Analyzing Neopin: The First DeFi Product in the Klaytn and Finschia Ecosystem, What Is the Growth Potential of Token NPT?
2024.03.04
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Analyzing Neopin: The First DeFi Product in the Klaytn and Finschia Ecosystem, What Is the Growth Potential of Token NPT?
NEOPIN has become the dApp with the highest trading volume on the Klaytn blockchain.
2024.03.04 - 09:47:36
Neopin
Navigating Web3 tides with focused insightsNEOPIN has become the dApp with the highest trading volume on the Klaytn blockchain.
Author: TechFlow
Overview: As Web3 and DeFi continue steady growth and the 2024 cryptocurrency bull market arrives as expected, low-market-cap project NEOPIN—positioned as a dedicated Web3 infrastructure tool—is aiming to bridge traditional finance and DeFi by offering greater trust and stability through its native token $NPT, underpinned by a regulated framework.
On February 16, 2024, Asia's two leading blockchain platforms, Klaytn and Finschia, announced the successful completion of their merger, officially launching the unified mainnet (Project Dragon).
This merger aims to integrate both ecosystems and assets. With Klaytn valued at approximately $820 million and Finschia at around $240 million pre-merger, the combined project now holds an estimated valuation of $1 billion.
NEOPIN is an all-in-one crypto financial platform born in South Korea—a nation renowned for its fervent retail trading culture—and provides yield farming, swap, staking, and other DeFi services on the merged L1 chain, establishing new DeFi infrastructure.
The Neopin Token (NPT) is a pivotal token within the NEOPIN ecosystem, designed to capture value across the entire ecosystem built upon the newly launched unified mainnet (Project Dragon). The merged L1 chain serves over 250 million users and will be compatible with both Ethereum and Cosmos.
NPT is currently listed on major exchanges including Huobi Global, Gate.io, MEXC Global, Bittrex Global, Bitget, and Probit Global.
This article aims to answer five key questions:
1. What are the functional utilities of NPT?
2. How should we assess NPT’s issuance and distribution plan?
3. What is the fundamental logic behind NPT’s value proposition?
4. Why does NPT consolidate the strengths of two leading Japanese and Korean traffic platforms?
5. How can we view NPT’s potential price momentum building up during the bull market?
What Are the Functional Utilities of NPT?
The NPT economy connects various crypto financial services, enabling users and liquidity providers to benefit from NPT through these services. Users can deposit virtual assets or NPT into NEOPIN’s liquidity pools, generating trading fees that promote ecosystem growth and enhance NPT’s value. The NPT economy rewards users based on their contributions to the NEOPIN ecosystem.
NEOPIN aims to build a user-centric ecosystem by establishing a sustainable token economy and allocating the majority of rewards directly to users.
NPT serves as the primary economic medium within the NEOPIN ecosystem, facilitating exchange and reward mechanisms. The NPT economy clearly defines participants’ contributions to the ecosystem and delivers corresponding rewards to contributors.
[Image]
Source: Whitepaper
NPT plays the following foundational roles throughout the ecosystem:
I. Rewards for Ecosystem Participation
The NPT economy is a system designed to incentivize organic user participation. Participants are rewarded according to their contribution to the ecosystem, with reward rates proportionally adjusted.
Staking Rewards
① Rewards scale proportionally with the amount delegated to staking products.
② Staking products offer both staking rewards and mining rewards based on users’ contributions to the ecosystem.
Liquidity Provider Rewards
① In liquidity mining, mining rewards are earned based on interest rates.
② Liquidity providers earn fees generated from user swap transactions.
③ A portion of profits from operating staking nodes is continuously traded within liquidity pools, with resulting rewards distributed as additional returns.
NPT Lock-up Rewards
① Lock-up product rewards scale proportionally with the quantity of NPT locked.
Event and Service Rewards
① Rewards are granted for participating in campaigns promoting NEOPIN service adoption.
② Maximum caps for liquidity and service mining rewards are determined by the size of liquidity pools and the NEOPIN ecosystem.
