LUCRA PROTOCOL
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NEPRI Finance Token (NEP)

The NEPRI Finance Token (NEP) is Lucra Protocol's governance token. NEP tokens can be deposited to create new governance polls, which can be voted on by users that have staked NEP.
NEP is designed to capture a portion of Lucra's yield, allowing its value to scale linearly with Lucra's assets under management (AUM). Lucra distributes protocol fees to NEP stakers pro-rata to their stake, benefitting stakers as adoption of Lucra increases -- stakers of NEP are incentivized to propose, discuss, and vote for proposals that further merit the protocol.
NEP is also used as incentives to bootstrap borrow demand and initial deposit rate stability. The protocol distributes NEP tokens every block to stablecoin borrowers, proportional to the amount borrowed.

Value Accrual

NEP rewards can also be earned by staking LP tokens of the NEP-nYUSD NEPRIswap Pair.
NEP tokens generate a buying pressure that increases proportionally with Lucra's AUM. Protocol fees are used to purchase NEP tokens from NEPRIswap, which are then distributed as staking rewards to NEP stakers.

Protocol Fees

NEP captures protocol fees generated from Lucra, where 20% of value flowing into the yield reserve used for the value accrual of NEP tokens. Lucra's protocol fees are sourced from lAsset rewards, excess yield, and collateral liquidation fees.

lAsset Rewards

A portion of rewards from deposited lAsset collaterals are used to purchase NEP, with the remainder used to replenish the yield reserve. The ratio of lAsset rewards used for NEP purchases can be adjusted thorough governance if the yield reserve's inventory rises to a sufficient level.

Excess Yield

Deposit yields in excess of the target deposit rate is accumulated to the yield reserve, with a portion used to purchase NEP. Purchased NEP tokens are then redistributed to NEP stakers.

Collateral Liquidation Fees

Whenever a loan is liquidated, 1.5% of the liquidated collateral value is sent to the yield reserve, which a portion of which is used to purchase NEP. This fee is applied separate from bid premiums.

Governance Fees

NEP token deposits of Lucra governance polls that have failed to reach the required quorum are redistributed NEP stakers as staking rewards.

NEPRI Token Supply for Lucra Protocol

The below token distribution schedules were drawn assuming the maximum borrower NEP emission rate (Emission Cap). In practice, it is highly likely that the rate of NEP distribution to borrowers will be lower than the values outlined in the below distribution schedule.
There are planned to be a total of 1,000,000,000 NEP tokens to be distributed over a period of at least 4 years. Beyond that, there will be no more new NEP tokens introduced to the supply for Lucra protocol.

Cumulative Distribution Schedule (in millions)

Genesis
Year 1
Year 2
Year 3
Year 4
Investors
0
100
200
200
200
Team
0
25
50
75
100
NEP Staking Airdrop
50
50
50
50
50
NEP Staking Rewards
0
50
100
100
100
Borrower Incentives
0
100
200
300
400
NEP LP Incentives
0
50
50
50
50
Community Fund
100
100
100
100
100
Token Supply
150
475
750
875
1,000
Annual Inflation (%)
nil
216.67%
57.89%
16.67%
14.29%

Genesis Token Distribution

A total of 150M NEP tokens will be released at the genesis of Lucra Protocol. The initial distribution of NEP will be given to:
  • NEP staking airdrop: 50M (33.3%) tokens will be airdropped to NEP stakers, with staked amounts snapshotted at block 2179600.
  • Community fund: 100M (66.7%) tokens will be reserved for the Lucra Community Fund.

Final Token Distribution

Further NEP tokens are set to be released over a period of at least 4 years, increasing total supply until it reaches 1B. The final distribution structure will be:
  • Investors: 200M (20%) tokens are allocated to investors of Lucra, with a 6-month lockup period. Afterwards, a 1-year linear vesting schedule is applied.
  • Team: 100M (10%) tokens are allocated to the creators of Lucra, with a 4-year vesting period. Tokens are to be released at every end-of-year.
  • NEP staking airdrop: 50M (5%) tokens are airdropped to NEP stakers on launch.
  • NEP staking rewards: 100M (10%) tokens are linearly distributed to NEP stakers over a period of 2 years. Tokens will be distributed every 100,000 blocks (approximately every week) starting from block 2179600. Snapshots are taken every 100,000 blocks to determine distribution eligibility.
  • Borrower incentives: 400M (40%) tokens are linearly released to be used as borrower incentives over a period of 4 years.
  • NEP LP staking rewards: 50M (5%) tokens are linearly distributed to the NEP-nYUSD pair liquidity providers over a period of 1 year.
  • Community fund: 100M (10%) tokens will be reserved for the Lucra Community Fund.

Inflation Rate

Inflation rate of NEP tokens are designed to gradually decrease every year, until it eventually reaches a supply of 1B.

Distribution to Ecosystem Participants

Distribution to Borrowers

NEP tokens allocated for borrower incentives will be gradually distributed to borrowers through the NEP emission control algorithm. This is further distributed to individual borrowers pro-rata to their amount of accrued borrow interest.
NEP incentives fuel a self-reinforcing adoption cycle, where they incentivize more borrowers to deposit lAsset collaterals, bringing further buying pressure to NEP, further increasing borrow incentives.

Distribution to NEP Liquidity Providers

Since NEP tokens are used borrower incentives to stimulate initial borrow demand and deposit rate stability, high exchange liquidity for NEP is crucial for maintaining a constant incentive flow.
To incentivize initial exchange liquidity of NEP, newly minted NEP will be also distributed to those that provide liquidity to NEP , specifically on the NEP-nYUSD NEPRIswap pair. Tokens will be given to stakers of the NEP-nYUSD NEPRIswap pair LP tokens.