# Nova Bank Decentralized Reserve Currency Protocol Based on the Algorithmic Non-Stablecoin NVB ## Introduction *** Are you looking for the next rising star in the world of blockchain and DeFi? Do you want to be part of groundbreaking innovations and explore infinite possibilities? ## *Welcome to the world of* **NovaBank!** The term **"Nova"** originates from Latin, meaning **"**new star". In astronomy, a nova refers to a star that releases tremendous energy during an explosion, illuminating the night sky and symbolizing explosive power and renewed vitality. This signifies that our project is like a rising new star, shining brightly in the blockchain and DeFi fields, representing breakthroughs, innovation, and infinite potential. **"Bank"** represents the core mission of NovaBank—to become a decentralized on-chain bank. We are committed to providing users with secure, reliable, and trustless financial services. Through innovative DeFi mechanisms, NovaBank will become your digital asset vault, carrying the mission of asset management, investment, and appreciation. **Join NovaBank and embark on a journey of financial innovation.** ***Are you ready to embrace the future?*** # Overview and Background Story of NovaBank In the vast expanse of the universe, a nova suddenly bursts into brilliance, breaking the tranquility of the starry sky and releasing an unignorable energy and radiance. This is not only an astronomical wonder but also symbolizes a force of breakthrough, rebirth, and infinite possibilities. So, in the universe of finance, who will become that captivating new star? Once upon a time, the traditional financial system was like an ancient galaxy—operating slowly and rigidly. People were bound by centralized institutions; the flow of wealth was hindered by layers of barriers, and financial opportunities belonged only to a privileged few. Then, the emergence of blockchain technology was like a cosmic Big Bang, bringing unprecedented opportunities for transformation to the financial world. In this exciting era, NovaBank has come into being. Its name is not a simple combination of financial terminology and astronomical concepts; it embodies a grand vision and mission for the future. Just as a nova suddenly illuminates the universe, NovaBank represents an innovative force rapidly rising in the world of blockchain finance. NovaBank's mission is to utilize cutting-edge ***DeFi technology*** to break the shackles of traditional finance, bringing users unprecedented financial freedom and opportunities. Based on the underlying business logic and technology of ***Olympus DAO***, and through innovative revenue models, dual-token ecosystems, and multi-ecosystem integration, NovaBank becomes a platform for users to achieve high returns and long-term growth. The explosive power and rebirth characteristics of a nova symbolize that users can continuously unlock new potential and value on NovaBank. In this more open, transparent, and fair financial ecosystem, everyone has the opportunity to take control of their own financial destiny. In ancient astrology, the birth and death of stars were seen as symbols of fate. NovaBank represents a new financial destiny—breaking the monopoly of centralized institutions, empowering users with full control over their wealth, and realizing true decentralization. NovaBank is not just a decentralized bank; it is a hub of financial innovation—a new star shining in the sky of financial technology. It carries the power of transformation, providing a more equitable and innovative financial experience for users worldwide. Are you ready to embrace this financial revolution and light up your own journey to wealth? Let us witness together as NovaBank leads the future and opens the door to infinite possibilities! # Economic Theories of NovaBank * [**Internal Coordination Theory**](/economic-theories-of-novabank/internal-coordination-theory) * [**The Relationship Between Material Economy and Digital Economy**](/economic-theories-of-novabank/the-relationship-between-material-economy-and-digital-economy) * [**Game Theory of the NovaBank Protocol**](/economic-theories-of-novabank/game-theory-of-the-novabank-protocol) * [**Applying Internal Coordination Theory to the NovaBank Protocol**](/economic-theories-of-novabank/applying-internal-coordination-theory-to-the-novabank-protocol) * [**How These Mechanisms Create an Economic Flywheel**](/economic-theories-of-novabank/how-these-mechanisms-create-an-economic-flywheel) # Internal Coordination Theory **NovaBank** represents a significant shift in the realization and implementation of economic theory applications. This transformation can be expressed as follows: In the digital economy, the economic forces of demand and supply are generalized into the forces of internal coordination and price coordination. Supply and demand relate only to price coordination, while entrepreneurship/self-organization (which does not belong to neoclassical price theory) pertains to internal coordination. The framework of internal coordination theory can explain economic productivity and intrinsic value in the digital economy, distinguishing it from the more concrete material economy. Internal coordination, as a form of economic productivity, remains underestimated, especially in relation to the digital economy. It generalizes demand by integrating labor value, utility value, and focal points into digital productivity. Internal coordination embodies the concept of demand because it balances or regulates supply and demand. Therefore, it serves as the intrinsic motivation for market participants to naturally self-correct and self-govern from within the market. The market requires an individual—an entrepreneur—to recognize and solve existing coordination problems outside of price mechanisms. This is achieved through the negotiation of social norms. The market self-regulates and self-corrects only within the scope where everyday participants negotiate internal coordination and share common-sense norms. # The Relationship Between Material Economy and Digital Economy In the material economy, what is produced are tangible, discrete goods with limited supply. The price mechanism can determine the optimal allocation of material goods because these goods are adequately measured through price-quantity standards. In the digital economy, what is generated are ideas, incentives, and infrastructure. Price is not an adequate standard for measuring these goods because they are not purely tangible, discrete, or finite, and thus cannot be measured purely quantitatively. Price is just one of many competing forms of coordination produced by the digital economy and is by no means the most decisive. The economic goods produced in the material economy are physical goods, while those produced in the digital economy are focal goods. In the absence of direct communication, focal points are the best solutions to coordination problems with minimal friction. This means communication must largely be default or implicit. The optimality of a focal point is measured by the criteria most relevant to the specific problem it aims to solve. However, all specific coordination problems and their specific criteria are