Overview of Sui Ecological Liquidity Protocol Leading Project NAVI

PANews · 2024-02-03T08:33:04.000Z
introduction Transaction and lending protocols are the cornerstone of the ecological development of all chains. The former is the basic need of users, while the latter meets users' diverse needs such as liquidity, leverage, and hedging. Recently, the Sui ecosystem has experienced explosive growth. One month ago, Sui TVL exceeded US$200 million, an increase of nearly 500% compared to September. And just last week, TVL exploded again and exceeded US$400 million. With the explosion of Sui, NAVI Protocol, the first native one-stop liquidity protocol on Sui, has also experienced substantial growth in users, TVL and strategic development. On January 31, NAVI Protocol’s TVL exceeded US$150 million, with a weekly increase of more than 80%, becoming the DeFi project with the highest TVL in the Sui ecosystem. SuiVision data shows that NAVI has completed more than 5.4 million transactions and has 1.11 million active addresses. In addition, NAVI Protocol recently acquired the liquidity staking protocol Volo, acquiring nearly 35% of the Sui ecological liquidity staking track. NAVI aims to strategically and simultaneously develop lending + liquidity staking, and is helping Sui explode through two-wheel drive Gain leadership at the same time.
introduction
Trading and lending agreements are the cornerstones of all chain ecosystem development. The former is the basic need of users, while the latter meets the diverse needs of users such as liquidity, leverage, hedging, etc. Recently, the Sui ecosystem has experienced explosive growth. One month ago, Sui TVL exceeded US$200 million, an increase of nearly 500% compared to September, and just last week TVL exploded again to exceed US$400 million.
With the outbreak of Sui, the users, TVL and strategic development of NAVI Protocol, the first native one-stop liquidity protocol on Sui, have also seen substantial growth. On January 31, NAVI Protocol's TVL exceeded US$150 million, with a weekly increase of more than 80%, making it the DeFi project with the highest TVL in the Sui ecosystem. SuiVision data shows that NAVI has completed more than 5.4 million transactions and has 1.11 million active addresses. In addition, NAVI Protocol recently acquired the liquidity pledge protocol Volo, acquiring nearly 35% of the Sui ecosystem liquidity pledge track. NAVI aims to strategically develop lending + liquidity pledge simultaneously, and gain a leading position while helping Sui to explode through a dual-wheel drive.
One-stop liquidity protocol
Mainstream and long-tail lending
NAVI provides lending services for a series of mainstream tokens (including SUI, USDC, USDT, etc.), with deposits exceeding US$63.26 million, US$45.68 million, and US$25.2 million, respectively. Compared with the US$400 million TVL of the entire ecosystem, the funds are abundant, and the relevant token pools all support cross-pool lending. Ecological users of various capital sizes can make full use of NAVI's capital pool for DeFi applications.
NAVI's lending interest rate model is a double-line interest rate model. The interest rate for borrowing is different according to the different utilization rates of the capital pool. Users can borrow money according to the interest rate after sufficient market pricing and will receive NAVI's borrowing incentives. The following official data shows that SUI, USDC The supply interest rates of USDT and USDT are 18.3%, 19.6% and 17.4% respectively. Especially after the huge market demand enters the second fold, adding the Boosted rewards provided by NAVI will also bring significant benefits to lenders.
Among the three leading lending protocols on Sui, NAVI's user borrowing amount reaches US$60 million, Scallop's borrowing amount is US$14.1 million, and OmniBTC's borrowing amount is US$22.4 million, with a market share of up to 62%, highlighting the protocol design structure and With significant competitive advantages in operations, users have a strong willingness to use NAVI as their main lending channel. In addition, NAVI's fund utilization rate is 40%, once again demonstrating the borrower's willingness to apply. On the other hand, the full utilization rate is also more attractive to lenders.
In addition to the above assets, NAVI also supports tokens such as CETUS (the DEX with the highest TVL on Sui), vSUI (SUI LSD token issued by LSD protocol Volo), and haSUI (SUI LSD token issued by LSD protocol Haedal). By supporting a wide range of lending currencies, it ensures the DeFi composability of users and also brings a second growth curve to the protocol.
