Napier Economics
This framework defines the overall growth model of Napier.
It helps to understand Napier’s structural growth logic and to estimate the return on investment (ROI) by identifying which initiatives should receive resources or funding depending on the situation and phase.
First, we organize the target market scale under Market Opportunity, explain Napier’s positioning and approach under Market Positioning, show the structural strength of the B2B2C model under Business Models, describe the relationship between Unit Economics and overall growth, and finally, present concrete examples of initiatives.
Definitions
Napier Markets refer to the core PT/YT and AMM components of the Napier protocol.
Investments are vertically integrated packages that combine the Protocol Layer, Connectivity Layer, and Product Layers around Napier Markets to fit real-world use cases. (E.g. IPOR Fusion PT Looping Vault available on Robinhood)
Builders are entities like asset issuers and curators, that create Investment packages through Napier’s vertical integration model.
Protocol Layers are financial engine layers that governs how capital moves and accrues yield. (e.g. AMM, Vault, PT/YT, Lending and etc.)
Product Layers are user-facing layer that combines protocol components into concrete financial products (e.g. User / Curator apps, Wallet, Mini-App, payment rails and etc)
Connectivity Laters are infrastructure layer that connects Napier products and protocols to the outside world. (e.g. Zap / Batch Call, APIs, SDKs, Webhooks, Widget and etc)
Market Opportunity
Here, we define the size of the markets Napier aims to capture.
Napier targets three concentric markets — from existing markets to potential ones:
$10B Tokenized Yield Rails (SOM)
A massive market for providing yield as “tokenized infrastructure.”
$200B On-Chain Yield Assets (SAM)
Stablecoins, RWAs, and DeFi yield assets — markets projected to reach trillions of dollars.
$2.75T Global Retail Banking (TAM)
Interest, savings, and payments — areas of daily financial interaction.
Current vs. Target Share
99% Pendle Share of SOM
Today: Pendle has captured the first share of SOM. The competition starts here.
Short-term Napier Target
Based on the market share ratio of Euler ($3B) + Morpho ($12B) vs. Aave ($75B), Napier’s near-term target is about 20% of Pendle’s market ($2B).
Market Positioning
Napier’s “Investments” package is strategically sound for two reasons:
Short-term: It provides a different value axis than existing competitors like Pendle, enabling market share capture. (I.e Pendle as mall, Napier as white-label)
Long-term: It builds integration pathways for builders such as fintechs and traditional financial institutions.
In short, Napier’s short-term and long-term approaches align concentrically.
Business Model
Napier follows a B2B2C model, similar to Shopify.
Just as Shopify grew by enabling merchants to succeed (rather than selling directly), Napier grows by helping Investments (products built by Builders) become more profitable, scalable, and sustainable.
Platform = Shopify
Platform = Napier
Merchant
Investment (Curated by Builders)
Consumer
User
Maximize LTV
Efficiency
Minimize CAC
Reach
Strengthen Retention
Resilience
When Merchants or Builders succeed, Consumers or Users naturally follow — creating both network effects and CAC efficiency.
Shopify: Merchant success → Consumers follow
Napier: Investment success → Users follow
Unit Economics and Growth Drivers
By evaluating the health of an Investment (Napier’s smallest growth unit), we can assess the soundness of Napier’s overall growth model.
In other words, measuring how strong one Investment is helps predict how Napier scales as multiple Investments accumulate.
Unit Economics (Micro Perspective)
Napier Investment Unit Economics = Efficiency × Reach × Resilience
Efficiency: How efficiently an Investment generates revenue at low cost.
Reach: How widely it is adopted by users or capital.
Resilience: How well it maintains value and competitiveness over time.
Growth (Macro Perspective)
Growth = Number of Investments × Investment LTV × Retention Coefficient – CAC Compression
Number of Investments: Quantitative expansion
Investment LTV: Sum of quality (Efficiency × Reach × Resilience)
Retention Coefficient: The rate at which capital and users circulate within Napier (rollovers, internal transfers, etc.)
CAC Compression: Reduced acquisition cost per unit as Napier scales
Relationship Between the Two
Unit Economics Formula → Defines the quality of one Investment
Growth Formula → Defines total growth when multiple Investments accumulate
Insights
Each layer’s initiatives differ in scope and timing.
Rather than chasing short-term improvements, focus on which levers drive Napier’s compounding structure.
Product Layer → Immediate efficiency lever
UX and functionality optimization reduce friction in liquidity and user flow.
→ Impacts Efficiency / Retention
Economics Layer → Improves Investment quality
Incentive and reward optimization aligns Builder and Curator behavior.
→ Impacts Efficiency / Resilience
Distribution Layer → Expands reach and network effects
Integrations with wallets, fintechs, and apps accelerate adoption.
→ Impacts Reach / CAC Compression
Governance Layer → Ensures systemic stability
Token design, fee switch, and curator evaluation enable self-balancing mechanisms.
→ Impacts Resilience / Trust
Example Initiatives
Product Layer — Improve functionality and UX
Goal: Reduce user/builder friction while enhancing efficiency, reach, and retention.
Liquidity efficiency improvements (e.g., AMM)
Cross-Investment UX optimization (by maturity, asset, strategy, curator platform, or chain)
→ Impacts Efficiency / Retention
Economics Layer — Optimize reward and distribution structures
Goal: Align incentives to improve Investment sustainability and quality.
Incentive/Integration layering (Lending, Vault integrations)
Per-Investment optimization of Curator Fee Rate and Points Multiplier
→ Impacts Efficiency / Resilience
Distribution Layer — Expand access and connectivity
Goal: Broaden adoption and accelerate network effects.
Wallet / Fintech / App integrations (SDK, API)
External routing optimization
Curator platform integrations
Asset expansion
Builder-led go-to-market strategies
→ Impacts Reach / CAC Compression
Governance Layer — Optimize macro-level structure and rules
Goal: Improve systemic relationships and allocation mechanisms.
Napier Points adjustment, Fee Switch, Buyback Engine
Curator evaluation model design
→ Impacts Resilience / Institutional Trust
Summary
Napier Economics is not a checklist of actions, but a blueprint for identifying which structural levers drive which types of growth.
The four layers — Product / Economics / Distribution / Governance — function as independent growth levers while collectively forming Napier’s compounding structure.
By understanding this system, teams can align product development, economic design, partnership expansion, and governance operations under one coherent growth equation.
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