FAQ

General

What problem does Native solve?

Native addresses the issue of fragmented liquidity in DeFi by offering an intents-based cross-chain infrastructure that connects Private Market Makers (PMMs) with solvers and aggregators.

PMMs can efficiently manage and deploy liquidity across multiple chains through a unified inventory, while Native facilitates fast order execution and instant finality for solvers and aggregators through a single API integration. Liquidity providers (LPs) earn competitive returns by supplying capital to yield pools, which in turn supports the overall efficiency and connectivity of the ecosystem.

Learn more here.

What are the sources of liquidity on Native?

Native aggregates liquidity from various sources, including project-specific DEXes, market makers, and well-known aggregators such as 1inch and Paraswap. This approach ensures deep liquidity for nearly all trading pairs and leverages our unique smart order routing algorithm to provide the best possible pricing:

The algorithm scans multiple liquidity sources to identify the most advantageous path for each trade, directing orders for optimal execution. This not only enhances liquidity but also ensures users receive the most favourable prices, optimizing the overall trading experience.
By dynamically selecting the best execution routes, Native guarantees efficient and effective trading, making the most of available liquidity across the Native ecosystem.

Has Native been audited?

Yes, past audit reports can be found under the Audits section.

Will Native support other non-EVM L1s?

Not at the moment. We are currently focused on deploying and improving our pricing on various popular EVM chains.

Why Chameleons?

Chameleons change colors to blend in with their environment, adapting to stay out of sight. Similarly, Native aims to be the invisible liquidity layer that powers the Web3 ecosystem. As a foundational infrastructure protocol, our goal is for users to experience seamless transactions without even noticing our presence.

Swap

What is RFQ?

RFQ stands for "Request For Quote."

It is a trading mechanism that allows buyers and sellers to negotiate trades privately and off-exchange. In an RFQ system, a buyer requests a price quote for a specific asset or quantity from a seller. The seller responds with a quote, and the buyer can choose to accept or reject it. RFQ systems are particularly useful for large trades, as they help avoid significant price impact on the open market.

In Native Swap, the RFQ system is integrated to provide users with competitive quotes from Private Market Makers (PMMs). This ensures efficient and secure token swaps, leveraging the RFQ mechanism to enhance liquidity and optimize trade execution.

Learn more about RFQ here.

How does Native ensure superior execution for each trade?

Native Swap leverages a combination of passive and active liquidity pools, moving away from traditional discrete orders processed in a first-in-first-out manner. Instead, it integrates:

Request-for-quote (RFQ) with Private Market Makers (PMMs)
Automated Market Makers (AMMs) with liquidity (lending) pools

The Native app seamlessly connects to both RFQ and AMM models, automatically finding the most efficient route for each trade. By tapping into a larger liquidity pool, Native ensures better order matching, resulting in faster execution and more favourable prices for buy and sell orders.

Lend

What can I do with Native Lend?

Bootstrap markets

Native Lend allows token holders to stake or lend out their tokens, earning a yield. This helps bootstrap markets, especially for assets with low liquidity, by making it easier for others to open short positions.

In the future, Native Lend can help create perpetual markets by allowing market makers to remain delta neutral. They can borrow and sell tokens when forced into a long position, balancing their exposure and maintaining a stable profit and loss regardless of price movements.

Leverage on existing capital

Users can borrow against their deposited collateral to free up liquidity for buying other assets or taking short positions.

Native Lend allows users to hold onto their assets while borrowing against them. This means users don't have to sell assets they believe will appreciate in value. Instead, they can use them as collateral to borrow funds, meeting short-term liquidity needs while benefiting from potential long-term gains.

Example If $ETH holders believe in Ethereum’s long-term growth but need USD for DeFi activities, they can lend out $ETH while borrowing $USDC. This way, they retain their $ETH holdings and benefit from its future appreciation.

Interest rate arbitrage

Traders can take advantage of the differences between perpetual funding rates on DEXs and borrowing/lending rates on Native Lend to earn a yield. This strategy involves leveraging the market conditions to maximize returns from interest rate discrepancies.

How do I interact with Native Lend?

Deposit your preferred asset and amount.
based on market borrowing demand.
Use your deposited assets as collateral to borrow other assets.

Refer to the user guides for detailed steps and the Lend section for a technical description of Native Lend's features.

Is there a minimum or maximum amount to deposit?

