A liquid staking derivatives protocol built on Move
MNI Finance is at the forefront of StakeFi protocols established in the SUI ecosystem. MNI is primarily a decentralized DeFi application providing liquid $SUI staking services but also a platform to aggregate resources and achieves protocol-owned revenue sharing.
The latter makes the project somewhat unique and aligned with existing trends within DeFi.
MNI contract developed by the MOVE language and deployed in SUI, shares and benefits from the same PoS mechanism and security as SUI. As a result, MNI Finance hopes to empower the SUI staking ecosystem by leveraging several advantages offered by Liquid-staking:
The systemic risk of yield staking in DeFi is mainly caused by base layer protocol failures or extreme market fluctuations entailing collateral assets’ bank-run liquidation. However, liquid-staked assets are backed by the PoS network itself. This means that even whilst staking and if any DeFi project were to fail, users could still rely on the base yield coming from PoS networks.
In order to retain a competitive staking income and liquidity, liquid-staking protocols usually automatically select reliable validators that don’t have any slashing history and have the highest uptime. This makes the user’s staking journey extremely simple.
The strength of the PoS network is directly proportional to the number of validators and the amount of capital they have staked within the network. If the limitations around staking — such as lock-up periods — are removed, more users can be incentivized to stake their capital. As the number of validators on the network increases, the amount of staked capital increases, and the network becomes even stronger as the staked capital increases.
Why Liquid-Staked with MNI Finance?
The platform enables users to stake $SUI via the MNI contract and to mint a representation token $mSUI or $fSUI you can choose (with different revenue features, which will be explained in the following sections). In other words, a new transferable, tradable asset represents the liquidity of staked $SUI, allowing for a wider opportunity set within multiple DeFi scenarios whilst in the staking period.
The MNI system requires collateralization of 100% staked $SUI. For example, if you want to mint 100 staked $SUI liquid derivatives, you must deposit 100 $SUI as collateral. However, the collateral has no liquidation risk because its underlying is staked to the SUI network; a user can always initiate the redemption.
What is $mSUI and $fSUI?
The main products of the MNI protocol are $mSUI and $fSUI. Both are both representations of staked $SUI; each $mSUI or $fSUI is fully backed by staked $SUI, however, differ in their staking reward computation.
$mSUI: its underlying is staked $SUI, but it’s staking reward appreciates and is reflected in the price of $mSUI. In other words, the switching ratio between $SUI and $mSUI is not a stable 1:1 ratio, as staking time increases, the staked $SUI rewards are accumulated in the MNI protocol, and the total $SUI volume increases more than the minted $mSUI. As a result, each $mSUI can be redeemed for more than 1 $SUI token, which includes its underlying $SUI staking reward.
$fSUI: its underlying is staked $SUI, but its staking reward is settled by MNI protocol’s native Token: $MNI. In contract, $fSUI is not transferrable, but it can be converted with $mSUI (no discount), which means you can still easily transfer or sell it but just convert it to $mSUI.
Although $mSUI and $fSUI are both fully backed by staked $SUI, $fSUI users can receive more rewards than $mSUI, because protocol only takes half of commission from $fSUI than $mSUI, which is part of the significant design that increases the loyalty of $SUI holders, protocol buying back $SUI rewards to $MNI token.