FAQ

General

What is Neverland?

Neverland is a decentralized non-custodial liquidity protocol where users can participate as suppliers, borrowers, LP stakers, or governance participants through DUST locking. Suppliers provide liquidity to the market while earning interest, and borrowers can access liquidity by providing collateral that exceeds the borrowed amount. LP stakers can earn protocol-directed incentives for supporting liquidity pools involving the protocol token, with allocations determined through governance by veDUST holders.

How do I interact with Neverland?

Neverland is completely permissionless, meaning anyone can access it. Users can interact with Neverland through a user-friendly interface or directly with its smart contracts on supported blockchain networks. This openness also enables the creation of third-party services or applications that integrate with the protocol.

To interact with the Neverland Protocol, simply connect your crypto wallet and supply your preferred asset and amount. Once supplied, you'll earn passive income based on market borrowing demand. Additionally, your supplied assets can be used as collateral, enabling you to borrow other assets.

Do I need a wallet to interact with Neverland?

Yes, you need a wallet to interact with Neverland. To interact with Neverland, you need a wallet on the corresponding network such as a hardware wallet, browser extension, mobile wallet, multi-signature wallets, among others.

When interacting with the Neverland Protocol interface, wallets are connected using methods such as mobile wallets (Family), browser wallets (MetaMask, Rabby, etc.), WalletConnect, and more. These connection methods are utilized to prompt for messages and transactions to be signed in the connected wallet.

What is the cost of interacting with Neverland?

Interacting with the Neverland Protocol requires transactions on the blockchain network it is deployed on. These transactions may incur gas fees, which are non-refundable network transaction fees determined by the network status and transaction complexity. The connected wallet will ask you to confirm the gas fee when signing a transaction.

Can funds be frozen?

No central entity has the authority or ability to freeze or alter individual user positions within the Neverland protocol. Users maintain complete self-custody of their funds, and there is no mechanism for freezing or modifying individual positions by any entity.

Risk Management Controls: While individual positions are untouchable, the protocol includes specific risk management functions designed to safeguard the overall system. These functions are strictly limited to broader protocol actions and do not extend to individual user positions:

Emergency Admin Role: the EmergencyAdmin role can pause specific reserves for purposes of risk management. However, even this action is limited to the reserve level and does not allow for freezing or altering individual positions. These roles are designed to protect the integrity of the protocol as a whole and do not have the capability to interfere with or directly manage individual user funds.

Why do I need to approve tokens?

Approving tokens is a necessary step when performing actions that involve transferring tokens to a smart contract, such as supplying and repaying tokens to the Neverland Protocol. If a token approval is required, the frontend interface will prompt users to perform the approval with one of the following methods:

Transaction: a transaction is an onchain action that requires gas fees and time to confirm. You will be prompted to approve/pay for the gas fee to facilitate the transaction.

Signature: when a signature approval is required to transfer tokens, you will be prompted to sign a message with the same wallet making the transaction.

Which assets can I supply and borrow?

The main market lists thirteen reserves. Eight are borrowable: WMON, WBTC, cbBTC, WETH, AUSD, USDC, USDT0 and XAUt0. Four are supply and collateral only: sMON, shMON, gMON and earnAUSD. loAZND is a thirteenth reserve in wind-down: it is frozen, so no new positions can be opened against it. Every address, together with the current parameters, is listed on Smart Contracts.

Does Neverland have more than one market?

Yes. Alongside the main market, Neverland runs isolated pools for Pendle Principal Tokens. Each isolated pool has its own Pool contract, oracle and reserve tokens, so a position in one pool is entirely separate from a position in another and the two are never netted against each other. The live pools and what isolation means for a position are covered under Isolated Markets on Smart Contracts.

Risk

What are the risks involved in using Neverland?

No platform can be considered entirely risk-free, but extensive steps have been taken to minimize the risks as much as possible - Neverland runs neverland-lending-core 1.1.0, a lending core derived from battle-tested open-source code with Neverland's own improvements and security patches applied, and it has been audited; the reports and their scopes are listed on Security. Different risk categories are explained in detail below.

Smart Contract Risk: Smart contract risk involves the potential for bugs or vulnerabilities within the Neverland Protocol code or the underlying reserve tokens.

