NEPT Token

The NEPT token is the native governance and utility token of the Neptune Protocol. It serves multiple purposes within the ecosystem, including protocol governance, incentive distribution, risk management, and feature access.

Token Utility

NEPT tokens have several key utilities within the Neptune Protocol:

1. Protocol Governance

   • Staked NEPT tokens grant voting power in protocol governance

   • Different staking durations provide varying governance weights

   • Enables community-driven decision making

2. Staking Rewards

   • Users can stake NEPT tokens to earn protocol emissions

   • Rewards are distributed based on staking duration and amount

   • Longer staking periods earn higher reward weights

3. Risk Management

   • Staked NEPT can contribute to account health calculations

   • Health-weighted stake helps secure protocol positions

   • Provides additional stability to the protocol

4. Flashloan Access

   • Staked NEPT grants a user access to the flashloan feature

   • Flashloans can be used for advanced atomic trading stragies

   • Zero collateral required to used flashloans

Staking Mechanics

NEPT tokens can be staked (bonded) to the protocol for different durations, each with unique properties. When a user stakes to a select staking pool, their tokens immediately earn staking rewards and grants the user additional benefits of the selected staking pool.

Each staking pool has the following traits set at different values;

• Bonding Duration: Determines if a user was to unstake their NEPT, how long it would take for those tokens to become claimable.

• Reward Multiplier: The amount of weighted staking rewards the pool receives

• Governance Weight Multiplier: The governance weight allocated to the user based on the amount of NEPT staked to that pool

• Health Boost Multiplier: The maximum Account Health boost provided to a users selected margin account when staking their NEPT to that targeted pool and margin account.

$$\text{Account Health Boost} = \text{Account Health} \times (1 + (\text{NEPT Stake Value} \times \text{Health Boost Multiplier}))$$

• Flashloan Multiplier: The amount of value a user can flashloan from the protocol based on the value of their staked NEPT.

With each staking pool, the longer the Bonding Duration, grants the user with greater the rewards, multipliers and feature access.

Staking Pools

Staking Pool 1

• Bonding Duration: 7 days

• Reward Weight Multiplier: 1x

• Governance Weight Multiplier: 1x

• Health Boost Multiplier: 0

• Flashloan Multiplier: 0

Staking Pool 2

• Bonding Duration: 30 days

• Reward Weight Multiplier: 2x

• Governance Weight Multiplier: 2x

• Health Boost Multiplier: 3%

• Flashloan Multiplier: 0

Staking Pool 3

• Bonding Duration: 90 days

• Reward Weight Multiplier: 3x

• Governance Weight Multiplier: 3x

• Health Boost Multiplier: 3%

• Flashloan Multiplier: 10x

Staking to a Margin Account

When a user stakes NEPT to any pool, they have the option to allocate the value of the stake NEPT to any of their active margin accounts. Doing this can provide a Health Boost to the selected margin account, which increases the overall Account Health to the margin account and helps protect the account from liquidation.

A user can choose to allocate all their NEPT to a single margin account or spread it across multiple accounts. The user can also choose to reallocate their staked NEPT to another margin account at any time, without having to unstake and restake, using the rebonding process.

If an margin account with an allocated NEPT stake were to be liquidated, the NEPT is not claimed in the liquidation process, and it still protected and allocated in the staking pool for the user.

Unbonding Process

A user can choose to unstake (unbond) their NEPT tokens from the staking pools at any time. When they do a cooldown timer is allplied to the amount of NEPT they choose to unstake, which is determined by the bond duration of the staking pool they unstaked the tokens from.

Once the cooldown period has ended for any unbonding NEPT, the user can now claim their NEPT to their wallet.

During the unbonding and cooldown process, the NEPT currently unbonding does not earn any staking rewards and removes any benefits granted to the user via the selected staking pool. If a user is unbonding from a staking pool greater than Staking Pool 1, they can utilize the Cascade Mechanism to transition their staked NEPT through the staking pools and earn rewards while they wait for their NEPT to fully unbond.

Cascade Mechanism

The Cascade Mechanism is a unique feature to NEPT staking that allows a user to transition their staked NEPT from one staking pool to a lower staking pool during an unbonding process. This allows the user to earn the staking rewards and feature access of the lower pools as their NEPT moves through the unbonding process.

Once an cascade unbonding process has started, it moves the staked NEPT from the current staking pool, to the next lower staking pool and starts the cooldown timer based on the previous pool. The NEPT stays in this new pool until the cooldown timer is equivalent to the bonding period of the new pool, which then it can now cascade the NEPT down to the next staking pool. Example: A user has NEPT staked in Staking Pool 3 with a 90 day unbonding period. When the user starts the unbonding cascade mechanism, the NEPT is moved to Staking Pool 2 and the cooldown timer starts with a 90 day cooldown period. Once the cooldown timer reaches 30 days (the bond duration for Staking Pool 2), the cascade mechanism now transitions the NEPT from Staking Pool 2 to Staking Pool 1, and continues the process.

Rebonding

Rebond allows a user to move their staked NEPT from one staking pool to another, or allows them to reallocated the NEPT against any of their active margin accounts for Health Boost benefits.

A user can rebond, if they already have an active NEPT stake in any of the staking pools.

Rebonding from a lower pool to a higher pool can be done at any time, even if there is an active cooldown timer on the current NEPT stake, as long as the current cooldown timer is lower the bonding duration of the selected pool.

Rebonding from a higher pool to a lower pool actives the cooldown timer, and if they user wants to rebond again to a lower pool, they must wait until the cooldown timer is equal to the bonding duration of the lower pool.

Staking Rewards

Staking rewards are generated through token emission where new NEPT tokens are minted and distributed to the staking pools based on the total NEPT staked to each pool. Protocol governance can decide to increase or decrease token emissions to incentivize staking activity.

New NEPT tokens being minted via emission is capped by the maximum token supply, meaning the amount of NEPT that can be minted in not infinite.

NEPT rewards are issued continuously and can be claimed by a user staking NEPT at any time.

Future protocol upgrades will allocate protocol fees towards NEPT stakers for additional rewards.