Introducing New Feature — Incentivized Borrow Pools
New Feature on NAVI — Incentivized Borrow Pools
Currently, users are able to get high APY with boosted incentives by supplying liquidity to the NAVI protocol. These incentives provide NAVI users with a significant upside to continue providing liquidity to the protocol and the Sui ecosystem.
To advance the DeFi interoperability and composability even further, NAVI is introducing incentivized borrow pools. This innovative feature will reward users for borrowing tokens from its liquidity pools, effectively reducing borrowing costs and promoting the circulation of funds within the Sui ecosystem.
What are Incentivized Borrow Pools?
Incentivized Borrow Pools on NAVI reward users borrowing assets with boosted APY. More precisely, these incentives allow users to:
🔹 Start accumulating yields for borrowing
🔹 Reduce their interest rates when borrowing assets on NAVI
In short, users providing liquidity are able to borrow assets to remain liquid within the Sui DeFi ecosystem and get rewarded for it.
The logic behind Incentivized Borrow Pools
NAVI’s previous significant update introduced a new incentive calculation formula for incentivized lending pools. This solution aims at reducing supply looping and stabilizing the liquidity protocol even further. More information about this can be found in our previous medium post.
Incentivized Borrow Pools will work in the same way and apply the following formula:
Borrow： Your borrow- Bcoefficient*Your supply
🔹 The amount of rewards relates linearly to the formula above and only applies when the number is positive.
🔹The Bcoefficient value will be between 0 and 1. The NAVI team will evaluate the users’ behavior and adjust this value responsibly. Any upcoming adjustment of this coefficient will be notified and shared with the community ahead of the change.
Incentivized Borrow Pools also aim to reward users for borrowing from pure liquidity instead of looped liquidity. As a result, the APY from supplying liquidity + borrowing should be higher than any type of supply looping.
Finally, the NAVI team believes this update will stabilize the lending protocol even further and reward users who utilize it to its full extent.
In Conclusion
The NAVI team is committed to providing our community with the most stable, secure, and efficient liquidity protocol on Sui. We are a community-first project with a simple goal to offer a DeFi liquidity protocol that is equally fair to existing liquidity providers and open to new users.
Our goal remains to provide the community with the most secure and easy-to-use lending product available on the market.
The addition of Incentivized Borrow Pools will result in a more stable protocol that provides fair incentives to everyone, whether they supply or borrow assets from NAVI.
