How Tokenizing Debts on the NELX Protocol Pools Work

When users deposit assets into the NELX liquidity pools, they are issued a corresponding amount of nToken directly into their wallets. Each type of deposited asset is uniquely represented by an nToken, such as nETH, or nBTC. These tokens not only act as a record of ownership but also accumulate interest over time, encompassing both the initial deposit and accrued earnings.

Key Attributes of nToken

• Exchange Rate Accuracy: The valuation of nTokens is based on exchange rates sourced from CryptoCompare.com, ensuring precise and trustworthy pricing.

• Asset Representation: Each nToken distinctly represents a specific deposited asset, simplifying asset management and tracking.

• Real-Time Valuation: The value of nTokens adjusts dynamically to reflect the latest exchange rate of the underlying asset.

• Withdrawal Flexibility: Users can reclaim their underlying assets at any moment by redeeming their nTokens through the protocol’s "Withdraw" feature.

• Accessible Contract Details: The addresses for nToken contracts are readily available on the Contracts page.

Future Potential of nToken

The functionality of nTokens extends well beyond representing deposits:

• Derivative Products: Future protocol enhancements may enable nTokens to support complex financial instruments such as debt obligations, total return swaps, and credit swaps.

• DeFi Ecosystem Integration: Greater interoperability with other decentralized finance protocols could further amplify the usefulness and adoption of nTokens.