Gm Linea Fam,

We hope you have been having fun on this journey to learn about decentralized finance (DeFi) with us through the Linea DeFi Voyage. As part of Wave 4, focused on lending and borrowing, today we spotlight Mendi Finance, a native lending protocol on Linea.

Mendi is a real-yield protocol where all the protocol revenue is distributed to the stakers. What sets Mendi apart is its unique flywheel mechanism, built with its partner ve33 DEX, Velocore.

Understanding Mendi’s Model

Mendi caters deep liquidity money markets across all the major blue-chip assets. This includes major stablescoins such as USDC, USDT, DAI, as well as Ethereum, Lido staked Ethereum, and wrapped BTC.

The lending protocol operates on an overcollateralized premise, meaning users can only borrow less than the value of their collateral, steering clear from potential liquidation issues. Users need to be careful not to go over their borrow limit, else they risk liquidation.

DeFi users can unlock tremendous earning potential from their assets with lending protocols. By supplying assets to the protocol, they can earn an interest rate derived from the revenue generated by borrowers. Furthermore, users can gain additional leverage by borrowing assets against their collateral and exercise complete freedom in their use across different protocols in DeFi, within the lending protocol or anywhere else.

To further incentivize lending and borrowing within the protocol and bootstrap liquidity, Mendi employs the Mendi token.

With a solid security model, audited by ScaleBit and protected by decentralized oracles like Pyth and Chainlink for its price, Mendi positions itself as a safe choice in the DeFi ecosystem.

Tokenomics and Community

At the core of Mendi’s framework is unique tokenomics, in which 100% of the protocol revenue is distributed as rewards to the Mendi stakers. Mendi stakers have the flexibility to receive protocol revenue in either USDC or MENDI tokens, providing a substantive financial instrument to realize real yield on your investments.

Mendi prioritizes a community-first approach by ensuring a smooth community experience and laying the groundwork for an effortless transition to a DAO as governance decentralizes in the coming months.

Usability and Expansion

Mendi’s user-friendly cross-chain deposit function facilitates the onboarding of users from different chains. Created with the Squid SDK and secured by  Axelar Network, it enables deposits from any chain with any asset into the Mendi lending pools.

Mendi is paying it forward to early contributors by distributing Mendi Loyalty Points. This soulbound ERC-20, like the Linea Voyage XP, will be used to distribute future rewards fairly, favoring early contributors.

Why Linea?

Mendi chose to deploy on Linea because we recognize it as the zkRollup with one of the highest potential ceilings. Consensys’ excellent record of building in the Ethereum ecosystem, and Linea’s strong focus on developers’ needs and consistent engagement with their community for future developments, offered a unique opportunity for reciprocal growth and feedback. In return, Mendi provides a secure money market to Linea and helps increase the liveliness of the ecosystem. The Mendi model encourages high utilization increasing capital efficiency.

Mendi also provides an easy onboarding experience with its cross-chain functionality to the new users of the ecosystem. Already forming an expansive network within Linea, Mendi is observing great projects building on top of their lending pools including,  Chimp Exchange, Deri Protocol, and Overnight.fi. This early-stage feedback validates Mendi’s integral role in building a public good within the Linea ecosystem.

What Lies Ahead?

So far, Linea has been an excellent platform for Mendi that provides outstanding support on both product and ecosystem fronts. The team proactively gathers feedback for product development or different campaigns and initiatives.

The upcoming Deneb-Cancun upgrade is expected to introduce a significant reduction in gas fees on the network, which will make Linea one of the most competitive rollups on the market.

Stay tuned for more innovative solutions from Mendi Finance! Follow us on Twitter. Keep up with the latest on Linea and the DeFi Voyage on Mirror, Twitter, and Lens. Check out our developer portal and technical documentation to get started on the L2 network.