# Use Cases Within the Ecosystem

Midgard’s ecosystem envisions multiple ways for participants—both human and AI agents—to derive value from MID. While the ultimate goal is a fully autonomous AI-driven banking layer, there are intermediate and parallel use cases involving staking rewards from the treasury, tapping into interest-bearing stable assets, and accessing various forms of tokenized returns (FT) from synthetic assets.

Below are three core categories illustrating the short-term and long-term roles MID plays.

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### 1. The AI-Driven Banking Scenario (Long-Term Vision)

**Concept:** Over time, as more sophisticated AI agents enter the ecosystem, MID becomes the foundation of a fully autonomous, AI-to-AI financial network—essentially an “AI bank.” In this scenario, AI agents can:

* **Grant Loans to Other AI Agents:**\
  Lend MID to agents needing capital for certain tasks, managed purely by AI-driven credit assessments.
* **Issue AI-Curated Bonds:**\
  Agents can create fixed-income instruments, with interest rates dynamically set by AI models to reflect true risk.
* **Act as Underwriters and Insurers:**\
  Certain agents specialize in risk mitigation, offering insurance policies in MID or structuring liquidity pools for AI-run capital markets.

In this final stage, MID is not just a token; it is the unit of account and store of value that underpins an entirely autonomous economy. Agents earn, borrow, lend, insure, and invest—without direct human intervention—fostering a highly efficient and adaptive economic environment “by AI, for AI.”

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### 2. Staking and Treasury-Derived Rewards

**Concept:** Before reaching the fully autonomous banking layer, there are tangible benefits available to participants via staking. By committing their MID tokens for a certain period, users (human or AI) gain rewards distributed from the treasury’s managed assets. AI agents ensure that:

* **Controlled APY (Annual Percentage Yield):**\
  Staking rewards in MID are carefully adjusted by AI, who monitor market conditions, ensuring yields reflect sustainable growth. This prevents runaway inflation.
* **Stability Through Tangible Backing:**\
  Since the treasury holds real assets (DAI, USDC, and even interest-bearing stablecoins), the staking rewards have a solid backing. Stakers are not receiving empty promises but tokens supported by genuine asset value.
* **Long-Term Participation Incentives:**\
  By offering stable rewards, staking encourages holders to keep their MID off the market, promoting price stability and reducing speculative volatility.

Examples:

* A user stakes 1,000 MID and, over time, receives additional MID tokens as rewards. If bonding premiums have accumulated in the treasury, these stakers benefit indirectly from the improved asset backing, potentially seeing MID trade at or above $1.
* AI agents can increase APY slightly if demand for MID is low, incentivizing users to stake and thus stabilizing price dynamics.

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### 3. Earning from Interest-Bearing Stable Assets and Synthetic Tokens (FT)

**Concept:** The treasury may integrate with interest-bearing stablecoins (e.g., sUSDe, USDY) or other synthetic assets that generate yield over time. By holding these assets, the treasury gains additional income, which can be funneled back into the ecosystem to support MID’s value and offer new forms of fungible tokens (FT) as returns.

Potential Uses:

* **Accessing Interest-Bearing Stablecoins:**\
  MID holders or stakers might gain exposure to yields from these stable assets. Instead of simply holding DAI, the treasury invests in sUSDe or USDY to earn interest. Over time, this interest can be used to fund staking rewards, enhance market interventions, or provide stable dividends to certain MID holders.
* **Synthetic Asset-Derived FT:**\
  The protocol could introduce synthetic tokens representing claimable yields or tokenized streams of income. MID holders might exchange or stake their MID to receive these FT as a form of “dividend” distribution backed by the interest the treasury earns.

Examples:

* Suppose the treasury holds sUSDe, generating a steady 2% annual yield. AI agents direct a portion of that yield towards creating a fungible token (FT) that holders can claim if they meet certain staking criteria. This effectively transforms the treasury’s yield into a tangible reward for long-term participants.
* As new synthetic financial products emerge, MID’s stability and backing allow the system to confidently issue FT tokens representing future earnings or credits, all managed programmatically by AI logic.

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In all these layers— from the initial, straightforward staking and bonding rewards to complex AI-run financial instruments—MID remains at the heart of a stable, asset-backed ecosystem. The interplay of tangible collateral, AI-driven parameter adjustments, and incremental premium accumulation enables MID’s continuous growth and adaptation to an evolving digital economy.
