About Enzyme Finance (MLN)

Enzyme Finance is a decentralized asset management infrastructure built on Ethereum. The platform has a native token, MLN, used to facilitate governance and pay for various functionalities across the network.

According to Messari, Enzyme’s non-custodial, blockchain-based services allow users to create their own bespoke investment vehicles. As a decentralized platform, all funds held within these vehicles are managed by a series of smart contracts – as opposed to centralized intermediates – that work to dictate the terms of each fund situated on the protocol.

Within the Enzyme ecosystem, individual investment vehicles/funds (or “Smart Vaults”) are configured by either an independent yield seeker or DAO who assumes the role of Vault Manager.As noted, these Smart Vaults are fully customizable and can be built with their own fee structure (i.e., management and performance fees), asset universe, access controls and risk management procedures. 

Likewise, independent Smart Vaults leverage Enzyme’s various DeFi integrations to pursue unique yield producing strategies. Per Messari, individual vault managers can generate yield though various mediums including lending/borrowing platforms and decentralized exchanges. Managers can also devise their own custom index funds to gain exposure to certain sectors of the digital asset market. To date, Enzyme is integrated with a series of leading DeFi protocols including AAVE, Compound, Uniswap, and Curve. 

Per project documentation, the funds contained within each public Smart Vault are sourced from Enzyme’s decentralized users who have the opportunity to earn an annual yield should the strategy employed by the fund prove successful. Those who deposit funds into a platform-supported vault are also said to earn tradable vault shares tracking their ownership in the fund.

Private Smart Vaults on the other hand typically adhere to an “allowed depositors” list that sets limits on the type/number of users allowed to invest in each pool. All Smart Vaults, no matter their configuration, possess live auditing capabilities (provided by The Graph) that allow depositors to track their funds’ performance as well as any associated fees.

As of early August 2022, Enzyme supports over 1,500 unique vaults across both the Ethereum network and Polygon, a layer-2 scaling solution.

When was MLN created and how much was it worth?

Originally known as Mellon Protocol, Enzyme Finance is the brainchild of former Goldman Sachs VP Mona El Isa and mathematician Rito Trinkler who first launched the protocol in July of 2016. Six months later in February of 2017, Enzyme issued its native utility token MLN at a price of $5.83, raising roughly $2.9 billion in the process.

In 2019 Melonport, the Swiss-based development firm behind Melon Protocol, dissolved and granted its managerial responsibilities to the Melon Council, a decentralized autonomous organization (DAO) that now dictates all changes/alterations to the protocol.

Melon was officially rebranded to Enzyme Finance in December of 2020.

Pricing data from CoinGecko demonstrates that MLN experienced ample volatility over its first 11-months of existence before making a near parabolic move up to an ATH of $258.26 in January of 2018. Following a substantial dip and 2-year consolidation, the token once again found momentum, alongside the broader digital asset market, in late 2020 and over the first three quarters of 2021. Despite this rally, MLN’s price once again fell in September of 2021 and has since failed to recover. As of early August 2022, the token was swapping hands for just $26.66.

How is the price of MLN determined?

According to Messari, MLN is an inflationary asset with no hard cap. Some 300,600 MLN tokens are set to be released in the form of ecosystem grants and tokenized rewards to various platform stakeholders. A total of 1.25 million tokens were released during MLN’s initial distribution in February of 2017.

Despite its inflationary nature, MLN does adhere to a buy/burn model which actively works to remove portions of MLNs supply from circulation. Within this framework, the platform actively converts its ETH-denominated gas fees into MLN tokens which are subsequently burned and removed from circulating supply.  Likewise, MLN tokens are destroyed each time a new vault is configured on the network. 

As of early August 2022, there were 1.45 million MLN tokens in circulation.

Why does MLN have value?

“Enzyme is a best-in-class infrastructure for asset managers,” said Unslashed CEO Marouane Hajj.

Indeed, the project has been billed as a “true disruption” to the asset management space.

But Enzyme has to deliver on its promise of industry disruption. If it gains some traction, the native asset would, in theory, rise in demand.

Is MLN secure?

According to project documentation, Enzyme’s various smart contract implementations have been reviewed by a number of leading on-chain auditors including ChainSecurity and OpenZepplin. Moreover, the network is situated atop the Ethereum ledger which uses Proof-of-Work (PoW) – and soon to be Proof-of-Stake (PoS) – consensus to confirm and validate new transactions.

As a non-custodial service, Enzyme also ensures depositors always maintain full control of their private keys.

What are the main benefits of MLN?

• Enzyme Finance is a decentralized asset management platform that allows users to create custom vaults equipped with their own fee structures, asset universes and risk management procedures. 
• Enzyme is a non-custodial platform meaning users maintain control of their private keys throughout the entire investment process.
• Enzyme is currently integrated with a number of leading DeFi platforms – AAVE and Uniswap, to name two – on which funds can implement their own bespoke investment strategies.

What do critics say about MLN?

That MLN has failed to reclaim its 2018 highs despite a huge influx of new DeFi users over the past two years. DeFi Llama notes how Enzyme’s TVL has fallen nearly 80% over the past over the past five months.