robust investment environment by ensuring compliance and transparency, which may attract more participants from the traditional finance sector into the crypto market.
As RWA continues to develop, they not only bring innovation to the existing financial system but also provide new ways for individuals and businesses to raise capital, thereby reducing the cost of funds and improving capital efficiency. For example, through RWA tokenization, small businesses and individual entrepreneurs can directly offer shares of their assets to global investors, which is often difficult to achieve in traditional finance.
Moreover, as blockchain technology continues to mature, the applications of RWA are also expanding, with their scope extending from real estate and artworks to more tangible assets such as agricultural products, energy, and various forms of commodities, even including potential future central bank digital currencies (CBDC). This diversification not only increases market depth but also brings a broader range of participants and more complex financial instruments to the DeFi ecosystem.

The Introduction of RWA Bridges the Gap Between DeFi and Traditional Financial Markets, Promoting the Integration and Innovation of Both Fields

The Midas protocol, as an innovative asset tokenization platform, successfully brings traditional financial assets such as U.S. Treasury bonds into the decentralized finance (DeFi) space through its mTBILL product, demonstrating the tremendous potential for seamless integration between crypto technology and traditional finance. Midas not only provides a bridge for traditional assets to circulate and trade freely on the blockchain but also enhances investor trust and participation in the DeFi space through its regulatory-compliant strategies and transparent operations. Additionally, mTBILL, as an innovative product, offers DeFi investors an attractive investment channel through its stable returns and high liquidity characteristics, ensuring both the safety of funds and their efficient utilization.
At the same time, the introduction of real-world assets (RWA) bridges the gap between DeFi and traditional financial markets, promoting the integration and innovation of both fields. The tokenization of RWA not only allows tangible assets such as real estate, artworks, and various commodities to enter the crypto market but also greatly enhances the liquidity and global accessibility of these assets, bringing new growth opportunities and broader market participation to the DeFi ecosystem. The development and improvement of RWA signify the maturity and expansion of the crypto market, providing more interactive opportunities and collaborative platforms for holders of traditional financial assets and cryptocurrency investors.
The combination of Midas and RWA marks an important developmental direction, having a profound impact not only on the cryptocurrency market but also opening new pathways for the future development of the global financial market. Through these innovations, Midas has not only achieved significant breakthroughs in technology but also provided substantial value for investors and market participants in practical operations, showcasing the immense potential for widespread application and promotion of blockchain technology in the global financial sector. This successful case of cross-border integration serves as a reference and inspiration for other financial technology innovations and implementations, and is expected to lead to more technological advancements and market transformations.