Emerging Liquidity Protocol in the Sui Ecosystem: An Analysis of Navi Protocol

Navi Protocol is the first native one-stop Liquidity protocol in the Sui ecosystem, functioning similarly to lending platforms on other public chains. Currently, Navi Protocol mainly provides lending services for SUI and USDC, with future plans to expand to assets such as WBTC and WETH. The protocol adopts a combination of DEX and CEX oracle mechanisms and offers cross-chain services.

Recently, the total locked value of the Navi Protocol has reached $3.18M, an increase of 47.62% compared to last week, accounting for 80% of the total locked value of Sui lending services, indicating a strong growth momentum.

In terms of lending services, the main participants of Navi Protocol include depositors and lenders. Lenders need to provide collateral and pay interest, while depositors earn returns by depositing funds into the corresponding asset pool. The interest rate of the protocol is dynamically adjusted according to the utilization rate of funds; generally, the higher the utilization rate, the higher the interest rate.

It is worth noting that Navi Protocol has made innovations in its clearing mechanism. As it is built on the Sui chain, the protocol will utilize Sui's decentralized central limit order book, Deepbook, for clearing, which may lead to lower latency and gas fees.

In the future, Navi Protocol plans to launch a Pro version, which will include the isolation pool feature. This design is mainly aimed at low Liquidity long-tail assets and requires approval from community governance to go live. It is expected that the isolation pool may set measures such as borrowing limits and restrictions on borrowing assets.

Although the Navi token has not yet been listed, according to its white paper, future token holders will be able to participate in staking, governance voting, and receive a share of the protocol's earnings. Staking Navi tokens will also grant holders voting rights on the distribution of asset pool earnings, as well as discounts when trading on the DEX.

Overall, although the Navi Protocol has not made any disruptive innovations to traditional lending protocol models, its isolated pool design fills the gap for some low liquidity token lending in the market while ensuring security. As a major lending protocol in the Sui ecosystem, the Navi Protocol shows great development potential and is worth the market's continued attention.