Detailed explanation of Napier: the end of the CURVE ecosystem

Author: Dewhales Capital Source: Substack Translation: Shan Ouba, Bitchain Vision

1. Introduction

This time we launched new projects related to the Curve ecosystem.We have conducted a comprehensive research on the development of the ecosystem around CURVE.Then it is clear that Curve’s unique mechanism allows us to create a huge and sustainable ecosystem. There are a large number of projects in this huge mechanism, and a large number of projects use Curve to its expected purpose -as a liquidity pool.

With the development of LSDFI and LRTFI, the CURVE ecosystem continued to expand, capturing and introducing new protocols and liquidity.The giant is still unwavering in adversity and transcends competitors confidently.Napier is just a representative of a new wave of projects that cooperate with Curve -based ecosystems and add new functions and mechanisms to it.

2. Napier

Napier is the center of income transaction liquidity created as the expansion of the Curve Finance.Napier chose to build on the basis of the Curve pool to maximize the capital efficiency of income transactions.Napier AMM optimizes fixed term assets and is seamlessly synchronized with the CURVE V2 to increase the momentum.Overall, the protocol is similar to the PENDLE and multi -compound curve pool.

Although the project talks about links with the DEFI protocol since 2020, it is a modern project because it uses the LST and LRT mechanisms (and these mechanisms are closely integrated with CURVE and Convex, because these protocols have surpassed the span of time due to their transcendence time.Design and modified).

Regardless of market conditions, Napier will allow users to always choose the best practice, such as:
-State interest rate:Lock the position of the position and eliminate any uncertainty about future returns.
-E initial income:Napier will allow users to obtain expected income in advance, so that you will immediately get funds that usually take months or years to accumulate.
-Way transaction (points):Income tokens (YT) represent the right to return in the future, allowing users to transaction and speculative interest rate fluctuations (APR), which is similar to the access right to purchase tokens and obtain its price change.(See below for more content)
-Llming provides:Napier’s liquidity provides allows users to earn a drop fee, while reserving your right to accumulate income and various incentives.

Supported assets include WSTTH, RETH and SFRXETH, which are the core and most liquid LST protocols.They are used for multi -asset liquidity pools (Yuanchi, one of which assets with pool transactions with another asset) to maintain the stability of LST and LRT.The more the same types of the same type in the Yuanchi of one party, the lower the risk of decoupling due to the weighted average price.An example of Yuanchi is Sanchi (DAI, USDC, and USDT). In the case of Napier, we get Tript-LSD.Tript-lsdThe asset allocation ratio in the pool is the same as that of Curve 3CRV.

PT is similar to PENDLE tokens and is a fixed period of tokens.

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• YT allows investors to trade expected deposit returns without having to own assets itself.After maturity, YT will lose its value.

• PT allows holders to participate in the future value of basic assets after YT expires.The owner of PT can recover basic assets after the YT period expires.

• YT LP tokens can be used to receive some commissions charged in the mobile fund pool, or other incentive plans that PENDLE (Napier) may provide

• The service life of YT is limited, and it will lose value when it exceeds the deadline, and PT will continue to exist and represent the remaining value of assets.

Therefore, YT and YT LP are more suitable for active investors who are interested in speculative income or generate liquid income.PT is more suitable for investors who have long -term interested in basic assets.Therefore, PT is used for Metapool.

3. Architecture

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Napier Mint

Napier coin system is the first main part of NapierEssenceIt can convert any revenue to the Ethereum into its fixed income equivalent.The end result is that it allows users to split “target assets” (variable income assets) into two independent assets:

1. The main token (PT) is the fixed income equivalent of the asset.

2. Investment tokens (YT), the right of variable income generated by target assets.

Any target assets have a basic asset -it generates income assets.For example, AAI (AAVE) obtains DAI income from DAI basic assets, and RETH (RocketPool) get RETH income from RETH basic assets.In these cases, the foundations are DAI and Reth.A basic target value can be used to cast 1 PT and 1 YT -and these 1 PT and 1 YT can always combine a basic value of returning variable -income target assets.

Napier amm

Napier ammIt is the second part, used to promote basic tokens (PT), income tokens (YT) and corresponding basic assets –Income transactions between basic poolsAnd the LP token and basic assets of the Basic Pond-Transactions between time related to Yuanchi.It is responsible for the operation of Sanchi and Yuanchi.In addition, the Curve Factory pool can be used to promote PT and YT transactions.In Napier Pool, different PTs can be traded directly with basic assets, and different YTs can be traded through lightning swap.

Therefore, in order to understand the Napier pool, we can distinguish between three main types of liquidity pools:

–Basic poolIt is the simplest pool created for two or more regular assets (such as PT and YT) on Curve Finance.An example of the Napier Basic Pond is ETH LSD 3Pool, which contains tokens PT-STTH, PT-Reth, and PT-FRXETH.

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-Napier metapool (time -related metapool):The Napier Pond is a time -related AMM, which is directly connected to the CURVE pool, using nested AMM structures to promote the benefits of various PT, YT and their basic assets.The price changes of regular assets that are expected to date depend on time.Therefore, the establishment of the Napier pool is to offset the loss caused by the time value of the LP tokens of the basic pool.The NAPIER pool is created by the LP tokens of basic assets and basic pools, such as ETH LSD 3POOL (PT-STTH, PT-Reth, PT-FRXETH).
Therefore, in short, this type of pool is very suitable for trading to tokens with increased value as the expiration date (here is usually called PT/YT), and it allows you to use the pool reserve rate and the remaining expiration expiration.Time is to calculate price and marginal interest rates for variables.This is also necessary, because when trading such tokens, once it expires, the price (fixed interest rate) needs to be identified.This requires a wide range of liquidity pools similar to Uniswap V2.

