Leading Liquidity Protocol in the Sui Ecosystem: Navi Protocol Analysis

Navi Protocol is the first native one-stop liquidity protocol in the Sui ecosystem, providing users with comprehensive lending services. This protocol currently supports lending for SUI and USDC, with plans to expand to other crypto assets such as WBTC and WETH in the future.

As the main lending platform in the Sui ecosystem, the total locked value of Navi Protocol has reached $318 million, a 47.62% increase from last week, capturing 80% of the Sui lending service market. The protocol uses a DEX+CEX mechanism as an oracle and provides cross-chain services through Wormhole.

The lending service of the Navi Protocol mainly targets two types of participants: depositors and borrowers. Borrowers need to provide collateral and pay interest, while depositors earn returns by depositing funds into the corresponding asset pool. The interest rate is dynamically adjusted based on the utilization rate of funds; generally, the higher the utilization rate, the higher the interest.

It is worth noting that Navi Protocol has made innovations in its liquidation mechanism. It will utilize the decentralized central limit order book Deepbook of the Sui chain for liquidation, a design that is expected to bring lower latency and gas fees.

In the future, Navi Protocol plans to launch a Pro version, which will include the isolated pool feature. This feature is mainly aimed at low Liquidity long-tail assets, adopting an isolation strategy that requires approval from community governance before it can be launched. It is expected that the isolated pool may set constraints such as lending limits and restrictions on lending assets.

Although the Navi token has not been listed yet, according to its white paper, the token will support functions such as staking, voting, and protocol profit distribution. Staking Navi tokens will also grant voting rights for asset pool profit distribution and DEX trading discounts.

Overall, while Navi Protocol has not made disruptive innovations to the existing lending protocol model, its isolated pool design fills the market gap for lending low liquidity tokens, while also ensuring security. As a leading lending protocol in the Sui ecosystem, Navi Protocol demonstrates strong competitiveness and development potential.