Leading Liquidity Protocol in the Sui Ecosystem: In-depth Analysis of Navi Protocol

Navi Protocol, as the first native one-stop liquidity protocol in the Sui ecosystem, functions similarly to Aave on Ethereum. The protocol currently offers lending services for SUI and USDC, with plans to expand to assets like WBTC and WETH in the future. Navi Protocol's total locked value has reached $3.18M, growing by 47.62% compared to last week, accounting for 80% of the total locked value in Sui ecosystem lending services. The protocol employs a hybrid oracle mechanism combining DEX and CEX, and provides cross-chain services through Wormhole.

In terms of financing, Navi Protocol has received support from multiple well-known institutions, and the specific amount of financing has not been disclosed.

Navi Protocol's lending services are primarily aimed at two types of participants: depositors and lenders. Lenders need to provide collateral and pay interest, and liquidation will be triggered when the value of the collateral falls to a certain level. Depositors earn returns by depositing assets, and these returns come from the portion of interest paid by lenders. The protocol's interest rate adjustment mechanism is based on liquidity utilization rate; generally, the higher the liquidity utilization rate, the higher the interest rate, and there are inflection points for interest rate changes.

Compared to lending protocols on other public chains, Navi Protocol has unique advantages in liquidation. It uses the CLOB (decentralized central limit order book) Deepbook of the Sui chain for liquidation, a mechanism that can significantly reduce latency and gas fees.

In the future, Navi Protocol plans to launch a Pro version, which will include the isolation pool feature. These isolation pools are mainly aimed at long-tail assets with lower liquidity and will require community governance approval before going live. It is expected that isolation pools may set borrowing limits and restrict borrowing assets.

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

Overall, while Navi Protocol has not made disruptive changes to mainstream lending protocol models, its isolated pool system fills the gap in the market for low liquidity token lending, while also ensuring security. As a major lending protocol in the Sui ecosystem, Navi Protocol demonstrates strong competitiveness, and its future development is worth looking forward to.