Napier Protocol acts as a liquidity hub, expanding Curve Finance's capabilities. It facilitates yield trading in the decentralized finance ecosystem, offering enhanced opportunities for users to generate and trade yields across platforms.

Overview

Napier facilitates versatile yield management strategies and supports the listing of any fixed-term asset on Napier (Curve). The market incentivizes participation in Curve and Convex Finance, allowing liquidity providers to earn trading fees, CRV, CVX, and the Napier native token alongside staking or lending yields. ^[1]

Napier Minting System

The Napier Minting System converts any yield-bearing token on Ethereum into a fixed-income equivalent. This process, called yield stripping, divides a "Target Asset" (a variable yield-bearing asset) into two separate assets: the Principal Token (PT) and the Yield Token (YT). Each target asset has an underlying asset on which it earns yield. For example, aDAI (Aave) earns DAI yield on DAI principal, while rETH (Rocketpool) earns rETH yield on rETH principal. In these cases, DAI and rETH serve as the underlying assets. One unit of the target asset can mint 1 PT and 1 YT, which can later be combined to reclaim 1 unit of the underlying variable yielding target asset. ^[2]

Napier AMM

Napier AMM employs a nested structure for yield trading between Principal Tokens (PT), Yield Tokens (YT), and their underlying assets. This includes trading between the LP token of the Base Pool and the underlying asset, known as the Time-dependent Metapool. ^[2]

The Metapool concept, derived from Curve Finance, involves a nested pool structure enabling token trading. In Napier, the simplest pool is the Base Pool, accommodating multiple fixed-term assets and holding all deposited assets at all times. ^[2]

Introduced in Napier, the Time-dependent Metapool incorporates a time parameter for trading fixed-term tokens on Curve Finance, facilitating efficient trading through the Curve pool. ^[2]

The Time-dependent AMM is suitable for trading tokens that appreciate as they near maturity dates, often denoted as PT/YT. It enables the computation of prices and marginal interest rates based on the ratio of the pool reserve and the remaining time to maturity dates. ^[2]

NPR Token

NPR utilizes the veToken model to control key protocol elements, such as the Napier time-dependent pool, pool parameters for fixed-term assets, protocol fees, emissions distribution, and governance participation. Governance participants can incentivize PTs/YTs minting or adjust mint and swap fees on chosen assets to encourage involvement from yield source protocols like lending or liquid staking. veNPR holders also have the ability to incentivize any LP tokens with NPR emissions. ^[3]

Llama Race

Llama Race is a gamified competition to reward user contributions within the Napier and Curve ecosystems. Advancing increases the potential NPR tokens users can earn at TGE. By earning points and climbing the leaderboard, users improve their rank, with the UI illustration evolving into rarer versions. The race took place during the week of March 17 to March 29 of 2024, preceding Napier Finance's mainnet launch by a few weeks. ^[4]

Napier points reflect user engagement in the Llama Race/Quest and can be exchanged for NPR tokens at TGE. These points are earned through actions like holding veCRV or vlCVX, PT/YT, or LP positions. Users can also increase points by engaging with Napier's partner LST/LRT projects and sharing referral links on social media. ^[4]

Llama Quest

Llama Quest consists of five chapters, representing Napier’s journey to restore Curve as the hub of LST/LRT. Early Napier and Curve community members can earn Napier points in advance for a head start before starting Llama Quest. ^[4]

Chapter 1 begins with simple social activities, offering everyone the opportunity to earn Napier points. From Chapter 2 onwards, Napier Finance will launch, providing more opportunities to earn Napier points through actions like holding PT/YT/LPT. A boost program will also be introduced in collaboration with Napier’s partner LST/LRT projects, allowing users to multiply their Napier points. ^[4]

Funding

Napier Finance raised $1 million during the pre-seed round from investors such as Michael Egorov (Curve Finance founder), C2tP (Convex Finance Co-founder), Winthorpe (Convex Finance Co-founder), B Dash Ventures, FLICKSHOT, Mrblock (Curve Finance), Charlie (DeFiLlama Co-founder), Brandon Neal (Euler Labs COO), Sidney Gottlieb (Prisma Finance Co-founder), Jinwoo Park (Hashed/MYTY founder), Jawz (Ex-OlympusDAO), Edward Mulraney (Liquity), Sho Yoshida (Crypto Investor), Fracton Ventures, and others. ^[1]