DeFi

NAVI (NAVX): Understanding Sui's One-Stop Liquidity Protocol

Intermediate
DeFi
Explainers
Altcoins
16 Okt 2024

Decentralized finance (DeFi) has grown from a niche concept into a thriving multibillion-dollar industry, offering users unprecedented control over their financial assets. However, this rapid industry growth has highlighted the need for more efficient, secure and user-friendly solutions.

NAVI (NAVX) meets these demands with a comprehensive DeFi platform for lending, borrowing and earning passive income. This article explores NAVI's features, its role in the Sui ecosystem and NAVI’s empowerment of users through innovative tools like automatic leverage vaults and shared liquidity pools.

Key Takeaways:

  • NAVI is the first native one-stop liquidity protocol on the Sui blockchain. NAVI users can provide liquidity to earn passive income or borrow assets using collateral.

  • Looking to trade NAVI tokens? Bybit now offers the NAVX/USDT Spot trading pair. To celebrate this listing, Bybit is holding an exclusive event where you can earn a share of the 200,000 NAVX prize pool. 

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What Is NAVI?

NAVI is the first native one-stop liquidity protocol on the Sui blockchain. NAVI users can provide liquidity to earn passive income or borrow assets using collateral. The protocol leverages shared liquidity pools and advanced features such as automatic leverage vaults to enhance capital efficiency and reduce risk.

History of NAVI

NAVI Protocol was founded by Charles and Elliscope, technology veterans with experience at Apple and LinkedIn. They envisioned NAVI as a "web3 bank for Web 2.0 users," with kindness and open-mindedness at the heart of the company’s culture. The word navi, derived from Hindi, means "Be Kind to People," reflecting this ethos.

Drawing on their Silicon Valley expertise, the founders collaborated with top engineers to build a protocol prioritizing user-friendliness and security. Their mission was to create a DeFi protocol that could deliver the benefits of decentralized finance (DeFi) to a global audience.

After evaluating various platforms, they chose the Sui blockchain for its enterprise-scale capabilities and innovative design. Sui’s object-focused programming model offers developers more flexibility than traditional account-based blockchains, making it an ideal foundation for the NAVI Protocol.

What Does NAVI Aim to Achieve?

NAVI aims to democratize DeFi by offering a simple platform for lending, borrowing and managing digital assets. Its primary goal is to reduce barriers to entry, allowing users of all experience levels to engage in DeFi without needing technical expertise.

The protocol enhances capital efficiency with features like automatic leverage vaults and yield-bearing tokens, helping users maximize the potential of their assets. NAVI also prioritizes security by using advanced risk management tools, such as isolation mode and debt ceilings, to safeguard user funds.

Decentralized governance is another crucial aspect of NAVI's mission. Its governance token, NAVX, allows token holders to vote on decisions and proposals, enabling them to help shape the protocol’s development. This ensures that NAVI remains a community-driven platform and supports a truly decentralized ecosystem.

How Does NAVI Work?

NAVI operates through a shared liquidity pool system. For each supported asset, NAVI creates a pool where users can deposit assets and become liquidity providers (LPs), earning passive income in return for NAVI receipt tokens (e.g., nSUI). Lenders supply assets to the pools, while borrowers take loans by providing collateral. Borrowing limits are determined by a dynamic collateralization ratio, which adjusts based on pool supply and demand. Interest rates for lending and borrowing fluctuate according to market conditions.

A "health factor" continuously monitors the safety of each borrower’s position. If their health factor drops below 1, it signals that their collateral is insufficient to cover the loan, triggering a liquidation process. During liquidation, up to 35% of the borrower’s debt is repaid using their collateral, along with a liquidation fee.

To manage risk, NAVI implements advanced features such as isolation mode for introducing new assets, debt ceilings to limit borrowing and supply/borrow Limits. The protocol integrates oracle services to provide accurate price data for collateral, loan amounts and liquidation triggers, ensuring the system remains secure and reliable.

The NAVX token powers NAVI’s governance, allowing token holders to vote on proposals affecting interest rates, new assets and risk management parameters. Together, these mechanisms create a self-regulating DeFi ecosystem that supports efficient lending and borrowing while maintaining protocol safety.

Features of NAVI

NAVI offers a range of innovative features, described below, that are designed to enhance user experience and maximize capital efficiency.

1. Supply & Earn

NAVI offers a straightforward way for users to supply digital assets and earn passive income. By depositing assets into NAVI's liquidity pools, users can earn interest that fluctuates based on supply and demand. There are no minimum or maximum deposit limits. allowing users to manage their funds flexibly.

2. Borrowing

The protocol’s borrowing feature allows users to borrow cryptocurrency assets and obtain loans using their deposited assets as collateral. The loan-to-value (LTV) ratio is dynamically adjusted to ensure borrowers don’t exceed their capacity and experience liquidation.

3. Liquidations

NAVI employs a liquidation mechanism to protect the protocol from default risks. If a borrower's health factor drops below a safe threshold (as mentioned above), their collateral is subject to liquidation. The liquidation process is managed through secure oracles that aggregate price data from multiple sources to ensure accurate pricing.