aspects of the overall, objective coordination problem of human affairs. We can view the digital economy as a focal market. This is quite different from markets driven by memes or viral spread. In fact, it's the opposite. Memes are defined by imitation—the effectiveness of their mimicry, simulation, and replication. In contrast, focal points are defined by originality—how effectively they establish absolute, unique shared organization in the absence of direct communication capabilities. Focal points are the origin of memes; the latter are temporal derivatives of the former. The digital economy relates to the material economy because the former produces a distributed autonomous layer of the latter. Without self-regulation of the internal market, it is impossible to achieve an efficient material economy with optimal goods allocation. Companies cannot operate without effective and positive corporate governance. This can only be achieved through distributed negotiation of objective social norms that serve as focal points. # Game Theory of the NovaBank Protocol The NovaBank protocol is an innovation in how people interact with financial protocols. We believe that NovaBank is so problem of creating a new currency through internal coordination among different stakeholders within the protocol, without resorting to any policies enforced by a central entity. Essentially, this is an example of the Prisoner's Dilemma. The Prisoner's Dilemma is a situation where individuals' personal interests conflict with a common goal, leading players in the game to not cooperate, even though cooperation is in their best interest. We will first outline the basic elements of game theory and analyze the Prisoner's Dilemma from a purely abstract perspective. Then, we will delve into the specific components of NovaBank. NovaBank is a complex protocol that deserves an in-depth and thorough analysis. ### The Prisoner's Dilemma The first game that students of game theory learn is the Prisoner's Dilemma. This is because it is a simple game applicable to a variety of strategic situations. Once you see and understand it, you'll notice it everywhere. The story goes like this: Two thieves plan to rob a store. As they approach the entrance, the police arrest them for illegal trespassing. \ \ The police suspect that the pair intended to rob the store, but they lack evidence to prove it. Therefore, they seek confessions to charge the suspects with a more serious crime. The interrogators separate the suspects and tell them: > "We are charging you with illegal trespassing, which will get you one month in jail. I know you planned to rob the store, but I can't prove it without your testimony. Now, confess to me, and I will dismiss your trespassing charge and set you free.\ > \ Your friend will be charged with attempted robbery and face 12 months in jail. I am offering your friend the same deal. If you both confess, your individual testimonies will no longer be valuable, and you will both be sentenced to 8 months in jail." *Both players are self-interested and want to minimize their jail time.* \ ***What should they do?*** Using a payoff matrix allows us to condense all the information into an easily analyzable chart:
Player 1's available strategies are the rows (remain silent or confess), and their corresponding payoffs are the first number in each cell. Player 2's available strategies are the columns, and their corresponding payoffs are the second number in each cell. quiet ； confess ； Blue numbers represent Player 1's payoffs, red numbers represent Player 2's payoffs ； -1: 1 month of imprisonment ； -8: 8 months of imprisonment ； -12: 12 months of imprisonment；0: acquittal (no imprisonment)； #### Assumptions and Conclusions: * We assume that both players prefer to minimize their jail time. * We assume both players are selfish (i.e., they do not care about the fate of the other). * We assume there is only one interaction. * We assume the players cannot interact and plan their responses in advance. These assumptions lead to a suboptimal outcome in the game: (confess, confess), which results in (-8, -8). We can see that if both players remain silent, they would receive less jail time. However, this is an unstable equilibrium because if both believe the other will stay silent, they are tempted to confess. Therefore, (confess, confess) is the only Nash Equilibrium. A Nash Equilibrium is a state in a game where, given what the other players are doing, no player wants to deviate from their strategy. However, if both players could cooperate and remain silent, they would achieve a better outcome. This is an important conclusion because it shows that two individuals may choose not to cooperate, even though it appears to be the best strategy for both. Overcoming the Prisoner's Dilemma has significant implications for society at large and for NovaBank. We are often told that in a capitalist economy, individuals only care about their own interests, so selfish and competitive behavior is the norm, whereas cooperation is actually the best way to succeed. ### NovaBank Game Theory Explanation In the simplest NovaBank model, there are two players and three possible actions: * **Stake NVB** * **Buy Bonds** * **Sell NVB** When NVB staking rewards increase and the NVB price rises, players are more inclined to stake NVB. When players predict that staking rewards will decrease and the price will drop, they are most likely to sell NVB. When players are not significantly negatively impacted and have no clear inclination, they prefer to buy bonds (since bonds are discounted and offer arbitrage opportunities; the bond discounts will be detailed in the third part of the white paper on bond contracts). Staking NVB can push the price up by +2, while selling NVB depresses the price by -2. Players engaging in NVB trading can gain a 50% profit. Buying bonds without staking NVB does not affect the price, but because bonds are discounted, the profit is +1.
From the table above, we can see that the optimal strategy is for both players to cooperate, with both staking, resulting in a payoff of 6. If one buys bonds and the other stakes, the result is 4. Selling/staking and selling/buying bonds offset each other, resulting in a neutral payoff of 0. The worst outcome is when both players distrust each other and rush to sell, resulting in -6. Players' behavior depends on premiums, market prospects, macroeconomic environment, and a series of other factors. There's no need to pay too much attention to the size or sign of the numbers; the table is merely to illustrate the positive environment created by cooperation. Mutual cooperation yields the best results. If you don't plan to stick around for the long term, we advise you not to participate. We don't need those who sell BTC at \\$50,000 and buy back at \\$30,000. Perhaps the NVB you hold is a better BTC. # Applying Internal Coordination Theory to the NovaBank Protocol The idea that internal coordination is as important as price coordination is implemented in the NovaBank protocol. The set of rules in the NovaBank protocol essentially has three aspects: * **Staking** (Internal Coordination) * **Bonding** (Price Coordination) * **Treasury** (Reserves) This