Distributing Ownership: NEPT Governance Token
The NEPRI TFA governance token (NEPT) is the native asset of the protocol. The token governs system parameters, including minimum collateralisation ratios, supported collateral and supported synthetic assets. Users must stake NEPT to participate in protocol voting.
To incentivise liquidity for NEPRI TFA assets, NEPT will be rewarded to NEPRIswap LPs who provide liquidity in NEPRIswap pools. This will encourage the minting of synthetic assets and bootstrap initial liquidity for users seeking long exposure to synthetics.
NEPT’s value accrual extends beyond qualitative governance benefits. From initial launch, two mechanisms will directly tie protocol usage to the NEPT token, providing a benchmark for valuation and sustainable incentives for ongoing liquidity provision:
• Trading Fees - NEPRIswap fees are configured to 0.3% of trading volume, where 0.25% is redistributed to pool LPs and the remaining 0.05% to NEPT token stakers. These fees will enable post-launch once NEPRIftaswap achieves sufficient liquidity and volume
• CDP Closure - CDP closure incurs a 1% fee on stablecoin collateral. This fee is aggregated daily and used to repurchase NEP tokens on NEPRIswap. Purchased tokens are redistributed to LPs who provide liquidity to the NEP pair on NEPRIswap. These fees are enabled immediately from launch.
In line with Table 1, NEPRI TFA will take a community first approach to governance, adopting a token distribution strategy which rewards both NEPRI TFA protocol contributors and broader DeFi participants. There is no team-controlled pre-mine, and all tokens are allocated as AMM liquidity mining rewards, as well as an airdrop to token holders in the Uniswap and NEPRI ecosystems.
UNI Holders
5% distributed at genesis to NEP stakers, followed by 10% distributed Block-by-block to NEP stakers over 1 Year.
NEP Stakers
Distributed over 1 year to Uniswap
Synthetic nYUSD LP token stakers
Synthetic Asset LP Rewards*
Distributed over 1
year to NEPRIswap Synthetic-nYUSD LP
token stakers.
Distributed over 1 year to NEPRIswap Synthetic-nYUSD LP token stakers.
NEPT LP Rewards*
Distributed over 1 year to Uniswap NEPT-nYUSD LP token stakes.
Distributed over 1 year to Uniswap NEPT-nYUSD LP token stakes.
Community Development Fund**
On-chain treasury
governed by NEPT token holders, requiring a minimum 50% voting quorum to be spent. Used to fund the developer ecosystem and establish future liquidity incentive programs.
*LP rewards will continue for an additional 3 years through inflation. Rewards for years 2, 3 and 4 decay at a rate of 50% of the previous year.
**The Community Development Fund will be replenished for an additional 3 years through inflation. The rate of growth will be 10%, 20% and 20% of the Year 1 Supply in years 2, 3 and 4 respectively.
Today’s uncharted monetary landscape is matched only by the radical experiments in DeFi. We believe that tokenized synthetic asset creation is one of the most compelling opportunities for these two worlds to come together. Tokenized synthetic assets are DeFi’s ²1-to-N" opportunity to absorb capital seeking a home in global and diverse markets without permission from gatekeepers. NEPRI TFA is NEPRI’s answer to synthetic assets, leveraging a performant blockchain and economic model to invent a protocol where any asset can be ²reflected" on-chain. It represents a unique alternative to centralised exchanges and e-brokerage platforms, with 24/7, on-chain, capital efficient minting, settlement and trading of US equities. In the future, almost any asset will be tradeable on NEPRI TFA.
DeFi will continue to flourish and inevitably charge its way into the corridors of traditional finance with open and transparent financial systems. Tokenized Synthetic assets are at the heart of this quest to reimagine, among other things, financial markets. We are excited to watch NEPRI TFA’s economic and technical vision come to life and ultimately set the standard for tokenized synthetic asset creation and trading.
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