DamoTalks #43 Recap: AMA With NAOS Finance

Introduction:

DamoTalks #43

Guest: Michelle, Head of Marketing of NAOS Finance

Host: Jane — Event Operation of TokenDamo

Live Assistant: Lin Lin

Live time: February 23, 4 P.M. (UTC+8), 2022

Q&A

Q1: Welcome to DamoTalks, can you give us an introduction about yourself?

Hi TokenDamo Community, thanks for having me here. I am Michelle, I’ve been in the blockchain space since 2017, being involved in CEX and some DeFi projects. Blockchain is a rapidly evolving industry and I believe DeFi is disrupting and reshaping the financial services around the world. Thanks again for having me here to introduce our amazing project — NAOS Finance.

Q2: Could you tell us more about NAOS Finance, for instance, what exact problem does it aim to resolve and what are your key products and features?

NAOS Finance is a DeFi lending protocol that uses real-world-asset (RWA) as collateral. The biggest factor that differentiates us from other DeFi protocols is — traditional DeFi protocol uses cryptocurrency as collateral to borrow another cryptocurrency, NAOS uses real-world-assets (RWA) as collateral, which has stable principle value and steady income streams that counter the volatility in crypto-asset collaterals.

NAOS introduces a new asset class (the real-world-assets) to DeFi space, which will significantly expand DeFi boundary to the vast majority of the world population, and offers DeFi investors with less volatile and highly competitive yield in stablecoin.

NAOS Protocol has two sub-protocols: the liquidity protocol Formation and the lending protocol Galaxy.

The Formation main-net is similar to Alchemix, it allows us to take the liquidity from DeFi. Galaxy main-net is for real-world lending, it consists of Alpha Lending Pool and Beta Insurance Pool.

This pic explains how our protocol works. You can refer to this article for a better understanding of our protocol:

https://medium.com/naos-finance/naos-protocol-at-a-glance-23e8a8f9edf

Q3: There are many projects nowadays in the field of real-world asset lending/borrowing, what are the strength and competitiveness of NAOS Finance?

NAOS is uniquely positioned by being regulatorily compliant and the scale of real-world assets originated.

NAOS has financing licenses in multiple regions, allowing us to interact with real-world companies directly.

Furthermore, NAOS has already established a large network of real-world borrowers (over 2,000 corporate partners) with over $300M worth of assets committed to deploying on-chain. These are two key drivers that allow NAOS to originate RWA compliantly at scale.

We are also aware that Centrifuge has been in this field for several years, and Goldfinch is an emerging power that has been aggressively expanding since last year. All of us are sharing the same vision — to close the multi-trillion global credit gap and bring DeFi liquidity to the vast majority of the world population. We believe that with the joint efforts, eventually, we would all become the major force to scale the DeFi market into a larger space.

Q4: What is your Tokenomics like?

To begin with, I’d like to introduce the $NAOS token utility in our RWA ecosystem. Currently, the $NAOS token is distributed as a reward to users who participate in our protocol.

Holding $NAOS will boost lenders’ rewards in real-world lending (rewards in Alpha Lending Pool).

At a later time, real-world corporate borrowers will have the option to hold a certain amount of $NAOS tokens to access more loan facilities and better rates.

In the future, the $NAOS token will be served as a governance token when DAO is implemented in the ecosystem. $NAOS token holders could then participate in the decision-making process, including asset onboarding, interest rate setting, product feature developments, reward allocation for various pools, etc.

The graph shows our tokenomics and vesting schedule clearly, you can refer to Coingecko’s link to learn our detailed circulation and supply: https://www.coingecko.com/en/coins/naos-finance

Q5: What have you done in terms of protocol security? Also, if there is bad debt, how do you carry out risk control?