Robust risk control design
While providing users with rich lending assets and depth, NAVI Protocol has also established a series of mechanisms to reduce the risks of bad debts and other extreme situations, providing effective risk control for user assets.
Long-tail asset deposit restrictions: NAVI limits the upper limit of the supply of collateral assets to avoid risks from specific long-tail assets. Specifically, for various small-cap, high-FDV and low-liquidity tokens, the oversupply of such tokens will bring structural risks. Whether it is a huge amount of unlocking or being attacked, the positions supported by such assets are likely to be unable to be liquidated after the event, resulting in bad debts. This mechanism is designed to avoid such situations.
Long-tail asset borrowing restrictions: NAVI also sets an upper limit for borrowing from the entire fund pool with a specific pool as collateral. Similar to the supply cap, the debt cap ensures that certain long-tail assets cannot be used to collateralize excessive positions, thereby achieving fine-grained risk control.
Borrowing Limits: NAVI sets mandatory borrowing limits for all accounts, calculated as a percentage of the value of the collateral, to ensure that users maintain a safe collateral ratio and protect the loan pool from default.
At present, the liquidity of NAVI's 150 million TVL is evenly distributed. According to Leaderboard data, the largest lender provides $7.9 million in liquidity, and the remaining nine addresses in the top ten provide $27.7 million in liquidity. According to official data, 50% of liquidity providers supply funds between $5,000 and $500,000. The platform's liquidity level is reasonably distributed, and there is no risk of sudden withdrawal of liquidity due to excessive share by large households. The participation of a large number of users further lays the foundation for the stability of the capital pool.
In summary, through the borrowing mechanism, numerical restrictions, and control of loan distribution, NAVI's lending pool provides safe and stable protection without affecting efficient operation.
One-stop platform
As mentioned above, trading, lending agreements, and even further leverage and hedging are basic activities for users and the cornerstone of chain development. Most activities fall into this range, and there is a strong demand for protocol use. In the current process of users participating in a specific ecosystem, users often face problems such as complex protocols that meet their needs, high management costs for too many protocols, and insufficient security. NAVI Protocol effectively solves the above difficulties and problems by building a one-stop platform that links the front and back ends of user needs.
At the forefront of the activity, i.e., fund transfer, NAVI integrated HeroSwap, allowing users to directly cross-chain trade multiple assets such as ETH, BTC, and SOL from other chains to Sui. In addition, the cross-chain protocol Portal Bridge was incorporated to enhance Sui’s accessibility and fast channel for user introduction.
In the core part, namely NAVI's core business of lending, NAVI provides a deep lending pool of mainstream and long-tail assets, ensuring that users' various DeFi needs can be met. The asset categories supported by NAVI are still expanding, and the acquisition of Volo further demonstrates its ambitious goal of vertical expansion.
In the backend part, that is, the management and monitoring after ecological participation. NAVI launched a centralized reward management page to provide the most direct farming channel for all basic participants. NAVI cooperated with BlockVision to launch a one-click query function for transaction history, providing advanced users with the most detailed data to further guide DeFi transactions. Its Leaderboard aims to help users identify communities and early supporters in a systematic way, and assist large traders in making decisions.
Multi-dimensional strategic expansion
Financing
On January 31, NAVI Protocol announced the completion of a US$2 million financing round, led by OKX Ventures, dao5 and Hashed, three first-tier cryptocurrency funds, and participated by Mysten Labs, Comma3 Ventures, Mechanism Capital, GeekCartel Capital, Nomad Capital, Coin98 Ventures, Cetus Protocol, Maverick, Viabtc, Assembly Partners, Gate.io, Hailstone Labs, Benqi, LBank Labs and others.
NAVI Protocol said it will use the funds from this round of financing to expand its one-stop lending and LSD platform.
Acquired Volo to expand LSD territory
On January 17, NAVI Protocol announced the acquisition of Volo, a decentralized liquidity pledge protocol. The liquidity pledge protocol allows users to deposit the original locked assets into the protocol, deposit the locked assets into the protocol on behalf of the users and issue asset certificates to the users. Users release liquidity while retaining the right to asset income. Representative assets include stETH, CRX, stATOM, etc. Volo allows users to pledge SUI and issue them liquidity pledge tokens vSUI. Currently, vSUI has no lock-up restrictions and can be used in a series of ecological protocols such as NAVI Protocol, and can also be traded in DEXs such as Cetus, FlowX, Turbos and Kriya Dex.
