Funding Background

Funding parties

At the beginning of this year, NAVI announced the completion of a $2 million funding round. This round was co-led by OKX Ventures, dao5, and Hashed, with additional investments from Mysten Labs, Comma3 Ventures, Mechanism Capital, Coin98 Ventures, Gate.io, and LBank Labs. Notably, Mysten Labs is the developer of Sui, and its investment in NAVI indicates the project’s strong fundamentals.

Core Functions

The core functionality of Navi Protocol is primarily focused on lending and borrowing. However, based on its user tier system, NAVI offers a more professional and convenient PRO service experience for high-level and whitelisted users.

NAVI Lite and NAVI PRO

Lending

Lending and Borrowing

Regarding lending and borrowing, NAVI has long been recognized for its higher capital efficiency, stronger security, and superior user experience through innovations such as the “Leverage Vault” and “Isolation Mode.”

NAVI lending page

Leverage Vault: The automated leverage feature meets users’ needs for repeated borrowing of assets to further enhance capital utilization with a simple and intuitive operation.

Isolation Mode: To ensure trading security, this feature requires that new assets be collateralized only after receiving approval from NAVI governance. This further safeguards users’ ability to participate in new trading opportunities with minimal risk.

Asset Parameters

Parameters related to NAVI lending tokens

NAVI offers various lending types, covering mainstream tokens as well as commonly used tokens within the Sui ecosystem.

Earn

Earning process

In addition to earning interest by depositing tokens in Lending, NAVI offers an Earn feature (Advanced LST Strategy) for users at level V3 and above. This feature allows users to easily integrate leverage into staking protocols through NAVI’s lending, eliminating the need for users to manually repeat the borrowing and staking process. Currently, the supported staking tokens include haSUI and vSUI.

Migrating wUSDC to USDC

Sui has launched native USDC

On October 8, Circle announced the launch of native USDC on Sui to meet ecosystem needs and accommodate user demand for converting to native USDC. In response, NAVI introduced a migration feature that allows users to convert their existing wUSDC lending positions into native USDC positions. The core of this feature is based on the principle of flash loans, enabling quick position switching to provide convenience for users.

NAVI migration page

Flash Loans

Navi Flash Loans are an advanced financial tool unique to the blockchain space. They provide a powerful mechanism for borrowing assets without the need for prior collateral. These transactions must be initiated and settled within the same block (also known as “single-block lending”), making them highly time-sensitive and reliant on executing predefined conditions.

Parameters for flash loan tokens

Currently, the NAVI flash loan feature supports the following tokens: SUI, USDC, USDT, and vSUI.

Liquidation

Liquidation process

Liquidation occurs when a borrower’s health factor falls below 1 due to insufficient collateral value to cover their loan/debt position. This situation can arise when the collateral’s value decreases, or the borrowed debt’s value increases.

In a liquidation, the borrower can repay up to 35% of the debt (depending on the token), and this value, along with the liquidation fee, will be deducted from the available collateral. As a result, your debt will be settled after the liquidation.

Volo

NAVI acquires Volo

NAVI deepened its LST layout by acquiring Volo, a leading liquid staking protocol in the Sui ecosystem. This acquisition enables users to stake SUI tokens to obtain liquid staking tokens vSUI and earn more rewards. Following the acquisition, NAVI opened a new LST track and integrated upstream and downstream operations, launching advanced LST strategies.

User Tier System

User tier requirements

NAVI has established a points system for users, categorizing them into five levels based on the amount of assets provided, utilization rate, or $NAVX holdings. The higher the level, the more advanced services users can access, including liquidation forecasting, reward compounding, and leveraged staking strategies. The specific functions are as follows:

Liquidation Forecasting (V1 Members)

This feature visually displays the current liquidation value of the user’s positions, the distance from liquidation, and the acceptable range for the total value fluctuation of the tokens. Additionally, it calculates when the user’s tokens may be liquidated if their value rises (or falls) to a threshold based on current supply/borrowing data.

Automatic Reward Compounding (V2 Members)

Users can directly stake the rewards they receive into the corresponding token pools.

Strategies (V3/4 Members)

This feature aims to optimize asset recovery and maximize returns by interacting across different protocols. The Strategy feature will help users achieve high yields with one-click interactions without switching between multiple platforms. \
The initial launch will include three types of strategies:

Advanced LST Strategy: Maximizes returns by staking SUI tokens and cyclically re-providing liquid-staked SUI.

Liquidity Pool Strategy: Earns additional returns by borrowing and providing liquidity to DEXs.

Collaboration Strategy: Earns extra returns by borrowing NAVI and participating in partner protocols.

NAVX Token Economics

Token Distribution

$NAVX distribution

The current market circulation of $NAVX is 243 million, with a total supply of 1 billion, meaning that approximately 24% of the tokens are in circulation.

Token Utility

Governance

Token holders can participate in the governance of the NAVI protocol by voting on proposals and updates. This decentralized governance process ensures that the platform’s development and future direction are user-driven.

Governance proposals include currency markets, new proposals regarding collateral and isolated market candidates, incentive pool proposals, and major updates to the platform.

Dynamic Liquidity (dLP) Regulations

To receive LP tokens, users can provide liquidity for NAVX/SUI and NAVX/vSUI pairs in the DEX. They can then lock LP tokens for a period based on their supply ratio to activate eligibility for rewards in the currency market.

The uses of dLP include:

Increasing $NAVX issuance: Users can earn additional $NAVX rewards on top of the base supply/borrowing APY.

Profit sharing: The NAVI protocol generates fees through lending within the platform. A portion of these fees is distributed to dLP holders, while the remaining fees are allocated to the platform’s treasury and other purposes defined by platform design.

Voting: Users holding dLP tokens have greater voting power than regular $NAVX token holders.

Eligibility: To trigger $NAVX issuance for deposits and loans, you must lock at least 2.5% of the dollar value of your deposit in dLP tokens.

Token Emission

$NAVX Emission Path

$NAVX will experience a significant token unlock in Q4 2024, during which ecosystem incentives will further expand, and tokens required for the team and marketing will also begin to unlock.

Belonging Ecosystem

Public Chain TVL Ranking

NAVI Protocol is the native lending protocol on the Sui ecosystem. The Sui ecosystem has been active recently, announcing the Grayscale SUI Trust Fund and launching native USDC, with the $SUI token rising sharply to new highs. The popularity of Sui supports NAVI. In the competition for the top lending protocol within the Scallop Lend ecosystem, NAVI emerged victorious and is currently the largest lending protocol in the Sui ecosystem.

Recent News

On July 27, NAVI Protocol officially announced an upgrade to its oracle system, introducing a decentralized oracle solution that leverages the advantages of Pyth and Supra. This upgrade enhances security, robustness, and user asset protection.

On October 11, NAVI Protocol announced the launch of an automatic migration feature from wUSDC to USDC.

Conclusion

Lending protocols are undoubtedly indispensable as an essential part of DeFi. In its core lending operations, NAVI Protocol offers basic lending services and flash loan services, effectively covering market demand. Additionally, NAVI provides one-click leveraged lending earning for advanced and whitelisted users, allowing them to build positions and gain leveraged exposure quickly.

As indicated by its TVL, through acquiring Volo and features such as native USDC swaps, NAVI Protocol has become a composite DeFi platform in the Sui ecosystem. Its connections with the broader ecosystem have become closer, promoting synergistic development.