Vault System and Minting Process
Overview
At the heart of Mynt (USDm) lies a robust vault-based Collateralized Debt Position (CDP) architecture deployed across Monad and MegaETH. Users can deposit approved crypto assets to mint USDm, backed by a transparent and over-collateralized system with chain-specific collateral logic.
On Monad, users can deposit MON, LP tokens, LSTs, and other approved assets to mint USDm.
On MegaETH, only ETH is accepted as collateral to mint USDm. This isolates ETH-denominated debt into its own economic zone while leveraging MegaETH's high-throughput execution environment.
Each vault is uniquely tied to the user and the collateral asset, maintaining isolated and composable debt positions. This design guarantees systemic resilience and efficient liquidity provisioning.
The system is designed to:
Enforce over-collateralization at all times.
Enable modular and chain-specific collateral support.
Support efficient minting, repayment, and redemption flows.
Protect solvency through automated liquidation and oracle-driven vault monitoring.
How Minting Works
1. Collateral Deposit
On Monad: Users deposit supported assets (e.g., MON, LSTs, LP tokens) into vaults. Each deposit is isolated and governed by asset-specific parameters.
On MegaETH: Only ETH can be deposited. The ETH is locked within a vault contract on MegaETH, non-withdrawable unless the corresponding USDm debt is fully repaid.
2. USDm Minting
Users specify how much USDm they wish to mint, subject to the allowable Loan-to-Value (LTV) ratio for their chosen collateral. The protocol determines minting eligibility using:
Real-time collateral prices (via Pyth or ChainSight oracles).
Chain- and asset-specific LTV ratios.
Protocol-level minting constraints or fees.
3. USDm Transfer
Once validated, USDm is minted and sent directly to the user’s wallet. The user now holds spendable USDm while the vault records the outstanding debt. Stability or minting fees may apply based on the collateral and environment.
Example Flows
On Monad:
User deposits 10 MON, valued at $50 each → Total collateral = $500.
LTV for MON = 70%.
Max borrowable = $500 × 0.70 = 350 USDm.
Resulting Collateralization Ratio ≈ 143%.
On MegaETH:
User deposits 2 ETH, valued at $3,000 each → Total collateral = $6,000.
LTV for ETH = 75%.
Max borrowable = $6,000 × 0.75 = 4,500 USDm.
Resulting Collateralization Ratio = 133%.
Vault Architecture
Isolated Risk Pools: Each vault is chain- and asset-specific. Parameters like LTV, liquidation ratio, and oracle source are modular and isolated to prevent contagion.
Composable Integrations: Vaults on Monad can interface with native staking derivatives, liquidity pools, and automated DeFi strategies. MegaETH vaults may be used in high-throughput applications requiring ETH-backed stability.
Upgradable Logic: Vaults are modular and upgradeable under secure multisig governance in early phases, with a roadmap toward permissionless governance through verifiable upgrades.
Minting Constraints
Each vault enforces minimum and maximum collateralization ratios.
Chain-specific constraints are enforced independently: MegaETH vaults are ETH-only, while Monad supports broader asset types.
Protocol-wide debt ceilings or per-asset mint caps may be implemented to limit systemic exposure.
Redemption Process
To withdraw collateral, users must:
Burn USDm: Repay the outstanding USDm balance plus any accrued stability fees.
Withdraw Collateral: The system unlocks and returns the corresponding amount of collateral.
Close Vault (Optional): Once debt is fully cleared, users can fully close the vault and reset their position.
Vault Safety Features
Liquidation Thresholds: Vaults are subject to asset-specific thresholds. Falling below triggers liquidation to preserve solvency.
Oracle Integration: Price feeds update vault health in real time via trusted sources like Pyth Network and ChainSight.
Auto-Healing Vaults (Future Roadmap): Optional support for vaults that auto-recollateralize or repay through integrations with liquidity protocols and automated strategies.
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