NAOS takes several measures to ensure the security of our user’s funds:

In the DeFi part, our two sub-protocols (Liquidity Protocol Formation & Lending protocol Galaxy) have undergone some rigorous audits by top auditing companies:

Formation Audit Report (on Ethereum):

https://certificate.quantstamp.com/full/naos-formation

Formation Re-audit Report(On BSC):

https://certificate.quantstamp.com/view/naos-formation-updates

Galaxy Audit(on BSC) :

https://www.certik.com/projects/naosfinance

Moreover, we’ve cooperated with different DeFi Insurance Protocol (insurAce.io) to provide coverage for smart contract incidents, users have options to buy insurance to cover their fund for possible smart contract hacks, etc.

In the CeFi part, NAOS also takes measures to protect the user’s fund in the unlikely possibility of RWA default: On Galaxy main-net, the Beta Insurance Pool is designed to cover the loss of Alpha Lending Pool in the rare case of default.

NAOS also partner with third-party Insurance Protocols to provide an additional layer of downside protection on top of Galaxy’s Beta Insurance Pool (to be launched soon)

In conclusion, one thing that differentiates us from other pure DeFi protocols is, the stablecoin users deposited in our Alpha Lending Pool will be exchanged to Fiat to fund real-world corporate borrowers — which means it will be used for off-chain operations, so there is rare smart contract hack risk with Alpha Pool capital.

Q6:Can you briefly introduce the two sub-protocol Formation and Galaxy you just mentioned? How can TokenDamo community members participate?

Sure! NAOS Protocol (Formation + Galaxy) is completely deployed on Binance Smart Chain(BSC), and the liquidity protocol Formation is also available on Ethereum.

I’ll take BSC as an example, Formation is where users can deposit BUSD and mint synthetic token nBUSD. The minted nBUSD can be deposited in Galaxy Beta Insurance Pool and users can stake Beta token to earn additional yield.

Lending protocol Galaxy consists of Alpha Lending Pool which connects real-world assets, and Beta insurance pool to cover the loss of Alpha Pool in case of real-world-asset default.

I’ll show the two infographics for your easy understanding of our Alpha Lending Pool and Beta Insurance Pool.

Alpha Lending Pool
Beta Insurance Pool

In addition, NAOS also provides different farming pools to reward our liquidity providers, NAOS-BNB LP staking pool, NAOS Boost Pool, and Beta Staking Pool.

Let’s take a glance at our protocols, for the supported token and yield generated:

  • Formation Page: Deposit BUSD and borrow nBUSD
  • Alpha Pool: Deposit BUSD and generate yield in BUSD +NAOS
  • Beta Pool: Deposit nBUSD and stake Beta token to generate yield in NAOS
  • Staking Pool on Farm Page:

-NAOS/BNB pool: Deposit NAOS/BNB LP token and generate NAOS token rewards

-NAOS Boost Pool: Deposit NAOS token with different lockup period options (3 months/1 year/2 years/4 years) and generate NAOS token rewards. If you invest in Alpha Pool at the same time, it would also boost your yield (NAOS token) in Alpha Pool.

-NAOS Beta pool: Deposit Beta token and generate NAOS token rewards

The above information may look overwhelming, no worries, we have tutorials for your easy understanding:

Remember that NAOS is your best stablecoin yield strategy with less volatility and competitive yield backed by Real-World-Assets.

Demystify NAOS Protocol — A Tutorial:

https://medium.com/naos-finance/demystify-naos-protocol-a-tutorial-18844b035c2b

Regarding the soon-to-be-launched Alpha Lending Pool, NAOS provides a stable coin yield strategy with less volatility and a competitive yield.

A comparison page

Q7: As a real-world-asset-on-chain project, do you mind sharing with us some of your business partners that you are already working with and how do you work with them?

In terms of building an RWA-based DeFi infrastructure, NAOS Finance has reached cooperation with several projects, such as lending protocols MakerDAO and dForce, oracle provider Chainlink, IOT data provider IoTeX, insurance protocol Tidal Finance and on-chain contract notarization provider EthSign, etc.

With the Alpha Pool launch and the loan cycle running, we will start product integration/business collaboration with some of them, please stay tuned with our future announcement.

In terms of RWA originators, we’ve already announced our first onboarding assets Fintopia (check intro. here: https://t.me/naos_finance/166585), we’re also in discussion with several assets, will announce new onboarding assets soon.

