🔺NodeFi

NodeFi utilizes:

1. Yield Capture layer via Yield Pass

2. Liquidity layer via the ATM

3. Additional external liquidity layer via AMMs for LPing

NodeFi is a new primitive combining the two infrastructure layers that MetaStreet has built. Nodes can be Proof of Work (like Bitcoin), Proof of Stake (like ETH), or Proof of Compute (like DePIN).

1. In the Yield Capture layer, a Node is deposited and then split via Yield Pass into a Yield Token (YP) and a Principal Token (DP). This allows the owner to manage their yield risk (or speculate) by retaining claims on their token emissions or selling their future claims.

2. In the Liquidity layer, the owner uses their DP to borrow the underlying emission token and reinvest it at a higher rate (Positive Carry Trade). For example, if a user can borrow at a 5% APR, but reinvest those tokens for the duration at 10% APR, they are generating 5% additional yield they previously did not have access to.

3. The final piece is the LP layer, which exists via AMMs. NodeFi's standard process is to provide liquidity to this layer for two main purposes: making Node emission rates a liquid market for retail, risk management, speculation or generating additional yield from swap fees.