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-CURVE METAPOOL:Metapool is the concept of nested pool structure proposed by Curve Finance, and one token seems to be traded with the other basic pool.Thanks to the Napier Pool, pairing with the basic pool’s LP tokens can list any regular assets on CURVE Finance, such as stablecoin (such as FRAX) or volatility assets (eTH).
For example, we can create a pair of LP tokens of PT-SWETH and Basic Ponds, such as ETH LSD 3Pool (PT-STH, PT-RetH, PT-FRXETH).In this example, users can seamlessly trades PT-SWETH (also known as YT-SWETH) between the three token and basic assets (ETH) in ETH LSD 3Pool.

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However, as the maturity date is approaching and the trading exchange rate is very close to 1: 1., the liquidity is concentrated within a narrower range to maximize the use of liquidity utilization.

In addition, if you trade on other AMMs (such as Uniswap or CURVE) without time parameters, non -permanent losses will accumulate over time.This will make the funds of the protective liquidity provider from being relieved of the impact of arbitrage transactions.

What does this structure eventually bring to the user:

• Capital efficiency: Each market only supports 2 assets: Napier 3Pool Bridge and Unique Big.This design focuses liquidity in a separate pool and provides high efficiency.

• Isolated risk: In Napier, the impact of hackers attacking, utilization or manipulation of income projects is mainly limited to related markets rather than protocols.

The combination of all these mechanisms makes Fhlyweel’s operational possible.This is mainly implemented by guiding program Llama Race (more information about more information, see the “partnership” section).Mainly in Point Casinos, the project will rely on Point Casinos to create a preliminary currency flywheel.Point is the starting point of the project.The more points the user provides in Point Casinos, the more transactions brought by the project, which brings additional Napier points.This means that the project that has been available can use POINT CASINO to create a point flywheel.

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4. Partnership

To achieve this goal, Napier launched the LLAMA RACE program, which is a gamified points competition designed to highlight users’ contributions to Napier and CURVE ecosystems.LLAMA Quest consists of five chapters, reflecting the course of Napier to make Curve the LST/LRT home again.In addition, LLAMA RACE also connects a large number of protocols:

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In addition, Napier seems to be closely related to the following projects:

• Prisma Finance-PRISMA allows users to issue a stable currency (Acusd) supported by LST.Compared with the stablecoin provided by other LSDFI protocols, the significant feature of this stablecoin is that it will be motivated by CURVE and Convex Finance.This creates a economic cycle. In addition to getting Ethereum pledges, users can also earn CRV, CVX and PRISMA transactions and rewards through other complex mechanisms.

• CURVE-CURVE is an AMM Dex, and its main competitor is Uniswap.The most important difference is that CURVE is positioned as a DEX with low volatility assets (stabilized currency and packaging/synthetic assets (SBTC, RenbTC or WBTC)), which is why Curve’s slide point is the least -because the price of stable currency is considered to be available.Prediction.This is why Curve’s TVL has been higher than or close to Uniswap TVL. Although Uniswap supports multiple assets, CURVE mainly supports limited assets -because the stability of the Curve platform has attracted liquidity providers, they are looking for a security provider.The place to store their stablecoin and packaging assets, where they will be free of risk of sliding points and impermanence.You canOur separate articlesRead more information about Curve’s working principle.

• Convex-It can be regarded as its brother, which enables Curve users to obtain liquidity unlimitedly.Convex will also integrate VENPR to provide instant fluidity for NPR holders and optimize Napier returns for LP.

• Yearn-1arn is still an important part of the Curve ecosystem.Yearn is an automated DEFI income polymer platform that can automatically calculate the user’s reward.Without Yearn Finance, investors will need to manually transfer their liquidity to the highest income agreement.

• Dinero (former RedaCted Carter)-Redacted is a company that provides network liquidity, management and cash flow for the DEFI protocol.They have created a number of products involved in the Curve ecosystem -Redacted Protocol, Pirex and Hidden Hand.You can read more information about these protocols in Curve Finance.

• Euler finance-Euler Finance is a decentralized finance loan platform. Its main advantage is that the asset is not authorized to go public.It allows users to decide which tokens on the market and create a lending market, as long as these tokens have WETH transactions on the UNISWAP V3.

• FRAX Finance-Fenately, Frax Finance is a decentralized cross -chain agreement designed to create a scalable digital currency with flexible supply, algorithm support (AMO) and mortgage.It issues tokens linked to assets, such as FRAX, SFRAX and FRXETH

• Aave-It is a decentralized non -hosting liquidity market agreement, and users can participate as suppliers or borrowers.Suppliers provide liquidity to the market to earn passive income, and borrowers can borrow with excess mortgage (permanent) or insufficient mortgage (single liquidity).

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5. Conclusion

Napier proposes the next stage of the evolution of the Curve ecosystem, aiming to make Curve a home of LST/LRT.The mechanism introduced by Napier may trigger a new round of CURVE war and may evolve into a comprehensive LSDFI war.Last year, we thoroughly analyzed the Curve ecosystem to understand the possible situation of the LSDFI war. At that time, various LSDFI projects promoted the progress of war.Unfortunately, due to the characteristics of the CDP protocol supported by LST and the return on the return on the promised by the re -pledged agreement, this statement soon disappeared.

Napier adopted a different method: Napier is not re -inventing the wheels, but trying to attract the project to participate in the simple dual asset pool on Uniswap or Curve by providing simple bribes.mechanism.During the camel race, these innovations continued to change from the hat to a new rabbit, which aims to strengthen Napier’s flywheel.Which rabbit will the wizard change next?