Introducing Napier Protocol — Fix Fixed Yield
In the realm of DeFi, fixed yields have gained significant traction, as seen with the rapid growth of Pendle. However, this is just the beginning. With the entrance of more institutional investors and user-facing apps into this market, the demand for fixed yield protocols will undoubtedly become the new holy grail of DeFi, serving as an essential foundation for the next wave of DeFi’s evolution.
At Napier, our mission is to revolutionize this space by creating capital-efficient and risk-isolated yield trading markets. In this article, we will explore our vision and how we plan to shape the world of fixed yield DeFi.
Let’s start by discussing what sets us, Napier Finance, apart.
What is Napier Protocol?
Napier creates capital-efficient and risk-isolated yield trading markets. To appreciate what this means, let’s break down each of the key phrases:
Yield Trading Markets
Decentralized yield trading is not a new concept, with Pendle, APWine (Currently Spectra) and Element (Currently DELV) pioneering this space. However, Napier aims to become the leading yield trading protocol by building upon the core drawbacks of the existing protocols.
Capital Efficient and Risk Isolated
Our pool architecture allows for liquidity to flow between pools efficiently and securely by isolating the risk of all yield bearing tokens to one pool and connecting pools together with bridge assets Napier 3Pool (*The meaning of this word will become clear in the following article).
Capital Efficient : Each market supports only 2 assets, the bridge token Napier 3Pool, and a unique token. This design concentrates liquidity in single pools and allows for a high degree of efficiency.
Risk Isolated : In Napier, the impact of a yield-sourced project being hacked, exploited, or manipulated is mostly isolated to the respective market, not the protocol.
Why Napier
Isolated Pools — e.g. Pendle/Element/APWine
Isolated-pool yield trading protocols like Pendle and Element create a new trading market for each additional pairing. In addition, each project offers its own distinctive minting system for issuing fixed term tokens and a proprietary AMM for trading. This naturally leads to further fragmentation of liquidity, as maturity dates and token standards differ between these projects.
Napier — Shared Pools, But Risk-Isolated
Napier utilizes a pool architecture that is both capital-efficient and risk-isolated. Each yield-bearing token has its own trading market and is paired with the bridge assets Napier 3Pool. This approach ensures that there is only one market for each yield-bearing token, preventing fragmented liquidity and improving protocol efficiency. In contrast, traditional yield trading pair approaches create a new market for each additional pairing. For a more detailed explanation, please refer to our article coming next for more information.
From a technical standpoint, Napier utilizes a nested Automated Market Maker (AMM) architecture. Specifically, it enhances the functionalities of the CurveFactory pool by incorporating the parameter of time, enabling Curve Finance to facilitate trading with fixed-term tokens.
Our paramount objective as a yield derivative protocol is to seamlessly integrate the expansive traditional financial interest rate derivatives market, valued at over 400 trillion dollars, into the Curve Finance ecosystem, thereby ensuring universal access beyond its existing user base.
So What Is Next?
For now, we are heads down building Napier protocol. We want to introduce ourselves and our mission and let everyone know we are hard at work. We applaud the incredible engineering efforts required to make the fixed yield DeFi a reality and we look forward to playing our part to improve it.
To keep up with future updates, follow us on Twitter and Join Discord. See you all soon!
