The problem
On Mezo, the cheapest loan keeps getting taken back.
Redeeming 1 MUSD pays $1 of BTC minus a 0.75% fee. While MUSD trades below $0.9925, anyone can buy it cheap and redeem it against the weakest loan, and that borrower loses their Bitcoin. MUSD has sat under that line since July.
How it works
A loan that lives outside the redemption system.
Put up BTC, or a veBTC lock.
A veBTC lock keeps its voting power and rewards while it backs your loan, claimed through Keel’s contract.
Take MUSD from savers.
The loan lives in Keel’s own market, not Mezo’s loan book, so no redemption can reach it however cheap MUSD trades.
Your interest pays savers.
It is released to the savings vault over a week. A tenth builds a reserve that takes any loss before savers do.
Pay back any time.
Your collateral comes straight back. Only a deep fall in BTC can liquidate a loan, and any surplus returns to you.
Running now
Run a real loan. No wallet needed.
Keel’s demo wallet locks BTC, borrows MUSD from savers, repays with interest and gets its BTC back. Every step is a transaction you can open.
Both sides, for real
Two savers put in 60 MUSD each.
Each took out 60.0000015.
Three borrowers took 75 MUSD between them, one against a veBTC lock it made, then repaid with interest and got every bit of collateral back. 36 real transactions, start to finish.
See every transaction ↗What keeps savers safe
Built for a weak peg.
- 80% stays liquid
- At most a fifth of savings is ever lent. Withdrawals draw on the rest.
- The rate leans against the peg
- Below $0.995 the borrow rate steps up, a point a week at most, so repaying while MUSD is cheap pays.
- A brake on the wall
- New borrowing pauses when Mezo’s peg pool runs thin. Repaying always stays open.
- Nothing changes overnight
- Risk and rate settings wait a fixed delay, and only the vault’s owner can propose them.
- A keeper that acts
- A daily keeper claims savers’ yield and liquidates unhealthy loans from its own float.
Built for Mezo
Keel implements the vault’s own strategy interface, so the multisig that owns it moves that money in with one call.
vault.setStrategy(keel)Fair questions
Can my Keel loan be redeemed?
No. Redemptions only reach loans in Mezo’s TroveManager. Keel loans live in Keel’s own market.
Then what can go wrong for a borrower?
If BTC falls far enough that your loan passes its limit, it can be liquidated: the collateral is sold at a discount, the loan is paid, and anything left comes back to you.
Doesn’t lending MUSD push its price down?
Borrowed MUSD that is sold adds pressure while a loan is open. A cap, a brake on Mezo’s peg pool and a rate that rises below $0.995 keep it small, and every loan is repaid in MUSD.
Who carries the risk for savers?
Savers do, beyond the reserve. That is why only a fifth can be lent, a tenth of interest builds the reserve, and a sale below the debt pays principal first.
Is this live with real money?
Not yet. It runs on Mezo testnet, and the mainnet integration is proven on a fork with Mezo’s real vault. Mainnet comes next.