Jupiter's JLP token, the largest DeFi protocol on Solana, has maintained a strong trend since its launch, and NX Finance seized the opportunity to launch Solana's revenue layer protocol, determined to bring Ethereum's existing business model to Solana. The project launched its IDO public on September 3. Unexpectedly, the price collapsed rapidly after the opening, falling by 80% compared with the public sale round. The official statement is that it was attacked by two whale with bot sales as soon as it went online, but the suspected background of the founder of NX Finance began to circulate on Twitter, questioning that this was another no-wash project. After the incident broke out, the Solana ecosystem, including Jupiter founder Meow and others, began to explore the IDO mechanism.
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ToggleIn the era of big airdrops, have NX Finance’s leveraged products become a necessity?
NX Finance is best known for its ability to leverage the JLP token, which has tripled since its launch last year. Simply put, holding this token is equivalent to going against the perpetual contract traders on Jupiter. Currently, Jupiter officially announces that the annualized return is close to 25%. Users can mortgage JLP tokens through NX Finance, lend stablecoins, and then invest in JLP to achieve leveraged holding of JLP tokens.
In addition, NX Finance also launched leveraged products for the liquidity pledge part. Users can obtain vSOL by staking their SOL in the liquid staking protocol The Vault, pledge vSOL in NX Finance, then lend the SOL, and then put the loaned SOL into The Vault protocol for pledge, in order to achieve the purpose of leveraged holding. .
Leverage will create demand for borrowing, and NX Finance also launches its own vault for lending. Although the current annualized income is average, if the agreement can explode, there may be good income opportunities.
In terms of token economics $NX the total number of tokens is 100 million, 15% of the tokens are allocated to IDO, 51% are used for community incentives, 4% are liquidity pools, and the rest are allocated to marketing, investors, and teams respectively. 10%. According to the official white paper, the biggest token empowerment of $NX is that the pledged loans can jointly share 100% of the protocol revenue. In addition, the token also has the function of a governance token, and you can enjoy protocol fee reductions after staking.
The official also disclosed that the pledge $NX tokens are expected to be airdropped by Jupiter and Solayer. Due to the length of this article, this article only provides an overview of the NX Finance protocol. JNH Alpha has provided a detailed introduction to the protocol’s specific functions, protocol revenue sources, liquidation risks, airdrop participation, JLP token revenue mechanism, etc.
The founder has participated in two new start-ups, both of which failed.
NX Finance did not disclose the team and investors behind it, but this is not a big problem for Solana ecology enthusiasts. The team behind Jupiter also maintains a certain sense of mystery. The project announced a whitelist IDO and a public sale round of IDO on September 2 and 3 respectively. The 4300 SOL shares in the whitelist were sold out within two minutes. However, perhaps due to the inactive market or limited attention to the project (the number of followers on Twitter is over 10,000), the public sale shares have not been sold out. In the end, only 8450 SOL was sold, but the official stated that the unsold tokens will be destroyed.
The $NX token faced an 80% plunge after the market opened. The official issued an emergency statement stating that the team did not dump any tokens, and pointed out that two whales used robots to sell about 500 SOL of $NX tokens as soon as the market opened. , triggering a chain reaction of subsequent panic selling. He also emphasized that all plans remain as usual and that the currency price will not affect the team. It is stated that $NX staking will be launched in October.
However, researcher 0xmcraider also revealed on Twitter that the founder behind NX Finance is named TIN Yi KUNG , and pointed out that he is actually a "very experienced founder", although all past new ventures ended without success.
He first mentioned that NX Finance had its IDO in less than two months since it started operating, which is actually a very short time in terms of DeFi protocols. Although it did not reach the official IDO target of 21,450 SOL (approximately US$2.9 million), it finally raised 8,450 SOL (US$1.1 million), which is actually very good in today's market. Converting the IDO price to 1 $NX is approximately equal to 0.2. The FDV of this token will be around 20 million US dollars, which is actually quite satisfactory.
