Meet Neptune Protocol, the Native Stablecoin and Over-collateralized Borrowing Platform for the Eclipse Ecosystem
Central to the development of any growing blockchain ecosystem is a native stablecoin to pay early network contributors, diversify treasuries, and act as a key asset in the underlying DeFi ecosystem. Another vital piece of blockchain ecosystems is a native collateralized borrowing platform to provide network stakeholders (and bag holders) with liquidity options that increase the capital efficiency in the ecosystem.
Launching soon, Neptune Protocol and $USDN, a decentralized stablecoin soft-pegged to the US dollar, will establish both of these key ecosystem components on the fastest Ethereum L2, Eclipse. Neptune allows users to take out 0% interest loans for a one-time fee by depositing collateral for $USDN.
The design of Neptune Protocol and $USDN is the result of unparalleled experience and insight into stablecoin and collateralized lending design, with roots in the governance-free design mechanics of Liquity Protocol, and is set to be a key early component of Eclipse’s ecosystem.
This article is meant to serve as a high level overview of the Neptune Protocol, $USDN, and the roadmap to Eclipse’s mainnet deployment.
Neptune Protocol: Overview
As mentioned, many features of Neptune Protocol were originally inspired by Liquity’s novel design. For anyone interested in diving in at a more academic level to many of the concepts that make up Neptune Protocol’s approach, we encourage you to first dive into Liquity’s documentation.
Borrowing
The first key feature of Neptune Protocol is the ability users will have to unlock liquidity from their existing collateral. Instead of selling tokens, users can participate in ecosystem activities by borrowing against their tokens as collateral, in turn, receiving a proportionate amount of $USDN.
At a glance, Neptune Protocol offers users:
No interest loans
Maximum loan-to-value as high as 90.9% (Minimum Collateral Ratio of 110%)
Low minimum loan amounts close to $200
Loans with a one-time small setup fee and 0% interest so users can repay the loan on their own schedule
Multiple collateral types, including: TIA, stTIA, wETH, stETH, SOL, mSOL, JitoSOL and RETH.
The stability of Neptune Protocol relies on over-collateralization. A full breakdown of the perspective and details on borrowing fees and collateral ratios will be available in forthcoming docs.
$USDN Stablecoin
The by-product of Neptune Protocol is the $USDN Stablecoin that is soft-pegged to the US Dollar. It’s the first, and currently only, native stablecoin in the Eclipse ecosystem.
USDN sustains its price stability by employing a system that involves a redemption process, a capital efficient collateral ratio, and liquidation incentives backed by a stability pool.
The ceiling price of $USDN is $1.10, as users can always deposit the equivalent of $110 of collateral to mint $100 worth of $USDN.
$NPT
$NPT is a revenue share protocol token. It’s used to reward stability pool providers to the system by capturing a proportional share of the protocol revenues when staked.
Users who stake the $NPT token are able to claim a portion of protocol fees.
More information on incentives and staking of $NPT is available in forthcoming docs.
Summary on Key Features and Fees
In summary, the forthcoming launch of Neptune Protocol will be an opportunity for holders of the various accepted collateral tokens to access liquidity in the Eclipse ecosystem without having to sell their original holdings.
Neptune Protocol only charges a one-time fee of 0.5% of the loan amount, and if necessary, a one time fee in the event of a vault needing to be liquidated.
The key parts to remember about the protocol are:
A 0% interest loan offering
A stability pool, where users can deposit USDN and be rewarded in TIA, stTIA, wETH, stETH, SOL or stSOL and NPT tokens
A staking pool, where users can stake NPT and earn a proportional share of the protocol's revenue
Incentives to participate in token liquidity pools (to be released in the future)
Roadmap
If you are interested in Neptune Protocol and $USDN, we suggest you follow Eclipse, as Neptune Protocol will be deploying to coincide with Eclipse’s mainnet launch. Further information on additional accepted collateral types will be available closer to launch.
Follow along the journey and stay up to date on key dates by following us on X (Twitter) or Joining our Discord.