rule set is controlled by three main levers: * **Reward Rate and APY** (Internal Metric of Internal Coordination) * **Bond Control Variable** (Internal Metric of Price Coordination) * **Premium Over RFV** (Price Metric of Internal Coordination) *(RFV: Risk-Free Value; detailed explanation in Part Three of the white paper: Protocol Contracts Introduction)* Policy levers are the primary means by which NovaBank counters irrational, runaway reflexivity in self-regulating market conditions. These policy levers act as focal points, either offsetting or cooperating with external market forces to maintain internal productivity. {% tabs %} {% tab title="Staking (Internal Coordination)" %} The (3, 3) scenario is a win-win situation where both players stake their NVB tokens. As a reward for removing them from circulation, stakers receive compounded rewards based on the yield rate, which is controlled by the NovaBank policy team. The (3, 3) focal point essentially states that internal coordination—universal agreement, positive-sum, cooperative behavior—is more economically productive than price coordination—zero-sum, competitive behavior. Internal coordination forms a demand synchronization that absorbs economic value proportional to network effects. Price coordination is also a win-win equilibrium but to a lesser degree than the internal coordination equilibrium. Internal coordination is a generalization of economic demand, while price coordination is a generalization of economic supply. {% endtab %} {% tab title="Bonding (Price Coordination)" %} The (1, 1) scenario is also a win-win situation but to a lesser extent. Bonding refers to buyers purchasing NVB tokens from the protocol at a price below market value. Buyers provide another asset (stablecoins, LP tokens, etc.) to the protocol treasury in exchange for NVB tokens. The discount is determined by market forces and the bond control variable managed by the policy team. The bond control variable sets a certain bond capacity or target limit for the amount of a given asset the treasury wants to receive within a specified time. As bond sales approach the capacity limit, the bond discount decreases to ensure the treasury accumulates the appropriate amount. The price coordination equilibrium is a generalization of economic supply. {% endtab %} {% tab title="Treasury (Reserve Support)" %} Funds from bond sales enter the treasury reserves. These are reserve assets that back the value of each NVB token. **The Risk-Free Value (RFV)** is an amount of stablecoins that supports each NVB token minted and sold through bonding or reward distribution. For each NVB token minted into circulation, the treasury must contain this RFV amount of stablecoins. The metric of "Market Value per Token Backed" is composed of treasury reserves from assets other than stablecoins, so it may have greater volatility. {% endtab %} {% endtabs %} ### Policy Levers * **Staking Reward Rate:** This metric determines the number of new NVB minted for stakers. The percentage of staked NVB then determines the Annual Percentage Yield (APY). The rate of bond sales combined with the reward rate determines the supply growth rate. Every NVB token minted must be backed by one unit of Risk-Free Value. The reward rate combined with the percentage of total NVB supply staked yields the APY. The APY is the primary internal metric of internal coordination. It is inversely proportional to NovaBank's health. When NovaBank is performing well, the APY will be lower because the reward rate will be lower (indicating the protocol has existed longer), and there will be a high staking percentage (indicating long-term internal confidence). * **Bond Control Variable:** This measure is partially controlled by the policy team to incentivize the precise treasury composition that NovaBank desires. NovaBank needs to consider what types of reserve assets it wants to back the value of NVB, such as liquidity provider assets versus stablecoin assets. Each asset has different reserve backing attributes, and these attributes must be collectively weighted to achieve healthy growth and adequately stable reserve backing. The bond control variable is an internal metric of external price coordination because it sets the discount rate for purchasing directly from the protocol rather than from third-party market makers. * **Premium Over RFV:** This is not a policy lever but a market measure. The trading value of each NVB token is above the stablecoin value backing each token. This is a multiple comparable to the price-to-earnings ratio familiar to value investors. The premium is an external/price measure of internal coordination; NVB trades at a price higher than the RFV because the external market perceives effective internal coordination among NovaBank contributors. This external perception reflects investor confidence that the NVB staking ratio will remain high, contributors will continue to work for NovaBank, the protocol will expand its network to form new partnerships, and demand for NVB will remain high. Therefore, the premium over RFV is a metric of NovaBank's economic productivity and its expected future cash flows. This metric is set by the market, not directly by the NovaBank policy team, but it can be influenced by policy levers. # How These Mechanisms Create an Economic Flywheel This is an idealized prototype of the economic flywheel mechanism, intended for educational purposes rather than precise details. It intuitively illustrates how the protocol self-regulates and adjusts the incentives of the three main parties—market/bonding, stakers, and the NovaBank policy team. The model shows how the implementation generalizes the economic forces of supply and demand to match or offset runaway reflexivity in the market. *The reward rate combined with the volume of bond sales determines the rate of supply inflation.* * **Supply increases → Price decreases** * **Lower premium → Price increases** (as the price returns to the standard multiple of RFV) * **Price increases → More bonding/selling** * **Higher APY → More demand/staking** (3, 3) * **Price decreases → Lower premium** * **More bonding/selling → Higher APY** * **More demand/staking → Price increases** #### *Why is this economic flywheel a virtuous cycle?* The fundamental issue in decentralized finance (DeFi) economics is: Where does value creation in DeFi come from? What constitutes economic productivity in DeFi? What economic benefits does DeFi generate? ***The essential questions are:*** * How to break the cycle of capital flow in DeFi? * How to connect DeFi to the broader financial system? * How to elucidate the source of economic value in DeFi? Only by answering these questions can DeFi elevate from merely a degenerative art form tothe legitimate status of economically productive activity. The treasury reserve asset model or "Protocol-Owned Liquidity" model (DeFi 2.0) initiated by NovaBank provides initial answers to these questions through concepts like Risk-Free Value or intrinsic value familiar in traditional finance, albeit in a different form in DeFi. The fundamental value basis for creating the flywheel is internal coordination, which can be generalized as: * **Because internal coordination (staking) yields significant returns;** * **Then price coordination (bonding) will yield substantial returns;** * **Therefore, treasury assets (income) will grow significantly;** * **This ensures that internal coordination will yield significant returns.