Q8:What are your upcoming plans?

The soonest plan is to get our first Alpha Lending Pool live as soon as possible. After that, we will announce our roadmap for 2022, including specific plan in the following directions:

  • Development: We will announce our plans for new product features, dedicated pools for institutional investors, more supported asset class, multi-chain deployment, governance framework, etc.
  • Operational: Scale real-world-assets
  • Partnerships: We will announce multiple partnerships/programs to improve liquidity

Thanks for the answers. We will hold a bounty quiz soon, and all the answers to the questions are included in the Q&A session. The top 6 winners will get NAOS token rewards, and all eligible participants for TokenDamo & NAOS AMA event will be granted an exclusive NFT:

NFT Campaign Page: https://galaxy.eco/naosfinance/campaign/GCokSUUBTv

Withholding the NFT, you can participate NAOS Ambassador program: https://medium.com/naos-finance/introducing-naos-ambassador-program-bf6fb81f6ec7

Free Q&A

1.Between the liquidity protocol Formation and the lending protocol Galaxy. Which is more rewarding?

A: This is a good question. NAOS Protocol is designed for users with different yield appetites, regardless of whether you’re a NAOS token holder. There is a solution for both NAOS tokens and stable coin holders. If you’re an investor with a low-risk appetite, you can choose to deposit BUSD in the Formation main-net and borrow nBUSD, then deposit your nBUSD in Beta Insurance Pool — stake Beta token to earn leveraged yield. For all the risk appetite, you can refer to the solutions mentioned in this article: https://medium.com/naos-finance/naos-protocol-mainnet-launch-on-binance-smart-chain-ccb69f293d8b

2.Real word assets usually have a critical concern about determining their fair value, therefore affecting the collateral value as well. Moreover, its value can fluctuate at all times. So, the questions are:

1)How the investor can ensure that the determination of RWA is reasonable (because it affects the value of collateral) and how often does the team revisit the fair value of the RWA used as collateral?

2)Who is responsible for collecting the principal and interest from the borrower in case the borrower does not repay?

3)If the price of RWA is used as collateral drops, will there be liquidation? If so, what is the level of liquidation? Moreover, on the contrary, if the price increases, will the borrower be able to borrow more?

A: We are cooperating with professional fintech companies to conduct a due diligence/collateral value assessment for corporate borrowers. They are all professional companies with rich experience in the CeFi world, so we’re pretty sure their valuation is fair and there is enough collateral.

As mentioned in the Q&A session, we have Beta Insurance Pool and our partnership with other insurance protocols to provide insurance coverage for Alpha Pool capital. So in the case of default, the user’s principle will be repaid by that insurance fund. The liquidation will be between NAOS and corporate borrowers/fintech companies, it’s a CeFi process.

3.In mortgage lending, of course, there is a difference between traditional institutions and loans in DeFi. What do you think are the advantages for users when doing so on your platform over traditional institutions like Banks? And what is the biggest challenge?

A: A borrower in Indonesia wants to borrow $, but the local interest rate is 15% APR from traditional institutions (banks, etc). But in some developed countries, the interest rate is quite low, for example, a lender in England is satisfied to lend at 3%.

So if the England lender wants to lend their money to the Indonesian borrower, they have to deal with a lot of cross-border transactions with the high cost and low efficiency. NAOS’s solution is to build a system and facilitate the loan deal in a permissionless way.

So in short, NAOS provides borrowers with easy access to cheaper capital globally and offers lenders predictable and consistent yield from income-generating assets.

4.Does NAOS have any plans to deploy on more blockchains?

Yes, actually our whole protocol is now available on the BNB chain, and the Formation main-net is also available on Ethereum, we’re planning to deploy Galaxy main-net on Ethereum later in 2022. And we’re also keeping an eye on other main-net that the ecosystem is solid that we can expand the RWA infrastructure on top of that chain.

You can also find TokenDamo on ✔

Twitter: https://twitter.com/TokenDamo

Telegram: https://t.me/tokendamo

Website: www.damolabs.com

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