③ To preserve NPT’s value and encourage user engagement, NPT distribution will be dynamically adjusted; for transparency and reliability, distribution details will be regularly disclosed.
II. Maintaining a Sustainable Ecosystem
NEOPIN rewards user contributions to the ecosystem. Without such incentives, motivation to participate may decline, threatening the stability of liquidity pools.
[Image]
Source: Whitepaper
NEOPIN sustains a stable cycle within the NPT economy by operating services such as Swap, NFT, P2E, and S2E across its ecosystem.
- Expand multi-chain supported Swap products.
- Broaden X2E services to increase token utility.
- Establish initial liquidity pools for token buybacks.
- Utilize profits to repurchase tokens from the market.
This cyclical structure encourages user participation, maintains economic stability, and ensures sustainability through revenue generated from diverse services.
How Should We Assess NPT’s Issuance and Distribution Plan?
1. Token Issuance
A total of 1 billion NPT tokens have been issued for the NEOPIN ecosystem. To ensure long-term platform sustainability, only a small fraction of these tokens are gradually released onto the market each month.
[Image]
[Image]
Source: Whitepaper
2. Token Distribution
A portion of NPT tokens is allocated to the ecosystem to create initial liquidity pools and fund staking, mining, and service rewards, supporting the long-term operation of the NEOPIN ecosystem.
[Image]
Operational allocations incentivize the project team and are distributed based on individual contributions to the ecosystem. Reserve allocations support future ecosystem expansion beyond initial plans. Partner allocations aim to increase NPT usage through new partnerships and service development.
Lock-up periods for partner allocations may vary depending on the nature of each partnership.
Marketing allocations cover promotional expenses to actively grow awareness and participation in the NEOPIN project.
NEOPIN employs these mechanisms to manage circulating supply and has established a model designed to foster healthy price dynamics and ecosystem growth.
The Fundamental Logic Behind NPT’s Value
The emergence of decentralized finance (DeFi) aimed to solve the issue of "trust"; NEOPIN, however, seeks to harmonize trust by fully leveraging the advantages of both centralized finance (CeFi) and decentralized finance (DeFi).
NEOPIN offers innovative crypto services that resolve the paradox of user selection and potential abuse by delivering transparent, reliable, stable, and user-centric financial solutions.
CeFi platforms, including centralized exchanges, face numerous issues due to unclear management of customer funds and excessive third-party leverage, resulting in many victims. DeFi also faces challenges, such as oracle problems related to counterparty risk stemming from protocol vulnerabilities, with accumulated incidents causing significant damage.
Billions of dollars in traditional finance remain locked and unused in Web3 due to the absence of a true bridge between the traditional world and decentralized financial ecosystems.
CeDeFi stands for "Centralized-Decentralized Finance." This concept represents an emerging financial model integrating elements of both CeFi and DeFi. CeDeFi aims to combine the stability and security of centralized systems with the flexibility and transparency of decentralized systems to create a more efficient, transparent, and user-friendly financial ecosystem. Such platforms strive to deliver more stable, reliable, and compliant financial services by harnessing the strengths of both CeFi and DeFi—essentially creating "regulated DeFi."
The design of CeDeFi addresses the lack of regulation and standards in the crypto space, combining the benefits of CeFi and DeFi to provide a secure and stable platform with regulatory compliance, while preserving transparency, accessibility, innovation, and flexibility.
Although CeDeFi remains relatively new and rapidly evolving, it is expected to bring substantial benefits to the financial industry. CeDeFi platforms offer DeFi products such as liquidity mining, lending, borrowing, liquid staking, and token swaps—all available on DeFi protocols—while remaining compliant with regulatory requirements.
[Image]
Source: Whitepaper
NEOPIN is precisely such a CeDeFi platform, employing an innovative market approach to fully leverage the strengths of both CeFi and DeFi. The protocol aims to lead a new era of CeDeFi by combining the stability and security of centralized systems with the flexibility and transparency of decentralized systems.