** This virtuous cycle relies on internal coordination as the basis of economic productivity in aspecific digital economy. The third element beyond supply and demand—internal coordination (generalization of demand)—allows NovaBank to exercise policy levers and control treasury composition to offset irrational, runaway reflexivity in market forces. This gives investors confidence that staking NVB will continue to be a profitable financial strategy. It is this third element that paradoxically breaks the vicious cycle and lays the foundation for a virtuous cycle and substantial, rational reflexivity that benefits the market. Through internal coordination, NovaBank has the ability to self-regulate and self-govern market conditions for itself and the entire ecosystem of interdependent, interoperable protocols. To have a comprehensive theory of economic productivity in the digital economy, we must have a clear description and explanation of what internal coordination (3, 3) is—as economic productivity. And we must explain why it is more important than price coordination (1, 1). The NovaBank protocol is created through internal coordination or entrepreneurship. It is an innovation of the algorithmic non-stablecoin model. Essentially, the algorithmic non-stablecoin model holds an over-collateralized basket of reserve assets, ensuring that the stablecoin maintains its peg to the US dollar by constantly correcting the market when the value is above or below its price peg.NovaBank's innovation in this model lies in creating not a stable currency but a floating-price reserve asset backed by the risk-free value of treasury assets, rather than being pegged to the US dollar. Therefore, the price of NVB can be higher than the risk-free value of its treasury-backed assets. This premium over the risk-free value can be considered a way to measure economic productivity in the digital economy. # Introduction to the Operating Mechanism of the NovaBank Protocol **NovaBank consists of six main contracts:** * [**Treasury Contract**](/introduction-to-the-operating-mechanism-of-the-novabank-protocol/treasury-contract) * [**Sales Contract**](/introduction-to-the-operating-mechanism-of-the-novabank-protocol/sales-contract) * [**Bond Contract**](/introduction-to-the-operating-mechanism-of-the-novabank-protocol/bond-contract) * [**Staking Contract**](/introduction-to-the-operating-mechanism-of-the-novabank-protocol/staking-contract) * [**Reward Vesting Contract**](/introduction-to-the-operating-mechanism-of-the-novabank-protocol/reward-vesting-contract) * [**Contribution Value Algorithm Contract**](/introduction-to-the-operating-mechanism-of-the-novabank-protocol/contribution-value-algorithm-contract) These six contracts form the basic operational logic of NovaBank. *** # Treasury Contract The treasury contract is a simple vault that holds all funds collected by the protocol. For example, if a user purchases a USDT bond, the USDT is fully received by the treasury in exchange for an equivalent amount of NVB. New NVB is minted based on the treasury's risk-free assets (RFV). (The RFV will be detailed in the Bond Contract section.) * **Total Treasury Assets:** The total value of various assets entering the treasury through bond sales, including USDT, NVB-USDT LP, etc. * **Total Treasury Risk-Free Assets:** The total risk-free value of various assets entering the treasury through bond sales. For instance, the value of USDT bonds equals the risk-free value of USDT bonds. The total value of LP bonds is greater than the risk-free value of LP bonds.Therefore, while the total treasury assets may decrease if the NVB price drops, the total treasury risk-free assets show a consistent upward trend. NovaBank stipulates that each minted NVB is backed by $1 of treasury risk-free assets. As the treasury's risk-free assets increase, more NVB will be minted. # Sales Contract According to the treasury contract, each NVB minted is anchored to 1 USDT. When 1 NVB > 1 USDT, the protocol mints and sells additional NVB. When 1 NVB < 1 USDT, the protocol buys back NVB. This anchoring is achieved through inflationary or deflationary modes. Regardless of whether the NVB price is above or below 1 USDT, the NovaBank protocol can profit. The NVB minting and buyback formulas are as follows: $$ Minting: epochMint = (TWAP – IV) \* supply*ICV*Discount\` $$ $$ Buyback: epochBurn = (TWAP – IV) *supply*DCV\*Discount\` $$ {% hint style="info" %} *TWAP: Time-Weighted Average Price;IV: NVB Backing Price;SUPPLY: Increment of treasury risk-free funds;ICV: Inflation Coefficient;*\ \ *DCV: Deflation Coefficient;Discount: Discount (The increase in treasury risk-free funds relies on bond sales, which have* discounts detailed in the Bond Contract section) {% endhint %} When 1 NVB > 1 USDT or 1 NVB < 1 USDT, the NovaBank sales contract becomes effective, and the protocol will mint or buy back NVB. Users can purchase or sell NVB directly from the protocol. The NovaBank protocol checks if the latest epoch has ended (each epoch lasts approximately 7.5 hours). If it has ended, the protocol sends a transaction request (minting or buyback) to the NovaBank treasury based on the TWAP price of NVB. If the protocol doesn't have enough NVB or USDT to fulfill the user's transaction, the remaining transaction will be completed through the NVB DEX pool. # Bond Contract NovaBank primarily sells two types of bonds: liquidity bonds and reserve bonds. ### Liquidity Bond Sales When NovaBank users trade NVB-USDT LP with the NovaBank protocol, this process is called purchasing liquidity bonds. The protocol gains ownership of the LP, and the user loses LP ownership. As compensation, the user purchases more NVB tokens at the transaction price. To purchase liquidity bonds, users must first add liquidity to the NVB-USDT trading pair to obtain LP tokens, then use these LP tokens to buy liquidity bonds. The protocol gains LP ownership and calculates the Risk-Free Value (RFV) of the LP, measured in NVB quantity. $$ RFV=（LP/Total LP）\*2sqrt(Constant Product) $$ {% hint style="info" %} {Constant Product refers to the invariant product of the LP} {% endhint %} The protocol then calculates the Executing Price of the bond, measured in NVB quantity. $$ Executing Price=RFV/Premium $$ {% hint style="info" %} {Premium≥1} {% endhint %} Premium is the bond premium determined by the system's total debt and a scaling variable, linking the bond price to the number of outstanding bonds (each bond has a 5-day vesting period). $$ Premium=1+(Debt Ratio\*BCV) $$ $$ Debt Ratio=Bonds Outstanding/ NVB Supply $$ {% hint style="info" %} {BCV is the inflation rate adjustable by the protocol}\ {Bonds Outstanding：Number of bonds not yet vested} {% endhint %} Liquidity bonds offer users a corresponding discount (ROI). The greater the discount, the higher the return rate, incentivizing users to purchase bonds. Bonds have a 5-day vesting period, after which users receive NVB