There is no strict minimum or maximum limit for deposits; You can deposit any amount you want. However, certain assets may have supply caps that limit the total amount that can be deposited in the system at any given time. These caps are in place to ensure system stability and optimal liquidity management.

To check if the asset you wish to deposit has reached its supply cap, if any, refer to the Native Lend user interface (UI).

Why should I borrow instead of selling my assets?

Borrowing allows you to obtain liquidity without selling your assets, enabling you to retain potential upside gains. It also allows you to take short positions by borrowing tokens, selling them on a DEX, and buying them back at a lower price, thus profiting from the price difference.

How much can I borrow?

The maximum amount you can borrow depends on these key factors:

Collateral Value: The amount you can borrow is primarily determined by the value of the assets you have deposited as collateral.
Available Liquidity: You cannot borrow an asset if there isn't enough liquidity available in the system.
Health Factor: Your health factor must be within a safe range. If it falls too low, you will not be able to borrow more assets.
Collateral Parameters: Each type of collateral has specific borrowing parameters, such as loan-to-value (LTV) ratios and liquidation thresholds.

You can find detailed information on the borrowing parameters for each collateral type in the Native Lend user interface (UI).

How and when do I pay back my loans?

You can repay your loans anytime via the Native Lend user interface (UI) and selecting the loan you wish to repay.

There's no fixed due date, but it's advisable to repay small amounts periodically to maintain a healthy Health Factor and prevent liquidation risks. Regular repayments help manage accrued interest and ensure a stable borrowing environment.

Refer to the user guides for detailed steps.

In what assets can I repay my loan?

You repay your loan in the same asset you borrowed. For example, if you borrow 1 ETH, you will repay 1 ETH plus the accrued interest.

What is the Health Factor?

The health factor is a numeric representation of the safety of your deposited assets against the borrowed assets and its underlying value. The higher the value is, the safer the state of your funds are against a liquidation scenario.

Maintaining a high health factor helps protect your assets from being liquidated. Learn more about Health Factor here.

What happens if my borrow rate exceeds 100% due to price movement? Will I lose all of my collateral?

No, you will not lose all of your collateral.

Native uses incremental liquidation, which means that only a small portion of your loan will be liquidated to restore your Loan-to-Value (LTV) ratio to a healthy level. This ensures that only the necessary amount of collateral is sold to cover the outstanding debt, protecting the majority of your assets from being liquidated.

Learn more here.

Bridge

Why should I use Native Bridge?

The primary benefit of using Native Bridge is its ability to provide seamless token transfers between different blockchains, significantly reducing friction and improving user experience. In today's DeFi ecosystem, liquidity is often siloed across different blockchains, making it challenging for users to interact seamlessly with decentralized applications (dApps). Currently, users must rely on external bridges, which can create friction, reduce conversion rates, and increase communication overhead.

Alternatively, building your own bridge involves significant drawbacks:

Problem: No single bridge supports all chains and each is vulnerable to hacks or insufficient liquidity. In these cases, fallback solutions are necessary.
Solution: Native Bridge aggregates liquidity from multiple sources, ensuring continuous and sufficient liquidity for all trades. This reduces the dependency on any single bridge and enhances security.

Problem: Implementing a bridge is not enough; effective integration with DEX aggregators and decentralized exchanges (DEXs) is crucial for real benefits. Many bridges focus only on stablecoins and native currencies.
Solution: Native Bridge is designed to connect seamlessly with DEX aggregators and DEXs, providing comprehensive support for various tokens and enhancing the overall liquidity and trading experience.

Problem: Developing a custom bridge is resource-intensive and may not be feasible for many projects.
Solution: Using Native Bridge allows you to focus on your core strengths and rely on a proven, efficient solution for cross-chain transfers, saving you time, money, and resources.

Partners

How to get the API key?

Sign up on the Native app at app.native.org and navigate to the "Widgets" page to see your API key. For more details, refer to the Getting the API key guide.

How can I integrate Native to obtain optimal trading quotes?

Refer to the Swap APIs guide for integration details.

How to integrate with Native as a market maker?

Refer to the Market makers section for instructions on integration.

How can DeFi apps monetize trades using Native?

By integrating with Native, DeFi apps can announce their trade flow to liquidity providers on Native and set a revenue target for each trade. They will then get paid their respective fees while ensuring the best execution based on competitive bids from liquidity providers.

Last updated 4 months ago