INTRODUCING NITROFINANCE ON MONAD.
NitroFinance = Decentralized exchange (DEX) + money market.
DeFi innovations is at the top of Blockchain use cases. From decentralized borrowing to lending, it is at the forefront of redefining finance. The potentials of DeFi is vast and can't be overstated, but it has been limited by the scalability issues of the underlying blockchain network (high gas fees and slow transaction speed.)
This is where Monad enters the chat, bringing NitroFinance along with it.
Monad, a highly performant ethereum compatible L1, that processes 10k transactions per second, is built to address the current problems of the Blockchain network.
How does NitroFinance enters the chat fit in? In this article, we would explore NitroFinance, what it is, its core features, nature of liquidity pool, and lastly why you shouldn't fade the decentralized app.
BRIEF INTRODUCTION TO NITROFINANCE.
NitroFinance is a DeFi primitive protocol built on Monad, integrates the functionality of Decentralized exchange (DEX) and money market into a fused trade ledger. Imagine uniswap and compound finance have a baby? That baby would be NitroFinance.
NitroFinance represents a novel approach in the DeFi ecosystem. At its core, NitroFinance enables users to swap various tokens directly from their wallet, trading without intermediary and also integrates the functionality of the money market, allowing users to lend and borrow on the same platform.
CORE FEATURES OF NITROFINANCE.
What makes NitroFinance unique compared to other DEXes or money markets?
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CONCENTRATED LIQUIDITY : This bin segregated framework, enable liquidity providers to allocate capital within specific price bins. This feature allows LPs to concentrate their liquidity in a narrow price range instead of providing liquidity across the whole range. This mechanism increases capital efficiency and optimizes returns.
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BIN ORDER : Bin order is a novel concept implemented by NitroFinance. It leverages the concentrated liquidity pool and utilizes single sided asset provisioning and borrowing to approximate various types of limit orders.
Think of this;
A trader looking to buy a specific asset can deposit collateral into the concentrated liquidity pool and specify the desired purchase price. The Bin order mechanism then utilizes borrowed assets from the pool to execute the trade once the market price reaches or falls below the specified limit.
On the other hand, a trader wishing to sell an asset can deposit it into the liquidity pool and set a minimum sell price. When the market price reaches or exceeds the specified limit, the Bin order mechanism would automatically execute the sale using the pool's liquidity.
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INNOVATIVE LIQUIDATION MECHANISM : NitroFinance implores an innovative liquidation mechanism that maintains the protocol solvency and eliminates bad debt risks.
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NITRO LAUNCHPAD : NitroFinance introduces a unique approach to token launches, by providing a customizable distributor curve for efficient price discovery and bootstrapping initial liquidity for token pairs. What this means is that nitro launchpad would offer a flexible model for determining token distribution and pricing.
5) NITRO POINTS SYSTEM : Nitro points are a system of measurement within the protocol. Earned by users who actively engage and contribute to NitroFinance discord and participating in events.
The aim of NitroFinance’s points system is for users to redeem a "care package" reserve for active community members when NitroFinance goes live.
HOW TO EARN NITRO POINTS
Engage in the discord.
Make memes and creative art about NitroFinance.
Invite friends.
Play games in the discord to earn Nitro points (you can play solo or PvP to earn points).
6) NITRO AUCTION : Nitro auction is a weekly event where users can bid with their accumulated nitro points on exclusive items. It is held every Tuesday from 2PM to 4PM UTC in the protocol’s discord.
What is up for grabs in Nitro Auction?
These;
NATURE OF NITRO POOL:
Concentrated liquidity design: Liquidity providers (LPs) allocate capital within specific price ranges known as "bins." This approach allows LPs to concentrate their liquidity within narrower price ranges, optimizing capital efficiency.
Bin based segmentation: The pool is divided into bins, with each bin representing a unique price point for asset pairs (e.g., USDT/MONAD). This segmentation enables more precise control over liquidity provision and trading activities at different price levels.
Price function: The price difference between bins follows a function of geometric progression. This geometric progression helps maintain a balanced liquidity distribution across different price ranges within the pool.
Bin categorization : Bins are categorized based on asset composition. For example, bins may be categorized as containing only asset 'x' in the 'X' range, only asset 'y' in the 'Y' range, or both asset 'x' and 'y' in the same bin ('A' bin). This categorization ensures that liquidity provision and trading activities are efficiently managed for each asset pair within the pool.
WHAT CAN A USER DO IN NITROFINANCE?
Users can;
Lend or provide liquidity.
Borrow.
Swap.
These are the primary activities a user can carry out in NitroFinance, there are other strategic activities a user can carry out in NitroFinance, yes NitroFinance has a lot to offer, Anon.
PROBLEMS THAT ARISE IN DEFI PROTOCOLS AND HOW NITROFINANCE SOLVES THEM :
Impermanence Loss : liquidity providers often face losers when the relative price of assets changes within the pool. NitroFinance impermanence loss for liquidity providers by generating fees through diverse debt interactions. Yes Anon, NitroFinance cares.
CAPITAL INEFFICIENCY : liquidity fragmentation is a problem in DeFi, where liquidity is spread out across different protocols for trading and lending, resulting in inefficiency and fragmentation affecting DeFi as a whole from reaching its peak.
NitroFinance addresses through a fused trade ledger, where a user can trade, borrow and lend in our platform, streamlining operations and increasing capital Efficiency.
BAD DEBT : sharp price drop can cause debt position to fall below the liquidation threshold resulting in losses. NitroFinance addresses this by employing an automatic debt recovery mechanism, coupled with fixed term debt, to prevent bad debt by absorbing the collateral asset at the borrowed price at the time of the debt expiry.
WHY YOU SHOULDN'T FADE NITROFINANCE.
User's focused features : Nitro Finance introduces features that are focused on enhancing and optimizing users’ experience.
Still wondering if you should be bullish?
the future is NITRO
Join NitroFinance;
Twitter : https://x.com/NitroFinance
Discord: https://discord.com/invite/83yAf2Q6Fa