tokens. This process is irreversible. $$ ROI = (NVB Trading Price \* Executing Price/ LP Actual Value - 1) $$ $$ \= (NVM Trading Price \* RVF / LP Actual Value \* Premium -1) $$ The number of bonds currently in the vesting period (Bonds Outstanding) determines the bond premium (Premium). Fewer bonds in the vesting period lead to a lower premium, higher Executing Price, higher ROI (greater discount), and stronger incentive for users to purchase bonds. Benefits of High Liquidity Bond Sales to the Protocol: * Permanently lock a large amount of liquidity in the NVB-USDT trading pair. * NVB-USDT liquidity is positively correlated with NVB price. * Higher liquidity bond premium results in lower bond discount. * Increase the treasury's balance sheet by evaluating the RFV of LP, which is always greater than $1, meaning NVB has an intrinsic backing price of 1 USDT. * The 5-day vesting period of liquidity bonds ensures the protocol can distribute profits to NVB stakers. **"Issues" with Liquidity Bond Sales:** When users purchase liquidity bonds using NVB-USDT LP, the LP becomes the treasury's asset. The treasury believes there's a significant difference between the LP's value and its market price. The treasury mints NVB based on the acquired LP while ensuring sufficient funds to back NVB. Therefore, the treasury evaluates LP at its minimum value—the Risk-Free Value (RFV). Higher premiums increase the gap between market value and RFV. For example, an LP consisting of 10 NVB and 1,000 USDT (market value $2,000) with a 100% LP share has an RFV of 200 NVB (2sqrt(10\*1,000)). The existence of RFV raises the issue of NVB minting quantity. In the above example, the protocol mints one NVB for $5 (treasury receives 1,000 USDT and mints 200 NVB), instead of minting at the backing price of $1. If the protocol needs to lock more liquidity, this NVB minting method is feasible but relatively inefficient and cannot meet the market's demand for rapid supply growth. Therefore, the protocol sells reserve bonds to address this "issue." ### Reserve Bond Sales Users purchase reserve bonds using USDT, which the protocol fully acquires. As compensation, users receive more NVB tokens than if purchased from the market. Reserve bonds offer users a corresponding discount, and have a 5-day vesting period. After the vesting period, users receive NVB tokens. The mechanism is the same as LP bonds. When users purchase reserve bonds with USDT, the protocol doesn't need to evaluate its RFV. The protocol mints NVB at 100% of the funds received. Referring back to the previous example, $2,000 worth of LP purchasing liquidity bonds mints 200 NVB, whereas $2,000 of USDT purchasing reserve bonds mints 2,000 NVB (with NVB backing price at $1). The protocol supplements LP bonds with USDT bonds, capturing the full value of USDT bonds to significantly increase NVB minting, meeting market development needs. ### Bond Summary: * Bonds do not rely on market data. The bond market is self-regulating; bond prices are determined by the number of bonds still in the vesting period. When there are few bonds in the vesting period, the bond executing price is high, and the bond unit price is low; conversely, when there are many, the executing price is low, and the bond unit price is high. Market participants choose prices they deem reasonable to buy bonds, causing bond prices to be in constant flux. * Bonds delay the market impact of new NVB supply. NVB from bonds becomes the user's disposable asset after 5 days, extending the distribution range of new NVB supply. Bond sales create quick arbitrage opportunities (buying at a discount and selling into the pool), which can increase NVB price volatility. * Bonds require less management. Bond sales are designed with a protocol-controlled discount rate that needs to be attractive enough for buyers. The discount rate is influenced by the premium; thus, the inflation rate (BCV) requires micro-management. However, USDT bond discounts are more market-driven, requiring less intervention. * Bonds are a more market-driven method to achieve protocol goals. USDT is exchanged into the treasury, and the protocol mints new NVB. Trading volume increases with rising transaction prices. # Staking Contract Staking logic is relatively simple. Staking is the primary source of income for users participating in NovaBank. It's designed to be participant-led, rewarding NovaBank consensus builders and NVB token holders. For participants, the best method is to hold NVB long-term; the protocol automatically distributes rewards and compounds interest. ### Staking and Unstaking By selecting "Stake" on the official website, participants send their held NVB into the staking contract and receive sNVB at a 1:1 ratio. sNVB is a proof of staking participation and has no other use besides holding. When users choose to unstake, they send sNVB back to the staking contract and receive NVB at a 1:1 ratio. ### Rebase The protocol directly allocates tokens to the staking contract without needing to redeem sNVB. This increases the ratio of NVB to sNVB, leading to a rebase difference. Example: When there are 100,000 NVB staked and 100,000 sNVB outstanding, and the protocol distributes 1,000 NVB as staking rewards in one day, it sends these NVB into the staking contract. The staking contract then holds 101,000 NVB with 100,000 sNVB outstanding. The supply of sNVB will increase by 1,000 (1%) to match the NVB amount. Therefore, the daily rebase yield of sNVB is 1%. NovaBank performs a rebase every 8 hours on-chain, distributing staking rewards every 8 hours. The protocol distributes rewards fairly to all stakers through sNVB, with everyone receiving the same percentage profit. The protocol automatically compounds interest; stakers don't need to claim rewards— just maintain their staking. # Reward Vesting Contract The NovaBank protocol incorporates a reward vesting contract, jointly utilizing the first ecological partner ALTERVERSE gaming platform's token Alterverse Coin (WBNB), a BEP20 token on the BSC chain. It has officially announced funding from Binance, Polygon Ventures, Gate.io, Ankr, DuckDAO, Baselayer Capital, AltcoinBuzz, Iobc Capital, and EnjinStarter, and is about to list on centralized exchanges. Users can unstake their NVB principal at any time, then choose to sell or restake. Rewards will be gradually released based on the initial vesting period, and the release speed will depend on the value of WBNB destroyed by the user. ### Accelerating NVB Staking Reward Vesting by Destroying BNB Users can withdraw released NVB staking rewards to their blockchain wallet at any time to sell or restake (restaking has the same effect as the protocol's automatic compounding). To accelerate the release speed, users will destroy a percentage of BNB equivalent to the NVB rewards. The percentages of BNB required for different release speeds are as follows:\

Notes: When the vesting speed is 150 days, burning 10% of the remaining unrelease tokens based on the value of WBNB can accelerate the vesting speed to 100 days. When the vesting speed is 100 days, burning 20% of the remaining unrelease tokens based on the value of WBNB can accelerate the vesting speed to 60 days.
- And so on.

