Key Takeaways:

‍

• Unified Liquidity: Nitro combines DEX and lending into one pool for maximum capital efficiency.
• Passive Yield: Inactive liquidity is auto-lent, earning consistent returns without manual rebalancing.
• Minimized Risk: Additional fee streams help offset impermanent loss, boosting LP confidence.

‍

What is Nitro Finance?

‍

To help you get started, we've put together a complete guide to Nitro Finance, from tokenomics, to liquidity, and more.

‍

Let's dive in.

‍

‍

Nitro Finance is an innovative decentralized finance (DeFi) protocol built on Monad that seamlessly integrates the functionalities of a decentralized exchange (DEX) and a money market into a single, unified liquidity pool. This unique approach enhances capital efficiency and simplifies the user experience in the DeFi landscape. To help you get started, we've put together a complete Guide to Nitro Finance.

‍

The Fused Trade Ledger (FTL)

‍

At the heart of Nitro Finance lies the Fused Trade Ledger (FTL), an automated market maker (AMM) structure that consolidates various DeFi activities into one platform. This integration enables users to engage in multiple financial operations without navigating between separate services.

‍

‍

Core Functionalities

‍

Nitro Finance offers a range of functionalities within its ecosystem:

‍

• Token Exchange: Users can swap assets within trading pairs, such as $NAD/$USDC, with minimal fees and the potential for 0% slippage, ensuring optimal trade execution.
• Liquidity Provisioning: Participants can provide liquidity to specific trading pairsW and earn fees from both swaps and borrowing activities, maximizing returns across all trade types within the same pool.
• Borrowing: The platform allows users to lock tokens as collateral to borrow other assets directly within the same pool, eliminating the need for separate money market platforms and simplifying the borrowing process.

‍

‍

Advantages of Nitro Finance

‍

Nitro Finance's integrated approach offers several benefits:

‍

• Mitigation of Impermanent Loss: By generating additional fees through debt interactions, the platform provides liquidity providers with an extra revenue stream to offset potential impermanent losses.
• Enhanced Capital Efficiency: Combining DEX and money market functionalities into a single liquidity pool maximizes asset utilization and reduces fragmentation, leading to a more efficient market.
• Simplified Liquidity Management: Inactive liquidity positions are automatically transitioned to lending, allowing providers to earn consistent yields without the need for constant rebalancing.
• Deepened Liquidity: The FTL attracts a diverse set of participants, including lenders and liquidity providers, increasing liquidity depth and enabling trades with minimal slippage.
• Balanced Market Dynamics: Borrowing options distribute selling pressure more evenly across price bins, stabilizing market prices and fostering continuous price discovery.

‍

Tokenomics & Utility

‍

Nitro Finance introduces a dynamic economic model built on the interplay between its native token, $NIT, and reward tokens such as xNIT and Nitro Points. This self-sustaining reward cycle incentivizes participation and drives long-term growth within the ecosystem.

‍

$NIT – Governance Token
$NIT serves as the native token of the Nitro Finance protocol. Holders have governance rights, including:​

• Deploying new trading pairs using the token reserve balance.​
• Allocating DAO grants to support ecosystem expansion.​
• Adjusting market parameters or disabling borrowing for specific pairs.​

‍

Reward Tokens
Nitro Finance employs a reward system consisting of:​

• Nitro Points: Non-transferable tokens earned through platform interactions such as liquidity provisioning, borrowing, and managing expired debts.​
• xNIT: Convertible from Nitro Points, xNIT can be exchanged for $NIT via the rewards contract.​

‍

Fee Distribution
Transaction fees are allocated as follows:​

• Liquidity Providers (75%): Rewarded for facilitating swaps, borrowing, and other interactions.​
• Treasury Fee Reserve (25%): Allocated for platform development, $NIT buybacks to reduce token supply, and enhancing xNIT backing in the rewards contract.​

‍

Explore Nitro’s roadmap on their official docs.

‍

Get started on Nitro Finance

‍

• ‍Connect to Nitro Testnet with your Backpack Wallet‍
  • Visit nitro.finance and follow the onboarding steps.‍
• Provide Liquidity & Trade – Use the testnet to explore trading pairs, LP strategies, and reward mechanics.‍
• Track Your Points – Stay active and watch for leaderboard updates and reward announcements.

‍

‍

Swapping Testnet Tokens on Nitro

‍

Navigate to the Trade tab
Swap $NIT to wMON (or any token of your choice)
Input amount and Approve

‍

‍

Provide Liquidity on Nitro

‍

Click the Liquidity button
Choose your pool (e.g., USDC/WETH)
Manage your position and Approve

‍

‍

‍

Remove Liquidity on Nitro

‍

Go to your Liquidity Position page
Select your position
Adjust settings, Approve, and Remove

‍

‍

Borrow Tokens on Nitro

‍

Navigate to the Pool page
Select your desired pair
Click Borrow
Choose:

• Bullish (borrow MON)
• Bearish (borrow WETH)
  Enter collateral amount and Approve

‍

‍

Repay Debt Position on Nitro

‍

Go to the Debt Position page
Select the position you want to repay
Choose Repay and Approve the transaction

‍

‍

Nitro Finance Airdrop

‍

As Nitro Finance grows within the DeFi ecosystem, user will be closely watching for news of a potential Nitro airdrop. While no official airdrop has been confirmed, early engagement with the Nitro testnet—such as providing liquidity, borrowing, or interacting with key protocol features—may position users for future token rewards.

‍

Similar to past DeFi projects, Nitro could use a points-based system or wallet activity snapshots to determine eligibility. To stay ahead, follow Nitro Finance’s official channels for updates on token launches, governance events, and airdrop announcements.

‍

Final Thoughts

‍

Nitro Finance advanced the DeFi sector by merging the functionalities of decentralized exchanges and money markets into a cohesive platform. Its innovative Fused Trade Ledger enhances capital efficiency, mitigates risks associated with impermanent loss, and simplifies liquidity management. As DeFi continues to evolve, Nitro Finance stands out as a promising solution for users seeking a comprehensive and efficient financial ecosystem.

‍

In a world full of copy-paste DEXs, Nitro Finance is building a smarter, faster, and more efficient future for liquidity. Whether you're a trader, LP, or DeFi builder, Nitro gives you the tools to move faster, earn more, and own a stake in the infrastructure itself.

‍

Learn more about Backpack

‍

Exchange | Wallet | Twitter | Discord

‍

‍Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Backpack. Please read our full disclaimer for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Backpack is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice.