Napier Pool
Napier Pool is built on top of Curve Finance.
Last updated
Napier Pool is built on top of Curve Finance.
Last updated
Existing AMMs like Curve, Uniswap, and Balancer, not including time functions, are unsuitable for handling tokens like those with maturity dates.
Napier AMM is suitable for handling such tokens.
The AMM curve changes to account for yield accrued over time and narrows PT’s price range as it approaches maturity. By concentrating liquidity into a narrow, meaningful range, the capital efficiency to trade yield is increased as PT approaches maturity.
Furthermore, Curve Factory pools can be used to facilitate PT and YT trades. In Napier Pool, various PTs can trade directly with underlying assets, and various YTs trading is possible through flash swaps.
This means there's no need to worry about liquidity fragmentation by creating entirely separate liquidity pools.
To understand Napier Pool, we need to know about three main types of pools.
Base Pool
Napier MetaPool (Time-dependent Metapool)
Curve MetaPool
Base Pool is the simplest pool created on Curve Finance for two or more fixed term assets like PT and YT.
An example of a Napier base pool is ETH LSD 3Pool, which contains the tokens PT-stETH, PT-rETH and PT-frxETH.
Napier pool is a time-dependent AMM directly connecting to Curve pools, using a nested AMM structure to facilitate yield trading between various PTs, YTs, and their underlying assets.
Fixed-term assets with a maturity date have price changes dependent on time. Therefore, Napier Pool was set up to offset loss from time-value changes in base pool's LP tokens.
Napier pool is created with pairs of underlying assets (ETH) and base pool's LP tokens, like ETH LSD 3Pool (PT-stETH, PT-rETH , PT-frxETH).
At launch, the assets that can be handled in the Napier pool are strictly limited to quality yield sources.
MetaPool is a nested pool structure concept was proposed by Curve Finance, where one token can seemingly trade with another base pool.
Thanks to the Napier Pool, pairing with the base pool's LP tokens enables listin g any fixed-term asset on Curve Finance, just like stablecoins (e.g. FRAX) or volatile assets (e.g. ETH).
For example, We could create, a pair of PT-swETH and base pool's LP tokens, like ETH LSD 3Pool (PT-stETH, PT-rETH , PT-frxETH).
In this example, users could seamlessly trade PT-swETH (also YT-swETH) between the three tokens in ETH LSD 3Pool and underlying assets(ETH).
