Point trading's surge drove Pendle's TVL growth in 2024. As fixed-rate trading dominates TradFi, a similar DeFi market seems inevitable. Let's examine key protocols and Napier v2's architecture.
It's DeFi that can split yield-bearing assets like stETH, eETH, and sUSDe into fixed and variable rate components. Similar to discount bonds in TradFi, the original asset is decomposed into PT (Principal Token) and YT (Yield Token). While Pendle leads this space with Spectra showing notable traction, Napier v2 has announced its upcoming launch.
The key difference: Curators can permissionlessly issue and manage PT/YT on Napier v2. Recent USD0++ price drops resulted in losses for Pendle users. With PT markets on Morpho and Euler allowing USDC borrowing, PT/YT management isn't simple. Since tokenized yields spread across DeFi through lending and DEXs, having protocol operators centrally manage token selection and PT/YT issuance limits scalability. As DeFi's fixed-rate market grows toward TradFi scale, Pendle's approach of centralized token vetting becomes limiting. Multiple autonomous Curators managing PT/YT in their expertise areas removes this scaling barrier. Napier's modular architecture makes stakeholders allies rather than competitors (unlike Ethena's potential fork of Pendle). This structure lets Napier benefit from stakeholders' new token exploration, vault management, and PT/YT use case creation.
Backed by DeFi leaders like Euler(@eulerfinance , @nycbrandonn ) and Curve(@CurveFinance ,@newmichwill ) Napier will likely enable PT/YT creation for Euler vault tokens and Curve LP, plus leveraged positions using PT as collateral on Euler.
Users can bet on $NPR airdrop potential while earning yield and points. This creates opportunities for double or triple yields, though with contract risks.
We are a team of financial experts with extensive experience in both TradFi and DeFi, incubated by Fracton Ventures (@wecandaoit) in 2022. As an official curator for Napier, we specialize in PT/YT issuance and management. If your organization or project requires DeFi expertise, please don't hesitate to reach out via DM.
