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MUSD is available on Mezo Mainnet and available for testing on Mezo Testnet. This guide shows you how to complete the borrow process using Mezo Testnet as an example or as a way to borrow and mint MUSD for development purposes. Later, go to the Mezo App and sign in on Mainnet to borrow and mint real MUSD.
The minimum loan size is 1,800 MUSD of borrowed debt. With the 200 MUSD gas deposit, your total debt at opening is at least 2,000 MUSD. This is a minimum borrow amount, not a collateral floor — the collateral you need depends on your desired collateral ratio.

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Before You Begin

Before you can get testnet MUSD, you must complete the following steps:

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Borrow and Mint MUSD

After you sign in to mezo.org on an account with testnet BTC, you can borrow MUSD.
1

Navigate to the Borrow Page

In your browser, open mezo.org/feature/borrow.
2

Start the Borrow Process

Click the Let’s Go button to start the borrow process.
3

Specify Loan Details

Specify the amount of MUSD you want to borrow and the amount of BTC you want to use as collateral.
The interface will show you your collateralization ratio in real-time. Aim for at least 150% to maintain a healthy buffer against market volatility.
4

Review Your Loan

Click Review to open the summary before you confirm. Check the summary details to confirm the information is as you expect, including:
  • Borrow amount
  • Collateral amount
  • Interest rate (fixed 1-5%)
  • Collateralization ratio
  • Total fees
5

Confirm Network

Ensure that your browser wallet is actively set to Mezo Testnet.
6

Submit Transaction

When you are ready to proceed with the borrow and mint process, click Confirm. Your browser wallet prompts you to confirm the transaction and pay the gas fees using BTC on Testnet.
After the process is complete, you can check the loan status on mezo.org/feature/borrow.

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Understand the Borrowing Terms

Mezo offers a fixed, low-interest rate for MUSD loans. Initial rates range from 1-5%. There is no forced repayment date on Mezo, so you can keep your position open as long as you want, provided your collateral remains sufficient.
While there’s no fixed repayment schedule, you still need to watch for liquidation risks if the value of your collateral (BTC) falls. Interest accrues on the borrowed amount (the minted MUSD), so be mindful of how your debt grows over time. When you’re ready to close your position, you’ll need enough MUSD to cover your principal plus any accrued interest or fees.

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Key Terms to Remember

  • Fixed Interest Rate: Your rate is locked when you open your loan and never changes (unless you refinance)
  • Minimum Collateral Ratio: 110% to avoid liquidation
  • Recommended Ratio: 150% or higher for safety
  • Minimum Loan Size: 1,800 MUSD
  • Gas Deposit: 200 MUSD (refunded when you close your loan)

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Manage Your Loan

Once you have an active loan, you should monitor it regularly to ensure your collateral ratio stays above 110%. If your ratio falls below this threshold, your position can be liquidated.
You can manage your loan through the Mezo App:
  • Add Collateral: Increase your BTC collateral to improve your ratio
  • Repay Debt: Pay back some or all of your MUSD to reduce your debt
  • Close Position: Repay your full debt plus interest to get your BTC back
  • Refinance: Adjust your loan to a new interest rate (0.1% fee applies)
For more information about liquidation risks and how to protect your position, see Liquidations & Redemptions.

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