4. Flash Loan

NAVI’s flash loan feature allows users to borrow assets without collateral, provided the borrowed amount is repaid within a single transaction. Flash loans create opportunities for arbitrage, collateral swaps and other advanced trading strategies without requiring significant capital investment.

5. NAVI Pro

NAVI Pro is a liquidity management system designed for professional traders seeking enhanced features and tools. It offers deeper integration with trading strategies and access to leverage, making it suitable for users who require advanced financial tools within the DeFi space.

6. Volo

Volo is a feature that focuses on maximizing asset utility within the NAVI ecosystem. It enables users to leverage their digital assets to access additional yield opportunities, allowing them to engage in more sophisticated trading strategies with reduced risk.

NAVI Road Map

Several key milestones have marked NAVI Protocol’s journey:

  • Q2 2023: Launch of the liquidity protocol, supporting SUI, USDT, USDC, wrapped ETH and wrapped BTC. This phase also introduced the leveraged vault user interface (UI).

  • Q3–Q4 2023: Integration with Sui Foundation's DeepBook to harness deep liquidity reserves, launch the NAVI token and establish a decentralized autonomous organization (DAO) for governance.

  • Q1 2024: NAVX token launch and the kick-off of the NAVI Ecosystem Fund.

NAVI’s journey continues with several exciting milestones planned for the remainder of 2024:

  • Q2–Q3 2024: Launch of NAVI Pro, deeper integration with Volo, and new utilities for NAVX, including payments and borrowing fees in NAVX.

  • Q4 2024: Launch of NAVI’s decentralized governance system, allowing NAVX holders to shape the protocol's future.

NAVX Tokenomics

NAVX, the native token of NAVI Protocol, is primarily used for governance. Token holders can vote on essential protocol decisions, such as interest rates, new assets and other vital changes that will shape the platform’s future.

NAVX also incentivizes liquidity providers, and offers staking rewards to encourage active participation. Users can provide liquidity to NAVX/SUI and NAVX/vSUI pairs on decentralized exchanges (DEXs), and receive LP tokens. These tokens can then be locked for a certain period, making users eligible for rewards in NAVI's money market.

Token Distribution

  • Total Supply: 1 billion NAVX

  • Team Allocation: 20%

  • Treasury: 10%

  • Liquidity Provision: 4%

  • Public Sale: 1.2%

  • Marketing: 3%

  • Ecosystem & Airdrop: 45.8%

  • Investors/Advisors: 16%

NAVX Price Prediction

NAVX’s price outlook is closely tied to the growing adoption of NAVI Protocol within the Sui ecosystem. Initially launched at 0.021 $SUI, NAVX has the potential to see significant growth as DeFi continues to expand. As of Oct 15, 2024, the NAVI token is priced at $0.146.

While cryptocurrency price predictions are speculative, several price analysts have provided forecasts for NAVX:

These forecasts suggest a positive long-term outlook for NAVI, driven by its innovative features and growing role in decentralized finance. Ultimately, NAVX’s future value will depend upon the continued success of the NAVI Protocol, its integration within the Sui ecosystem and broader market conditions.

Where to Buy NAVX

Looking to trade NAVI tokens? Bybit now offers the NAVX/USDT Spot trading pair for trading. To get started, you’ll first need to create a Bybit account, then fund with cryptocurrency and navigate to the NAVX/USDT Spot trading page. 

To celebrate this listing, Bybit is holding an exclusive event where you can earn a share of the 200,000 NAVX prize pool. 

Simply complete deposit or trading tasks listed on the Token Splash page to earn 100 NAVX. Please note that rewards are limited to the first 2,000 new users.

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Is NAVX A Good Investment?

Evaluating NAVX as an investment involves considering both its strengths and potential risks.

Potential Strengths

  • NAVI Protocol simplifies DeFi with user-friendly lending and borrowing, making it attractive in the growing DeFi space.

  • Advanced features, such as automatic leverage vaults and dynamic liquidity provision, enhance capital efficiency and risk management.

  • NAVX’s governance role and use in rewarding liquidity providers add strong utility.

  • NAVI is built on the Sui blockchain and benefits from enterprise-scale infrastructure that supports future scalability.

Potential Risks

  • As with all cryptocurrencies, NAVX is exposed to market volatility that can affect its price.

  • New protocols could challenge NAVI’s competitive edge in the Sui ecosystem.

In summary, NAVX offers promising potential, but its future success hinges on the growth of NAVI Protocol and the evolving DeFi ecosystem. Investors should weigh the risks and perform their due diligence before investing.

Closing Thoughts

NAVI is a promising DeFi protocol that aims to revolutionize the lending and borrowing market. With its unique features, such as algorithmic-based interest rates and liquidity incentives, NAVI is poised to significantly expand DeFi accessibility and functionality within the growing Sui ecosystem. 

Whether you’re a user looking to earn passive income through staking or a trader seeking high-yield opportunities, NAVI offers versatile solutions for everyone in the rapidly growing world of decentralized finance.

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