Nektar has radically changed and now positions itself as the first and leading Decentralized Infrastructure Marketplace. This design facilitates a wide range of infrastructure, liquidity and security needs for Networks, Delegators, and Operators, enabling multiple use cases.
Networks can implement various asset management scenarios, including:
Liquidity: Assets are transferred to a time-locked vault. Once the lock expires, the funds are moved to a SAFE for use by the Network. At the end of the Network’s lifecycle, the funds must return to the DAM.
Growth: Assets are transferred to a time-locked vault, and once the lock expires, the Network can withdraw the released assets. These funds do not return to the DAM.
Collateral: Assets remain in the DAM as collateral. If Operators behave maliciously, the Network manager can request assets, which are moved to a time-locked vault for dispute resolution.
In this article, we will explore a few examples of how Nektar works with different types of partners. We’ll begin with shared security, move to node licensing, and conclude with a DeFi strategy example.
Node Licensing
One effective method is through a “node sale,” where community members purchase licenses to operate client software and earn rewards in the project’s native tokens.
On one hand, setting a financial barrier to entry ensures long-term commitment from providers and allows for quality control through the license NFT. However, the license cost may limit wider participation, even among the most engaged community members who may not be able to afford it.
The delegation model overcomes this barrier by allowing anyone interested in running a node to accept an initial contribution that covers the license costs, in exchange for adjusted rewards from actual operations. By joining forces, Operators and Delegators create unique incentivization schemes that would not be achievable otherwise.
DeFi Strategy
The additional liquidity sourced through Nektar allows Networks to tap into various DeFi capabilities, from bootstrapping initial TVL to implementing more advanced strategies. For example, Networks could set up vaults to offer an initial set of rewards for their depositors.
Since a synthetic token is minted programmatically representing the flow of rewards , the protocol eliminates the need for Networks to act as token issuers or custodians of funds. Everything is managed programmatically by the protocol software according to its business logic.
Our interactions with the market reveal a strong demand for exposure to growth opportunities rather than low-risk, low-return configurations. Nektar’s design is perfectly positioned to provide active and successful projects with the potential upside, benefiting all marketplace participants.
Shared Security
Shared security, also known as restaking, involves using delegated assets as collateral across multiple Networks to generate returns from various sources. High-trust models in distributed systems and dApps can be built on top of existing infrastructure, allowing them to inherit and repurpose economic and decentralization principles of Ethereum and other blockchains.
The first step for a Network is to define a proof-of-stake service where Operators run custom node clients, and Delegators provide the stake. Then, reward terms are set, including token types, amounts, distribution rates, and commission logic. ETH can be used as the main reward token, though Networks might also offer their native tokens as additional incentives. Penalty conditions are also specified to determine if, when, and how collateral can be slashed or locked.
Once the Network is registered and whitelisted, it can participate in the on-chain marketplace. Operators browse opportunities, install Networks into their DAMs, and capture rewards. Delegators contribute by depositing the required assets, completing the matchmaking process. As a result, Operators provide validation services, and rewards are automatically distributed to all participants according to the pre-defined terms.
Conclusion
We hope you found this third article on Nektar’s fundamentals informative. We’ve explored examples of Networks that can partner with Nektar, discussing how they operate under the hood.
To learn more, visit our website at https://nektar.network for complete details.
