Introducing Novum Finance — a new liquid platformprotocol built on Eigenlayer
DeFi operates at breakneck speed, perpetually driving innovation to unprecedented levels. Within this dynamic landscape emerges a narrative that unveils Ethereum’s next significant DeFi endeavor — Liquid Restaking.
Novum Finance stands at the forefront, poised to revolutionize the landscape of liquidity, DeFi accessibility, and enhanced rewards for restaked assets. Central to this initiative is the creation of a unified liquid restaking token, novETH, tailored for accepted LSTs and Ethereum.
Before delving into the mechanics of Novum Finance’s approach, let’s first grasp the concept of restaking.
What is Staking? What is Restaking?
Staking plays a crucial role in securing a Proof-of-Stake blockchain. Validators on the network can stake a certain amount of the blockchain’s native token to support network security and earn a passive income (yield).
So that was staking. But what is restaking?
Restaking allows previously staked assets to be staked again on a different platform or program, enhancing the asset’s utility and potential for rewards. This process enables staked assets to be leveraged by other decentralized protocols, offering additional reward opportunities for validators/operators.
EigenLayer takes Proof-of-Stake a step further by allowing users to “restake” assets to secure any number of additional Actively Validated Services (AVS). Like native staking, funds restaked to an AVS will act as collateral for their validation process, be subject to slashing, and generate additional rewards.
What is Eigenlayer?
Eigenlayer makes it easy for innovators to collaborate with Ethereum’s stakers and node operators. It enables multiple parties who do not trust each other to work together and create something meaningful. Eigenlayer essentially grants a simple way to utilize Ethereum’s ‘decentralized trust’ module, which promotes open innovation. This eliminates the need for protocols to develop their validator set and allows them to access Ethereum’s computing and financial resources easily.
EigenLayer has 4 main components in the ecosystem:
- Actively Validated Services (AVS): AVS in Eigenlayer are decentralized services that will inherit Ethereum’s security via EigenLayer. These services can support various networks, like sidechains, data layers, and more. Eigenlayer enhances security by using Ethereum’s pooled resources for activities such as middleware services, block building and transaction ordering, opening doors for innovation in areas like MEV and PBS.
- Ethereum Stakers: Ethereum stakers in Eigenlayer can secure multiple networks by restaking their ETH. This means they can use their existing capital to support multiple networks through smart contracts. While this offers additional yields, it also poses a risk of slashing if stakers fail to meet the conditions set by the services they choose to support.
- Node Operators: Node operators in Eigenlayer provide computational resources to securely run various services, including decentralized applications (DA), oracles, and bridges. These operators have the freedom to choose the services they work for and implement the recommendations provided by the AVS.
- Eigenlayer Protocol: The Eigenlayer protocol consists of Ethereum smart contracts that facilitate trustless collaboration between stakers, node operators, and services. These contracts allow users to restake their assets, delegate them to node operators, and interact with on-chain service modules. Service modules have preset conditions for rewards and slashing to ensure smooth interactions between operators and services.
Now wait a minute, what opportunities does restaking offer?
It presents a multitude of advantages across different participant segments:
- Economic security for protocols in need
- Facilitated bootstrapping for protocols (no need to build their own blockchain)
- Enhanced capital efficiency and rewards for stakers
However, alongside these opportunities come challenges that demand attention:
- Complex reward structures
- High gas fees
- Identification of suitable node operators on Eigenlayer
- Opportunity cost associated with choosing between restaking and other DeFi opportunities
- Liquidity limitations
What is novETH ? How does novETH tackle these challenges?
Novum’s goal is to remove the complexity associated with restaking and faciliate access to the best restaking strategies while allowing stakers to remain liquid. To allow that, we have created novETH.
novETH serves as a single liquid restaking token, mintable against accepted LSTs/ETH collateralized on EigenLayer. This innovative tokenization facilitates fractional ownership of staked assets, streamlines access to both restaking and DeFi opportunities, and leverages composability within the DeFi ecosystem. Moreover, it addresses concerns regarding complex reward structures and high gas fees.
- novETH is a reward-bearing token that works similarly to cTokens. The underlying rewards accrued by restaking positions are reflected in the price of novETH over time as it increases in value.
- novETH can be minted using any of the supported assets at https://novumfinance.xyz/. Users deposit native ETH or LSTs and receive novETH.
By converting staked ETH into novETH, users earn three level of rewards:
- ETH/LST staking yield
- EigenLayer points
- Novum Points while remaining liquid
How does Novum Finance work? It’s very easy.
- Restakers stake their LST to mint novETH tokens indicating fractional ownership of the underlying assets.
- novETH contracts distribute the deposited tokens into Node Operators on Eigenlayer
- Rewards accrue from the various services to the novETH contracts. The price of novETH token assumes the underlying price of the various rewards and staked tokens
- Restakers can swap their novETH tokens for other tokens on AMMs for instant liquidity or redeem underlying assets through novETH contracts. Additionally, restakers can further leverage their novETH tokens in the DeFi ecosystem.
What lies ahead for Novum Finance?
Novum Finance’s journey has just commenced. We’re excited to present you our testnet soon and to start engaging with you!
Key upcoming developments include:
- Testnet launch: release of the first version of novum finance on testnet, testing and capturing initial user feedback.
- Mainnet launch: Anticipate the unveiling of Novum Finance’s liquid restaking platform, showcasing its features and capabilities.
We will announce a reward program for early supporters for our Mainnet launch, so start getting involved today and join our comunity on Discord!
We eagerly anticipate embarking on this journey together and refining novETH with your invaluable support. For inquiries or feedback, connect with us on:
- Twitter: https://twitter.com/Novumfinance
- Discord: https://discord.gg/kH3ma98bGH
Alternatively, reach out to us at contact@novumfinance.xyz. We’re looking forward to embarking on the restaking journey with you!
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