nTokens

nTokens are ERC-20 tokens on nazca.money, representing user balances within the protocol. They are akin to Compound V2's cTokens, but with specific functionalities tailored for nazca.money's ecosystem. nTokens enable users to engage in lending and borrowing activities on the platform, facilitating interest accrual and asset collateralization.

Deposit and Minting of nTokens

• Minting Process: Users can deposit certain assets into nazca.money to mint nTokens. For example, depositing ETH would mint nETH.

• Asset Utilization: Deposited assets become lendable by nazca.money, earning interest for the depositor.

Earning Interest through Lending

• Interest Accumulation: Lenders earn interest by minting nTokens. The interest accumulates not through direct distribution but via the changing exchange rate of nTokens. Learn more about Nazca interest rate model.

• Redemption: Over time, as interest is earned, the value of nTokens increases, allowing users to redeem more assets than initially deposited.

Borrowing Against nTokens

• Collateralization: Borrowers can use nTokens as collateral to borrow other assets on the platform.

• Interest Offset: Collateralized nTokens continue to earn interest, which can potentially offset some of the borrowing costs.

Transferability and Restrictions

Exercise caution! By transferring nTokens, you’re transferring your balance of the underlying asset inside the Nazca protocol.

• General Transferability: nTokens are generally transferable between users, providing flexibility within the nazca.money ecosystem.

• Respecting Underlying Asset Restrictions: nTokens adhere to the transfer restrictions of their underlying assets, especially for permissioned assets.

• Liquidity Considerations: Transfers that could result in negative liquidity for borrowers are prevented to maintain the stability of the platform.