By integrating both systems’ strengths, NEOPIN enhances user trust and stability through KYC and AML (anti-money laundering) procedures. Address-based DeFi projects are vulnerable to external security threats, whereas NEOPIN has implemented stricter security policies since its launch in January 2022, including a KYC verification system and AML guidelines.
NEOPIN offers a range of DeFi services, including staking, swapping, and liquidity mining across various cryptocurrencies—all designed with ease of use and positive user experience in mind.
Ultimately, grounded in robust security protocols and a regulated environment, NEOPIN aims to become an open blockchain platform bridging traditional finance and DeFi protocols for all users.
Why Does NPT Consolidate the Strengths of Two Leading Japanese and Korean Traffic Platforms?
On February 16, 2024, Asia's two leading blockchain platforms, Klaytn and Finschia, announced the successful completion of their merger, officially launching the unified mainnet (Project Dragon).
This merger integrates both ecosystems and assets—Klaytn valued at approximately $820 million and Finschia at around $240 million—resulting in a combined project valuation of roughly $1 billion.
[Image]
Source: Twitter
Who Are Klaytn and Finschia?
Klaytn and Finschia are backed by two major Asian tech giants—Kakao from South Korea and Line from Japan.
- Kakao: South Korea’s largest internet company, offering products such as KakaoPay, KakaoTaxi, KakaoStory, and KakaoStock, with over 44 million active users. For the three months ending December 2023, Kakao reported an operating profit of 189 billion KRW (~$142 million). Kakao founded Klaytn in 2019, and its flagship app KakaoTalk—akin to WeChat in Korea—has established strong influence in South Korea and Vietnam.
- Line: Japan’s communications giant, which once offered cryptocurrency exchange services to 80 million Japanese users and launched Finschia in 2020. Often referred to as Japan’s version of WeChat, Line holds significant market share in Japan, Thailand, and Indonesia.
The merged project will become a top-tier collaboration between South Korea and Japan. Given that both countries are highly crypto-friendly—with particularly high cryptocurrency adoption among youth—the merged L1 chain is met with high expectations.
Today, NEOPIN has become the #1 dApp by trading volume on the Klaytn chain. In the future, through exposure via Kakao and Line, NPT is poised to gain heightened attention from target audiences in South Korea and Japan—two of the world’s most active retail crypto markets.
How Can We View NPT’s Potential in 2024?
The NEOPIN team comprises members from renowned institutions such as Binance, Crypto.com, BNB Chain, and Samsung. To further establish credibility, the NEOPIN team has submitted a licensing application to the Abu Dhabi Financial Services Regulatory Authority (ADGM FSRA) and is actively involved in shaping the UAE’s first DeFi regulatory guidelines. This positions NEOPIN as a uniquely situated DeFi service provider operating under license within a traditional financial hub.
In 2023, NEOPIN was selected as a member of the Abu Dhabi Investment Office (ADIO) Innovation Program, an entity overseeing the sovereign wealth fund of the United Arab Emirates and attracting global direct and indirect investments.
In 2024, NEOPIN is striving to become the leading DeFi project on the "Project Dragon (PDT)" platform.
In summary, as a key component of Project Dragon’s DeFi infrastructure, Neopin leads in total value locked (TVL). Project Dragon is a blockchain jointly developed by South Korea and Japan—two nations with exceptionally high cryptocurrency user counts and adoption rates—making projects on this chain more likely to attract widespread attention.
By fully leveraging the strengths of both traditional finance and DeFi, NEOPIN enables all participants to securely access decentralized financial products through KYC/AML processes (with both internal and external verification), gaining comprehensive services including non-custodial wallets, various staking options, liquidity mining, and derivatives.
Currently, Neopin’s market cap stands at around $40 million—still in its early stages compared to projects with billion-dollar valuations. Yet, NEOPIN stands out as an innovative CeDeFi platform that achieves full decentralization and on-chain integration of all financial services while complying with regulations—an emerging project worthy of close attention.
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