Vaduz, Liechtenstein, Jan. 13, 2023 – Decentralized finance (DeFi) innovator Mimo is launching “KUMA Protocol” — the first DeFi protocol issuing tokens backed by regulated nonfungible tokens (NFTs) — themselves supported by sovereign bonds. This launch comes as the Financial Market Authority of Liechtenstein approved Mimo for providing blockchain-related services from January 2023.
KUMA tokens are built as a smart contract compatible with most blockchains and are designed to provide holders with a reliable source of passive income through the accrual of interest on their holdings.
KUMA tokens are NFTs representing bonds that KUMA Generator (a decentralized product owned by KUMA DAO and governed by the Mimo Governance Token (MIMO) holders) can accept as a backing to issue KUMA interest-bearing tokens, which are a form of synthetic stablecoins that automatically accrue interest. The balance of these tokens grows in users’ wallets without any action required, matching the interest rate paid by the bond backing them, minus commission. Apart from the interest, the tokens behave like regular stablecoins, allowing them to be integrated freely into the broader crypto ecosystem in sectors such as DeFi, GameFi and NFTs.
The launch of this protocol also has the potential to revolutionize the way bondholders receive interest. Traditional bonds typically pay out interest semi-annually, annually, or even when reaching maturation. However, because KUMA interest-bearing tokens use smart contracts, interest can be paid out to holders regularly (every four hours by default), providing investors with a more consistent income stream while not involving any claim process.
In the background, Mimo Capital AG handles the bonds and offers simple redemption to the users. Moreover, a smart contract managed by the KUMA DAO provides infrastructure for its community to swap or roll over the NFT bonds, ensuring smooth operation when a bond reaches its maturity date or the issuing authority publishes an updated rate.
While other efforts of bond tokenization have started, Mimo has the advantage of being the first to be regulated in the European Economic Area. Mimo provides tokens allowing its users to earn interest while benefiting from the safety of their favorite custody solution, with peace of mind coming from a fully regulatory-compliant product.
Furthermore, KUMA DAO’s approach provides fractionalized access to the benefits of bonds, lowering the entry barrier to investment and opening the door to 24/7 settlement, trading and global liquidity. Examples of applications include savings accounts, protocol treasuries and individual wallets.
Following the tokenization of sovereign bonds, Mimo will leverage KUMA to provide other assets, such as corporate debt and funds.
So far, each of Mimo’s partners, including Polygon, Fantom, Swissborg, SingularityDAO and Akt.io, have indicated their intention to use KUMA.
Claude Eguienta, founder and CEO of Mimo Capital, said:
“We are thrilled to offer our users a new way to earn passive income through tokenized bonds. With this innovative mechanism and backed by a diverse range of real-world assets, we believe that interest-bearing tokens are poised to become a leading tool in the decentralized finance space.”
Mimo is a leading blockchain company that built a multichain DeFi protocol providing a decentralized and multichain euro stablecoin and developing blockchain-powered financial products. With a focus on user-friendliness and accessibility, Mimo is committed to bringing the benefits of decentralized finance to a broader audience, including business and retail investors.
Name: Yacine Farouk, chief marketing officer