Changing the topic, oxmeraider began to reveal information about the founder of NX Finance. His personal telegram is called Timmy, and he once shared his project, namely NX Finance, in the community of the well-known KOL Little Raccoon. When we followed the clues and found Timmy's X account UST_mean , we found that he is actually an experienced founder. He founded Furion at the end of 2022, which focused on solving the liquidity and asset utilization problems of NFT transactions. As a permissionless NFT platform, Furion's white paper writes a lot of features, but not many of them can be implemented. However, according to Twitter, the project has not continued to operate after the test network, so it will not cause retail investors to lose money. However, according to Timmy's personal Linkedin record, the project raised $1 million.
He then launched Match Finance in late 2023, a revenue aggregation protocol based on Lybra Finance. Oxmeraider said that the protocol is exactly the same as this time’s NX Finance, and the whitelist IDO was opened within two months of operation. The project raised about 375 ETH, the IDO price converted to FDV is about 5 million US dollars, and the opening price converted to 7 million US dollars. However, the currency price of the project subsequently dropped all the way, and it was not listed on any exchange. Twitter was also closed two months after TGE.
The currency issuance mechanism triggered discussions, and NX Finance finally gave up the right to mint coins.
Afterwards, Solana ecological KOL @gnarleysol said : " It seems that the launch of the $NX token did not go as planned. Apparently two whales spent a lot of money in the pre-sale. And bought it immediately after the listing! " He He also replied in the comment area: "The focus should be on designing the upper limit of purchases for each address."
Someone in the message area said that in addition to restricting purchases, the coins should be unlocked linearly as the project develops after the issuance, rather than 100% unlocking.
Jupiter founder Meow also forwarded @gnarleysol's post and said: "The pre-sale mechanism needs to be fixed. The current standards are terrible for consistency." And added that this is why they put $JUP on lauchpool, Not IDO.
NX Finance officials also responded: “We admit that we made mistakes. We welcome all constructive criticism, and if our experience draws attention to problems with Solana’s current pre-sale model, then we are happy to serve as a negative teaching material to promote change. We are committed to learning from it, improving and contributing to a better ecosystem.”
He also issued articles one after another stating that the official mints coins according to token economics. In the future, tokens airdropped to the community will be placed in the vault, and the team will abide by the schedule and never dump tokens. Finally, they also issued a document proving that they had burned unsold tokens, liquidity pool tokens and gave up the right to mint coins.
According to DeFiLlama data, NX Finance TVL has fallen 35% in seven days.
What is a perfect currency issue? The community opposes VC coins, and the result is NX Finance’s branding competition
Finally, as one of the creators who came into contact with NX Finance before IDO, the author would like to make some reflections. First of all, when the identity of the team cannot be confirmed, can the judgment be made based on the product itself?
NX Finance itself, as a leveraged DeFi protocol, can essentially increase profits for users when the points system of various pledge protocols is very competitive. For more conservative users, there is also a lending function available. In addition, the popular JLP token is not bad in terms of increasing capital efficiency, and there is still a huge DeFi market on Solana, which is why the protocol has attracted attention.
Secondly, Jimmy’s last new venture did not experience a crash when it first opened. Therefore, the author believes that this incident may be attributed to the design of the currency issuance mechanism, and cannot be concluded to be the team’s original intention.
This involves another question, as @gnarleysol posted: "How do you think people should raise funds? Assuming that venture capital does not participate, if you do not pre-sell like this, then new ventures cannot raise funds. Because if there is no way to make money , people won’t invest.”
Sometimes the emotions of retail investors in the market will drag us into a difficult puzzle. On the one hand, we complain about the huge unlocking behind VC coins, and on the other hand, we complain about the 100% unlocking of IDO. It is difficult for us to find the most perfect currency issuance model, and it is difficult to satisfy everyone. For example, is it the huge amount of unlocking that is criticized for VC coins, or is it the VC itself? If the problem lies in huge unlocking, then IDO tokens plus linear unlocking will only change the lock-up people from a group of VCs to more retail investors. To put it bluntly, the selling pressure of this situation may be greater than that of VC. After all, everyone agrees that most retail investors do not have the intention to hold it for a long time. However, I think the answer is often not black and white. This IDO incident may bring more discussion to the next new ventures with currency issuance plans.