DefiLlama data shows that the current TVL of the Liquid Staking category of the Sui ecosystem is US$24.8 million, of which Volo accounts for 26.6%. Through this acquisition, NAVI Protocol quickly entered the LSD track and occupied an important strategic position.
Analysis of NAVI LSD's strategic intentions
Whether it is tokens, protocols or ecosystems, one of the most important factors for Web3 users is liquidity, including liquidity of funds entering and exiting the market and liquidity of assets. In the current DeFi design, in order to avoid panic stampedes, there is often a waiting period limit for the release of token pledges. The most well-known ones in the ecosystem are ETH PoS pledge, ATOM node pledge, and CRV (Curve) in the protocol. In response to the vast demand for liquidity, liquid pledge derivatives (LSD) such as stETH, stATOM, and CRX were born accordingly, allowing users to obtain liquidity without losing the value of the collateral.
However, not all LSD protocols can ensure that the ratio of collateral assets and Liquid Staking Tokens (LST) remains at or close to 1:1. Even stETH has experienced a depegging of more than 10% in 22 years. For example, the ARB staking protocol PlutusDAO on Arbitrum, its ARB LST plsARB is currently depegging 47%, and has been maintained at this level for several months. Therefore, for an ecosystem, an LSD protocol that can provide sufficient liquidity and operate effectively to ensure the anchor ratio is crucial.
TokenUnlocks data shows that the current circulation of SUI is 1.1 billion. In addition to the regular monthly unlocking, there will be two large-scale unlockings in July 24, and the circulation will be close to 2.9 billion by the end of 24.
As the bull market expectations in 24 years increase, the circulation and market value of SUI will rise accordingly. A suitable protocol is needed to meet the needs of SUI and ensure its liquidity and stability. NAVI's acquisition of Volo ensures its strategic position and lays the foundation for further development. As an ecological-level LSD, SUI's considerable volume and income will effectively promote the development of NAVI. In addition, the LSD business can be combined with NAVI's lending business to fully release its DeFi combination and comprehensively and continuously give play to the advantages of the vertical dual-wheel drive.
Launch the governance token NAVXIDO
At the same time as announcing the financing, NAVI also announced the IDO plan for the governance token NAVX on Cetus. The IDO activity will start at 20:00 (UTC+8) on February 4 and last for three days. The number of IDO tokens accounts for 1.2% (12 million) of the total NAVX, 0.96% is allocated to the NAVX-SUI pool, and 0.24% is allocated to the NAVX-CETUS pool. Among them:
The NAVX-SUI pool adopts the form of whitelist + over-subscription public sale. The whitelist quota can be up to 75%. That is, when the fundraising exceeds the target amount, it will be allocated first to the whitelist participants, and then distributed proportionally by the public sale users, and the over-subscribed funds will be returned.
The NAVX-CETUS pool has 100% oversubscription participation and no whitelist has been set.
The whitelist will be issued to community users, partners and the top 500 xCEUTS holding addresses. The number of lists and the corresponding quotas are shown in the figure below:
In terms of price, the NAVX-SUI pool raises funds at the rate of 0.021 SUI per NAVX. The current price of SUI is about 1.5 USDT, so the unit price and FDV of NAVX are 0.0315 USDT and 31.5 million US dollars respectively.
The fundraising price of the NAVX-CETUS pool is 0.26 CETUS per NAVX. The current price of CETUS is about 0.11 USDT. The corresponding unit price and FDV are 0.0286 USDT and 28.6 million US dollars respectively.
Conclusion
NAVI Protocol lending users will fully enjoy the deep capital pool of the protocol and effectively build DeFi strategies while enjoying further incentives from the protocol. The growth momentum of the Sui ecosystem is still continuing. NAVI is expected to usher in a new round of explosive growth through the dual-wheel drive of its core lending business and the strategic layout of the LSD track.