### Periodic Buyback and Burn of NVB by the Ecological Cooperation Fund Part of the profits generated by the cooperative ecosystem developed on the NovaBank platform will be used to establish the Nova DAO fund. This portion will be used to periodically initiate the buyback and burning of NVB, empowering NVB's deflationary mechanism. # Contribution Value Algorithm Contract ### Contribution Value Weight Rewards: The daily contribution value reward pool is 73% of the total NVB rebase output across the network. $$ Daily Contribution Value Weight Reward = N \* M / Total Network $$ $$ Contribution Value M\_total \* Daily Total Network Rebase Output \* 73% $$ {% hint style="info" %} Contribution Value = (Sin(Qmax) + ∑Qi)\*3 \ (Qmax: Maximum community computing power; Qi: Community computing power i ; i (i ranges from 1 to n) (Calculated by multiplying each level by 0.9^(n-1), where n is the number of links from the current node to the original node) Weight Coefficient N = 0.00003K + 0.7(where K is the staked NVB value of this address, and when K ≥ 10,000, N = 1) {% endhint %} ### Daily New Contribution Value Rewards: Distribute 7% of the total NVB rebase output across the network daily based on the proportion of each account's new contribution value to the total new contribution value across the network. ### Contribution Value Ranking Rewards The top 99 accounts in contribution value rankings share 10% of the total NVB rebase output across the network daily, based on weight. ***Contribution Value Reward Release Rules:*** * The release rules for contribution value rewards are the same as those for staking rewards. ***Contribution Value Circulation Mechanism:*** * When an account's contribution value rewards reach 4 times the rebase amount（Personal initial staking), an equivalent amount of NVB tokens must be destroyed to continue enjoying contribution value dividend rewards. # NovaBank Internal Operation Mechanism Diagram
# Explanation of NVB Token The tokens issued under the NovaBank protocol, NVB, are minted rather than having a fixed total supply. The issuance is based on market supply and demand. There are no plans to conduct any form of fundraising prior to the official launch. NVB operates on the BSC (Binance Smart Chain). ***NVB Token Trading Rules:*** * Transaction Fees: 0% on purchases, 5% on sales. ***Fee Allocation:*** * 1%: Ecosystem operation and development. * 4%: Buyback and burn of NVB (the phased burning plan is executed through on-chain voting initiated by Nova DAO). # NovaBank Ecosystem Development Plan NovaBank is committed to building an innovative, efficient, and sustainable decentralized financial ecosystem. Below is our ecosystem development plan: * [**History of Token Economy Development**](/novabank-ecosystem-development-plan/history-of-token-economy-development) * [**Challenges Faced by DeFi 1.0**](/novabank-ecosystem-development-plan/challenges-faced-by-defi-1.0) * [**NovaBank's Important Role in the Token Economy**](/novabank-ecosystem-development-plan/novabanks-important-role-in-the-token-economy) * [**NovaBank Launches Cross-Chain Protocol**](/novabank-ecosystem-development-plan/novabank-launches-cross-chain-protocol) * [**NovaBank's Innovative Lending Product Plan**](/novabank-ecosystem-development-plan/novabanks-innovative-lending-product-plan) * [**NovaBank DEX Implementation**](/novabank-ecosystem-development-plan/novabank-dex-implementation) * [**NovaBank's Treasury Appreciation Plan**](/novabank-ecosystem-development-plan/novabanks-treasury-appreciation-plan) * [**NovaBank 3.0: A Global Integrated Financial Autonomous System Based on Algorithmic Non-Stablecoin** ](/novabank-ecosystem-development-plan/novabank-3.0-a-global-integrated-financial-autonomous-system-based-on-algorithmic-non-stablecoin) # History of Token Economy Development Blockchain and the digital virtual economy are rapidly evolving, and the token economy is continuously advancing. Tokens initially emerged from the Proof-of-Work (PoW) mechanism (represented by BTC). Later, with the support of Ethereum smart contracts, ICOs rose, allowing new projects to publicly sell their tokens. Most recently, and closest to NovaBank, is the LP liquidity mining under the DeFi 1.0 mechanism, where users provide liquidity to pools, and the protocol directly rewards them with tokens. The PoW mechanism is still used on a small scale, such as with Filecoin. ICOs have largely been abandoned by the market. Currently, most token issuances adopt the LP liquidity mining mechanism of DeFi 1.0. # Challenges Faced by DeFi 1.0 LP liquidity mining and POW mining share the same drawback: mining output is a perpetual expense without lasting benefits. LP liquidity mining is akin to renting; in the initial stages, rental costs are high (high yield high token price), making it easy for protocols to acquire liquidity. However, as rental costs decrease (reduced yield token price decline), it becomes increasingly difficult for protocols to rent liquidity, and the temporarily owned liquidity diminishes.The correct approach is to always guide and accumulate long-term, controllable value, rather than perpetually paying high interest for rented capital, as such high interest is unsustainable. Bonds change everything. Through the bond mechanism, the protocol can exchange its native tokens for assets. Instead of renting liquidity from third parties, it directly purchases liquidity. Once bonds are established, the protocol owns these assets while distributing new token supplies. # NovaBank's Important Role in the Token Economy At its core, NovaBank will become a professional service protocol, leveraging the bond mechanism to expand its business scope and influence. We will provide infrastructure, expertise, and exposure for our partners. We will help partners accumulate key infrastructure liquidity through bond sales, rather than renting third-party liquidity and paying high rental costs through liquidity mining as before. Ultimately, we assist partners in transforming value-draining perpetual expenses into revenue-generating assets, enabling healthy and rapid development. NovaBank and subsequent versions will provide customized services specifically for partners, offering an integrated front-end solution. This allows partners to quickly and easily create bonds and manage their positions within a familiar, unified user interface. Partners can spend less time on token economics and more time building excellent products. Of course, this is premised on NovaBank V1 being time-tested and developing healthily. The bond mechanism is much more complex than traditional liquidity mining. It's crucial that projects execute correctly and get it right on the first attempt. This is the key factor for partners collaborating with NovaBank. The NovaBank team comprises a professional blockchain technology team from Stuttgart and an experienced financial management team. NovaBank will gain valuable experience from multiple explicit and countless implicit data during the protocol's operation. This experience will help partners obtain passive, self-regulating bond plans. After NovaBank incubates multiple high-quality projects, we will build a unified bond market for various protocols. This market will become the default destination for investors. Such a unified bond market will be invaluable, akin to the value of being listed on an exchange. **Benefits to the NovaBank Protocol after Achieving the Above Goals:** * Protocol Treasury Receives Bond Sales Fees of 3% * Promote NVB as a Treasury Asset and Liquidity Token for Other Protocols ***Methods and Steps:*** * Offer rebates to protocols accumulating NVB or NVB-LP. * Provide co-branding opportunities to protocols using NVB as payment. # NovaBank Launches Cross-Chain Protocol NovaBank's cross-chain and efficiency solutions are as follows: ### Full-Chain Cross-Chain System By utilizing cross-chain bridge technology, we enable NVB to transfer and exchange assets and data across different blockchain networks. This expands NVB's application avenues and scenarios, creating the full-chain network value of the algorithmic non-stablecoin NVB. ### High-Efficiency, Low-Cost Performance Solutions Based on Layer 2 networks, we shift some transactions from the main chain to side chains for processing, reducing the load on the main chain and achieving more efficient transaction processing capabilities. By building scalable solutions on the main chain, we offer more application scenarios and richer functionalities. Layer 2 solutions also significantly reduce transaction costs. # NovaBank's Innovative Lending Product Plan In the fourth quarter after the project's launch, NovaBank will introduce brand-new lending products aimed at providing users with more flexible and efficient financial services. Key features include:
Unsecured Lending
On-chain unsecured loans based on user credit scores, lowering the financing threshold for users.
