KUMA Protocol by Mimo: NFTs and Interest-Bearing Tokens backed by bonds
We’re thrilled to announce that Mimo Labs is launching the “KUMA Protocol”: the first DeFi protocol issuing tokens backed by regulated NFTs, themselves backed by sovereign bonds. This launch comes as the FMA (Financial Market Authority Liechtenstein) has approved Mimo Capital AG for issuing such tokens.
The launch of the KUMA Protocol represents a significant milestone for Mimo and the entire DeFi space by becoming the first and only protocol issuing interest-bearing tokens backed by traditional fixed-income products. The KUMA Protocol brings a new investment option for investors looking for diversification outside traditional crypto assets while remaining on-chain. Diversification is critical in the current economic environment with a bear market and a looming recession.
Mimo Capital AG, a regulated entity
Mimo has been working behind the scenes with government officials, industry experts, and regulators across different jurisdictions for the past two years to ensure that the development of new financial products complies with all applicable laws and regulations.
The dedication to working with regulators has finally paid off. Mimo now has the rights and the legal framework to provide the blockchain market with a new financial product accessible to investors worldwide, thus opening new opportunities in the blockchain industry.
To date, a few other efforts of bond tokenization have started. However, Mimo has the advantage of being the first regulated in the European Economic Area (EEA) behind a mixed CeFi and DeFi setup.
How does it work?
Mimo has designed the KUMA Protocol and tokens to be more user-friendly than traditional bonds. Unlike the latter, which can be difficult for business & retail investors to understand and access, the KUMA Interest Bearing Tokens can be easily bought and sold on any decentralized application, making them accessible to a broader range of users. Furthermore, because the KUMA Protocol uses blockchain technology, the entire process of issuing the tokens is audited, transparent and secure.
The KUMA protocol results from the work of two distinct organizations: Mimo Labs and the newly founded Kuma DAO. Mimo Capital AG tokenizes bonds using NFT technology, while the KUMA protocol is a decentralized entity governed by MIMO tokenholders that leverages these bond tokens and issues KUMA Interest Bearing Tokens: smaller denominations of bonds into interest-bearing tokens backed by KUMA NFTs. These tokens behave loosely similarly to stablecoins whose balance increases automatically. You can see the difference between the two types of tokens in the graph below.
Mimo Capital AG initially selected sovereign bonds from countries with strong credit ratings and traditionally considered safe assets. While this setup exposes users to the underlying sovereign bond’s credit and interest rate risks, it provides more transparency and utility as the KUMA tokens follow blockchain standards.
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 4 hours by default, providing a more consistent income stream for investors while not involving any claim process.
So far, all of the Mimo partners, including Fantom, Swissborg, SingularityDAO and Akt.io have indicated their intention to use KUMA.
It will be exciting to see how the market will react and if investors will accept the KUMA tokens as a new class of assets.
The newly founded KUMA DAO
Info about the KUMA protocol:
- Governance Model: DAO
- Governance Token: MIMO
- Management: KUMA Governance Forum
- Website: https://kuma.bond
- Twitter: https://twitter.com/KumaProtocol
- Forum: https://kuma.discourse.group/
- Snapshot: https://snapshot.org/#/kumaprotocol.eth
- Kuma Multisig: https://app.safe.global/eth:0xB5502747AABDCa21E832951b4caaF739dA33f450/home (or kumaprotocol.eth)
- Alternative ENS: 🐻🪙📈.eth
You can find the Mimo DAO Forum Discussion here.
How to get started?
Please contact our team at kuma@mimo.capital, and they will share the next steps.
