NAOS Finance is an on-chain lending protocol based on real-world assets. By cooperating with third parties in the real world, users can use real assets as collateral to obtain loans of fiat which is converted from stablecoins. NAOS Protocol consists of two sub-protocols, NAOS Formation and NAOS Galaxy. What is the utility of NAOS Finance token?
The NAOS Finance token (“NAOS”) has the following utilities:
Yield Boosting: Similar to Curve Finance, NAOS rewards long-term stakeholders locking tokens in the Boost Pool. Lock periods of 3, 12, 24, and 48 months are available, which can boost yields up to 2.5x.
Governance: Lock NAOS token in the boost pool to receive veNAOS governance token. veNAOS holders vote on all protocol matters including, but not limited to, new product features, protocol upgrades, borrower onboarding, loan terms, and partnership priorities.
The team will gradually implement other token utilities on the roadmap:
Service Fee Reduction: NAOS charges a 0.5% service fee on the total withdrawal amount for protocol reserve. Lenders may reduce service fees by holding veNAOS.
Borrower Staking: Approved Borrowers will have a cap on the loan facility. To increase the borrowing limit, Borrowers are required to stake NAOS tokens as reserves. The higher the borrowing limit, the more staked NAOS token is required.
Auditor Participation: To ensure the independence of Auditors, NAOS Protocol does not encourage Borrower briberies. Instead, staked tokens from Borrowers are pooled as reward for successful Auditor evaluations. In the case where more Auditors are available than the borrowing demand, Auditors may need to stake NAOS tokens to be selected.
Among them, NAOS Formation is a future-yield-backed synthetic asset protocol with 3 components: Vault, Transmuter, and Staking Pool.
- Vault: Vault is the module for future-yield lending. After users deposit their DAI in the vault, they can obtain their future yield in the form of synthetic stable coin nUSD. The collateral ratio is 200%, which means that the max borrowable value of nUSD equals half of the deposited assets generally. Users’ deposits will be staked on yearn.finance for DAI yield farming, and the farming profits will be used for paying users’ debts. On this basis, users can choose to withdraw some deposits or borrow more nUSD to keep the collateral ratio. As of Nov 4, 2021, the yield APY is 6.76%, while the amount of nUSD has exceeded $9m.
- Transmuter: Transmuter is the module for converting nUSD to DAI gradually when users borrow nUSD from Formation. These DAI can be used to pay debts. Users can also withdraw the remaining nUSD and transmuted DAI at any time.
- Staking Pool: NAOS Finance provides 5 staking pools on Ethereum and BSC to attract liquidity for NAOS and nUSD, including NAOS single staking pool, NAOS/ETH LP Pool, NAOS/ETH SLP Pool, nUSD/3CRV Pool and NAOS/BNB LP Pool. Liquidity mining rewards will be paid back to LPs in the form of NAOS.
NAOS Galaxy is the lending protocol based on real-world assets. It has a lending pool (“Alpha pool”) for making loans and an insurance fund pool ( the “Beta pool” ) for paying the loss of the lending pool. Alpha pool accepts stablecoins, and only liquidity providers (LPs) with KYC and eligible, while Beta pool has no KYC requirement and accepts nUSD only. As “compensation” for taking risks, LPs of the Beta pool will receive higher yields. If borrowers default on their debts or borrowers’ loans are liquidated, the Beta pool will pay the loss of Alpha pool with nUSD, while the principal remains untouched and continues to earn yields to pay down the nUSD loan.
The NAOS Finance token (“NAOS”) has the following utilities:
Yield Boosting: Similar to Curve Finance, NAOS rewards long-term stakeholders locking tokens in the Boost Pool. Lock periods of 3, 12, 24, and 48 months are available, which can boost yields up to 2.5x.
Governance: Lock NAOS token in the boost pool to receive veNAOS governance token. veNAOS holders vote on all protocol matters including, but not limited to, new product features, protocol upgrades, borrower onboarding, loan terms, and partnership priorities.
The team will gradually implement other token utilities on the roadmap:
Service Fee Reduction: NAOS charges a 0.5% service fee on the total withdrawal amount for protocol reserve. Lenders may reduce service fees by holding veNAOS.
Borrower Staking: Approved Borrowers will have a cap on the loan facility. To increase the borrowing limit, Borrowers are required to stake NAOS tokens as reserves. The higher the borrowing limit, the more staked NAOS token is required.
Auditor Participation: To ensure the independence of Auditors, NAOS Protocol does not encourage Borrower briberies. Instead, staked tokens from Borrowers are pooled as reward for successful Auditor evaluations. In the case where more Auditors are available than the borrowing demand, Auditors may need to stake NAOS tokens to be selected.