Token-Collateralized Lending
Support users in borrowing by pledging crypto assets, obtaining liquidity while maintaining asset appreciation.
Cross-Chain Lending
Enable asset interoperability and lending across multiple blockchain networks, enhancing asset liquidity and offering more investment choices for users.
Flexible Repayment Mechanisms


Introduce adjustable repayment plans to meet the diverse needs of borrowers.

These innovative plans will enhance the lending experience and promote the further adoption of decentralized finance.

# NovaBank DEX Implementation **NovaBank DEX** is a decentralized exchange developed based on Layer 2 multi-chain technology. Compared to other CEX/DEX platforms, NovaBank DEX offers several advantages, including higher security, lower fees, and a better user experience. Key features include: * **Decentralization:** Operating on a blockchain network means the DEX is decentralized and not owned by any single entity. This eliminates risks associated with central points of failure, such as hacking or system outages, which can lead to significant user losses. * **Security:** Since the DEX operates on a blockchain network, it provides greater security than centralized exchanges. The blockchain offers a transparent and immutable ledger, ensuring the security and tamper-resistance of all transactions. * **User Control:** DEXs allow users to maintain control over their private keys, meaning they have full control over their funds. In contrast, centralized exchanges require users to entrust their funds to the exchange's custodial wallets. * **Lower Fees:** DEXs typically charge lower fees than other CEX/DEX platforms. NovaBank has innovated upon DEX 1.0 to significantly reduce gas fees. * **Anonymity:** DEXs often allow users to trade anonymously, enabling them to maintain privacy during transactions. This is not possible with centralized exchanges, which usually require personal information and identity verification. * **Trading Experience:** By optimizing performance across all aspects, we improve various trading metrics, providing a high-speed trading experience. We've also adjusted K-line trading pairs to offer a centralized exchange-like experience, allowing trading to return to its essence. NovaBank DEX's ultimate vision is to build a permissionless, pure on-chain infrastructure that eliminates any centralized single point of failure. We aim to enhance all aspects of DEX performance and decentralize ownership, distributing it among the community's distributed members. # NovaBank's Treasury Appreciation Plan Through the development of the DeFi 2.0 upgraded protocol and the GameFi sector, the NovaBank community will establish a strong consensus. The treasury is expected to accumulate substantial funds (estimated to reach $300 million to $500 million). ***Specific Measures:*** ### GameFi Sector By selling and leasing land NFTs, a portion of the funds will be injected into the treasury to enhance asset reserves. ### NFT Trading Market Establish a fully functional NFT trading platform supporting fixed-price sales, auctions, and other modes. Transaction fees will be injected into the treasury. ### Stablecoin Lending Protocol When the NovaBank treasury has abundant funds, we'll launch a stablecoin lending protocol. The fee income from stablecoin lending will also be injected into the treasury. # NovaBank 3.0: A Global Integrated Financial Autonomous System Based on Algorithmic Non-Stablecoin The global integrated financial autonomous system based on the algorithmic non-stablecoin NVB is a new concept that combines blockchain technology with traditional financial systems. In this system, NVB serves as a bridge connecting the entire financial ecosystem, providing a foundational layer and more innovative possibilities for numerous financial services. The fundamental principle of the NVB algorithmic non-stablecoin lies in its algorithmic mechanism. To maintain price stability, every NVB minted is backed 1:1 based on the RFV (Risk-Free Value) in the treasury, ensuring the stability of NVB's value. Based on NVB, we construct a global integrated financial autonomous system, which includes: ### Lending Protocol * Treasury Reserve Lending Protocol: After the treasury receives collateral, it lends out USDT at a corresponding ratio. The income generated from this lending protocol is used for platform operations, DAO community distributions, and advanced ecosystem development. * User Pledge-Based Lending Protocol: Users can pledge valuable assets like BTC or ETH on the platform. Upon closing or settlement at maturity, they receive corresponding interest income. ### Gateway Protocol Leveraging the NVB gateway protocol, we achieve global currency exchange and circulation. Users worldwide can deposit NVB or other valuable digital currencies to obtain a bank card equivalent in digital asset value. This card can be used to withdraw corresponding national fiat currencies at ATMs globally or facilitate transactions among online platforms and offline merchants. All fees and income generated from these transactions support platform operations and development. ### NVB Payment We aim to create the world's first anonymous cryptocurrency payment tool, connecting over 95% of global payment channels. Online payments will benchmark against platforms like PayPal, while offline payments will integrate the gateway protocol to bridge bank card payment channels and various national currency exchange pathways. Using NVB for payments allows users to engage in global consumption, shopping, trade, investment, and more without barriers. ### Financial Management Protocol Through the deposit financial management protocol, users can store their valuable stablecoins and other digital currencies on the platform to earn stable returns. ### Financial Trading Platform and Derivatives Market Support the trading of NVB with traditional financial assets such as stocks, bonds, and futures. Develop derivatives like futures and options to meet diverse investment needs. ### RWA (Real-World Assets) Tokenization RWA is an innovative financial technology that digitizes physical assets using blockchain, converting them into tokens tradable in the cryptocurrency space. This technology brings traditional asset markets into the blockchain ecosystem, greatly expanding investor choices and revolutionizing the liquidity and trading methods of physical assets.Assets like real estate, artworks, and jewelry, which traditionally have low liquidity, can be efficiently traded and circulated on NovaBank through RWA tokenization. This opens up new investment channels and represents a significant future development direction in the Web3 field. Through the ecosystem construction outlined above, NovaBank aims to build an open, transparent, and fair financial ecosystem. We strive to provide innovative and efficient financial services to users worldwide, promoting financial liberalization and the prosperity and development of the global economy. # NovaBank Ecosystem Diagram
# Roadmap ## NovaBank Roadmap ### [*Phase 1: Platform Development and Initial Operations*](/roadmap/phase-1-platform-development-and-initial-operations) * **Technical Development and Launch** * **Security Audits** * **Market Launch** ### [*Phase 2: Business Expansion and Feature Upgrades*](/roadmap/phase-2-business-expansion-and-feature-upgrades) * **Enhanced Customer Service** * **DApp Feature Optimization** * **Expanded