Create Market

This page explains how to create a new PT (Principal Token) / YT (Yield Token) and corresponding pool (Napier AMM) on Napier.

Follow the steps below to configure and deploy your market.

Napier Markets curator is supposed to be a knowledgeable DeFi user, as monitoring liquidity on Napier requires skills, and has some risks.

Using the Curator App

Follow the steps below to launch a new market.

In the Curator App, “Create New PT & YT” and “Create Market” are integrated into a single workflow.

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Step 1: Preparation

• Access the Curator Dashboard.

• If your account is not verified, complete verification on the Verify Your Account.

• Click Create Market to begin.

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Step 2: Pool Setting (Napier AMM)

Implied APY Range defines where liquidity is concentrated within the pool.

Select a Underlying Asset

• Choose the underlying asset from the selector at the top (e.g., cUSDO).

• Click Change to switch to another underlying asset if needed.

Select a Pool

• Choose between Napier AMM and Curve AMM.

  • If you choose Curve AMM, please follow the guide on Create Market - Curve AMM.

Set the Implied APY Range

• Adjust the graph to define the expected yield range within the pool:

  • Low Implied APY：Lower bound of the targeted liquidity range

  • Initial Implied APY：Implied APY at deployment

  • High Implied APY：Upper bound of the targeted liquidity range

• This setting determines where liquidity will concentrate within the pool.

• Note: The Implied APY Band is set at deployment and cannot be changed afterward.

Advanced: Configuring the Implied APY Range

Napier provides reference materials created by the community that aggregate historical data from Pendle markets, including Liquidity Yield Ranges (Implied APY Ranges) and AMM Fee structures.

Reference: Pendle Data (Notion)

In addition, a concise framework outlining the conceptual approach to setting the Implied APY Range is available.

Reference: Computing Implied APY Range (Notion)

By referring to these data sets and methodologies, Curators have an idea to design more accurate and consistent market parameters by considering the following aspects:

1. Setting Rational Ranges Reviewing historical trading data helps identify ranges with the highest trading activity, allowing Curators to avoid unrealistic configurations and build more stable markets.

2. Optimizing Fees Understanding the relationship between Implied APY volatility and fee structure (Performance Fee / Swap Fee) enables more efficient fee models that benefit both liquidity providers and traders.

3. Positioning Through Market Comparison Comparing parameter ranges across existing markets and Curators helps determine where a new market should be positioned within the broader ecosystem.

While this data is based on Pendle’s historical performance, it is important to note that Napier AMM supports Rehypothecation and that the Napier Points Program provides incentives for YT purchases.

Therefore, Curators are encouraged not to replicate these parameters directly, but to redesign them based on each market’s asset characteristics, liquidity scale, and strategic objectives.

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Step 3: Rehypothecation Setting

Rehypothecation allows deposited funds in the pool to be redeployed into vaults. For more details, see How Rehypothecation Works.

Allocation Ratio

• Use the slider labeled “Allocate % of PT-cUSDO to a vault” to define what portion of the pool’s assets is lent to an external vault.

  • Min (ϕmin) – Minimum ratio of raw tokens to total balance.

  • Max (ϕmax) – Maximum ratio of raw tokens to total balance.

  • Target (ϕtarget) – Target ratio of raw tokens to total balance.

Select a Vault

• Click Select a vault to choose the destination vault (e.g., MEV Capital USDC).

Lock Settings

• Enabling Lock rehypothecation settings prevents any further changes to vault selection or allocation ratios.

This lock can also be activated after the market has been deployed. This design ensures transparency for liquidity providers while improving operational efficiency for advanced use cases such as PT looping.

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Step 4: PT/YT Setting

In this step, define the issuance parameters for PT and YT.

• Market name: Example: “Napier DAO npETH”

• Market description: A short description displayed to users.

• Maturity date: Set the maturity period (e.g., 1 year / 6 months / 3 months).

• Issuance cap: The maximum amount of PT/YT that can be minted.

• Resolver: The contract that retrieves the exchange rate between vault shares and the underlying asset.

  • Specify it using “Select a resolver.” If the underlying assets follow the ERC-4626 standard, use the ERC-4626 Resolver. For details, see Resolver Selection.

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Step 5: Fee Structure Setting

Configure all fees related to issuance, redemption, yield, and swaps.

• Issuance fee is a fixed-percentage fee applied to the underlying when minting new PT and YT.

• Redemption fee is a fixed-percentage fee applied when converting PT (and any associated YT, if applicable) back to the underlying.

• Performance fee (before maturity) is a dynamic percentage applied to all yield accrued (including points) by all outstanding YT.　Example: 10% on 3% APY ≈ 0.3% of notional.

• Performance fee (after maturity) is a dynamic percentage applied to yield generated by the YBTs backing matured, unredeemed PTs.

  Example: 10% on 3% APY ≈ 0.3% of notional.

• Swap fee is a dynamic percentage swap fee applied to all PT swap transactions, adjusted according to time to maturity.

  • The fee is calculated based on the yield receivable of the PT, and since YT swaps route through PT, the same logic applies.

  • This design ensures a fair fee structure across all pools — shorter maturities result in smaller dollar-denominated fees, while longer maturities incur higher ones.

  • For the detailed formula, see Calculation – Swap Fee.

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Step 6: Initial deposit amount

In this step, allocate the initial liquidity to be deployed with the pool. Specify the underlying asset (e.g., cUSDO) and deposit amount.

When you deposit the underlying as Mint & LP, the asset and its corresponding PT pair are supplied to the pool based on the Initial Implied APY.

After the deposit, you retain the YT and LP tokens.

There is no minimum initial deposit requirement in Napier AMM.

Initial deposit amount	An initial deposit amount required to launch the pool.
Deposit (Mint & LP)	Deposit (Mint & LP) Your underlying assets are converted to the required assets Some of the underlying assets are minted into PT and YT PTs are paired with underlying assets to provide liquidity YTs and LP tokens remain in your hand

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Step 7: Review Summery

Review all configuration details in the Summary Panel on the right:

• Pool

• Rehypothecation

• PT & YT

• Fee structure

• Output

Actions such as Delegate and Renounce can only be performed after market creation.

Three-Dot Menu (⋯)

Click the three-dot icon in the upper-right corner to access the following functions:

• Simulation: Simulate trading behavior using the initial liquidity settings

• Save Draft: Save the current market configuration as a draft for later editing

• Share Draft: Generate a shareable link for team review or collaboration

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Step 8: Deploy

Once all settings are complete, click Create in the bottom right corner and approve the transaction to deploy your new market.

Related Documents

Protocols

• PT & YT — Tokenized Yield: Overview of yield tokenization

• Markets — Napier AMM: Pool design, implied APY, rehypothecation, fees, and deployment.

• Markets — Curve AMM: Pool presets, minimum liquidity, fee behavior, and deployment flow.

Curation

• Verify Curator Account: Account verification steps before creating or managing markets.

• Create Market — Curve AMM: End-to-end guide to deploy a market using Curve AMM.

• Resolver Selection: How to choose and configure the right resolver for your underlying asset.

Once your Market is live, you can:

• Manage Market — Adjust rehypothecations, roles, fees, incentives, and monitor performance.

• Stack with Lending— Collateralize PT or LP tokens to achieve greater capital efficiency.

• Stack with GP Vaults — Transform into a simple, user-friendly financial package.