Product Features** ### [*Phase 3: Global Expansion and Ecosystem Development*](/roadmap/phase-3-global-expansion-and-ecosystem-development) * **International Market Expansion** * **Ecosystem Partnerships and Investments** * **Community Building** ### *Phase 4: Innovation and Diversified Services* * **Technological Innovation** * **Financial Product Expansion** * **Enhanced User Experience** ### [*Phase 5: Building a Comprehensive Digital Financial Platform*](/roadmap/phase-5-building-a-comprehensive-digital-financial-platform) * **Diversified Business Layout** * **Industry Leadership** * **Continuous Innovation and Growth** [***NovaBank’s Vision for the Future***](/roadmap/novabanks-vision-for-the-future) # Phase 1: Platform Development and Initial Operations **Technical Development and Launch** * **High-performance DApp:** Develop a stable and efficient trading engine, ensuring fast processing of transactions even under high concurrency to maintain system stability. * **Security System Implementation:** Introduce multi-signature and hot/cold wallet separation measures to ensure the security and privacy of user assets. * **User Interface Optimization:** Design a simple and user-friendly Web and mobile interface to enhance user experience and ensure smooth interaction. * **Core Smart Contract Testing:** Perform comprehensive testing of all smart contracts to ensure no vulnerabilities and stable operation. **Security Audits** * **Certik Audit:** Conduct a comprehensive security audit through Certik, a globally recognized auditing firm, to ensure compliance, safety, and user trust in the platform. **Market Launch** * **Brand Promotion:** Promote NovaBank through social media, community events, and industry conferences to increase brand awareness in the blockchain and DeFi sectors. * **User Acquisition:** Launch new user reward programs, trading rebates, and referral campaigns to attract early adopters and foster active trading participation. # Phase 2: Business Expansion and Feature Upgrades **Enhanced Customer Service** * **Multi-language Customer Support:** Establish a 24/7 global customer support team, offering localized assistance tailored to users in different regions and countries. * **Educational Resources:** Provide trading guides, market analysis, and instructional videos to help users better understand the platform and increase user engagement. **DApp Feature Optimization** * **Improved Trading Experience:** Optimize the matching mechanism and trading engine to offer faster transaction speeds, lower gas fees and better overall performance. **Expanded Product Features** * **Increased Data Transparency:** Offer real-time analysis and transparent reporting of on-chain transaction data to build user trust and transparency. # Phase 3: Global Expansion and Ecosystem Development **International Market Expansion** * **Establish Overseas Branches:** Set up offices and community hubs in strategic countries and regions to drive global business growth and expand international influence. * **Payment Gateway Integration:** Partner with payment service providers to enable Visa, MasterCard, and other fiat gateways for deposits and withdrawals, enhancing user convenience worldwide. **Ecosystem Partnerships and Investments** * **Strategic Partnerships:** Build partnerships with blockchain projects, payment institutions, and DeFi platforms to create a connected ecosystem and broaden NovaBank’s impact. * **Incubating Promising Projects:** Establish the NOVA Blockchain Investment Fund to support innovative and high-potential projects, fostering diverse growth within the industry ecosystem. **Community Building** * **Offline Events and Conferences:** Regularly host global blockchain conferences, workshops, and in-person meetups to enhance industry influence and community engagement. * **Community Incentive Program:** Launch token rewards and contribution-based incentives to encourage active community participation in platform development and ecosystem growth. # Phase 4: Innovation and Diversified Services **Technological Innovation** * **Decentralized Exchange (DEX) Development:** Build a multi-chain supported DEX that ensures asset security and anonymity, meeting the growing demand for decentralized trading. * **Cross-chain and Layer 2 Technology:** Explore and apply cross-chain blockchain solutions and Layer 2 scaling technologies to improve transaction performance, reduce costs, and expand platform scalability. **Financial Product Expansion** * **Wealth Management Services:** Launch products such as fixed-term savings, flexible returns, and automatic reinvestment options to meet the diverse asset growth needs of users. * **Digital Asset Lending:** Develop a lending feature based on digital asset collateral, allowing users to unlock liquidity and maximize asset utilization. **Enhanced User Experience** * **Social Trading Features:** Introduce copy trading and strategy sharing functionalities to boost user interaction and community participation, increasing user dependency on the platform. * **Personalized Services:** Utilize big data analytics to offer customized market insights, trading recommendations, and asset management strategies, creating a personalized financial experience for each user. # Phase 5: Building a Comprehensive Digital Financial Platform **Diversified Business Layout** * **Payment Solutions:** Develop a comprehensive digital currency payment system for both online and offline scenarios, offering full-spectrum payment services globally. * **Asset Management Service:** Provide professional digital asset custody, management, and growth services to meet the needs of both individual and institutional users. * **RWA (Real-World Asset Tokenization):** Tokenize real-world assets such as real estate, art, and commodities to improve their liquidity and ease of transaction, expanding NovaBank’s asset management offerings. **Industry Leadership** * **Industry Standard Participation:** Collaborate with global regulators and industry associations to promote the standardization of the blockchain and decentralized finance industries. * **Research and Development:** Establish a Blockchain Research Institute to continue investing in cutting-edge technology, maintaining a leadership position in the industry and driving the commercialization of frontier innovations. **Continuous Innovation and Growth** * **Deepening Global Strategy:** Further expand operations into more countries and regions, building a strong global brand presence and increasing NovaBank’s international influence. * **Perfecting the User Ecosystem:** Build a comprehensive digital financial platform that integrates trading, wealth management, payments, and social features to maximize user value and strengthen the internal dynamics of the ecosystem. # NovaBank’s Vision for the Future **NovaBank** is dedicated to creating an open, transparent, and decentralized financial ecosystem. Through continuous innovation and global expansion, NovaBank aims to provide efficient and accessible financial services to users worldwide, establishing itself as a leader in decentralized finance and driving transformation and innovation in the global financial markets. # Contact Get in Touch with our Community! ## Group {% embed url="" %} ## Channel {% embed url="" %} ## Gmail {% embed url="" %} ## YouTube {% embed url="" %} ## Medium {% embed url="" %} ## Twitter {% embed url="" fullWidth="true" %}