Oracle Risk: Oracle risk arises from the reliance on third-party data providers for price feeds and other external data such as the redemption ratio for liquid staking tokens. Neverland prices every active reserve through Chainlink feeds, read via the AaveOracle contract. One reserve, loAZND, is an exception: it is frozen and priced by a governance-set feed while positions are unwound. If an oracle fails or is compromised, it could lead to incorrect valuations of assets.

Collateral Risk: Collateral risk pertains to the value and stability of assets used as collateral. The inability to liquidate collateral due to rapid decrease in value or insufficient external liquidity can result in bad debt.

Network Risk: Network risk involves the potential issues related to the underlying blockchain networks upon which the Neverland Protocol operates. These risks include congestion, censorship, or security vulnerabilities.

Supplying & Earning

How do I supply?

Browse to the "Supply" section and click on "Supply" for the asset you want to supply. Select the amount you'd like to supply and submit your transaction. Once the transaction is confirmed, your supply is successfully registered and you begin earning interest.

Supplying an ERC-20 reserve requires a token approval from your self-custodial wallet, performed with either a transaction or a signed message before the supply. Supplying native MON does not: it is routed through the gateway contract as value on the transaction, so there is no allowance to set.

How much can I earn?

Suppliers receive continuous earnings that evolve with market conditions. Suppliers share the interests paid by borrowers corresponding to the average borrow rate times the utilization rate. The higher the utilization of a reserve, the higher the yield for suppliers.

You can find the current supply rate for each token in the Markets tab of the Neverland Protocol Interface.

Are there limitations to supply?

There is no minimum amount to supply. However, markets may have a supply cap parameter which limits the total amount that can be supplied of a particular asset.

Where are supplied tokens stored?

Supplied tokens are stored in publicly accessible smart contracts that enable overcollateralized borrowing. Neverland's lending core has been audited by third parties; the reports and the scope each one covers are listed on Security.

How do I withdraw?

Withdrawing from the Neverland Protocol occurs on the Pool smart contract. Withdrawal transactions can be performed through the Neverland Interface by navigating to the "Dashboard" section and clicking “Withdraw.” Select the amount to withdraw and submit the transaction.

You need to make sure there is enough liquidity (not borrowed) in order to withdraw; if this is not the case, you need to wait for more liquidity from suppliers or borrowers repaying.

Can I opt-out of my asset being used as a collateral?

Yes. After supplying your assets, you are able to unselect the asset so that it will not be used as collateral. The opt-out is available in the "Supply" section within your dashboard. Simply switch the "use as collateral" button on the asset you would prefer to opt-out from being used as a collateral.

You can withdraw your assets without opting out of using them as collateral, as long as those funds are not actively being used to borrow and provided the withdrawal amount would not cause a liquidation on your borrow positions.

What are wrapped Neverland tokens?

Every nToken has an optional ERC-4626 wrapper, named with a wn prefix, such as wnWMON. Wrappers exist because nToken balances rebase as interest accrues, which some integrations and accounting systems cannot handle. Wrapping is optional and does not change your underlying supply position.

Why does my wrapped token balance never grow?

That is what the wrapper is for. An nToken balance rises as interest accrues. A wrapped balance stays fixed and the value per token rises instead, so the same interest reaches you through the exchange rate rather than through a growing number of tokens.

Why can I supply sMON but not borrow it?

Four reserves are supply and collateral only: sMON, shMON, gMON and earnAUSD. Borrowing is disabled on them, but they still earn supply interest and DUST incentives, and they still count toward your borrowing power against the assets that are borrowable. loAZND is not one of these: it is frozen and in wind-down, so it accepts no new supply and its collateral parameters have been reduced to the protocol floor.

Borrowing

How do I borrow?

Before borrowing you need to supply approved asset to be used as collateral (check out the Supplying & Earning FAQ section for more info). After this, you can execute a borrow from the Neverland smart contracts or a user interface. On the Neverland Interface, head to the Borrow section and click on “Borrow” for the asset you want to borrow. Adjust the amount you need based on the available collateral balance, and confirm the transaction in your wallet.

How much can I borrow?

The maximum amount you can borrow depends on the value you have supplied, the available liquidity, and the asset borrow cap. For example, you can’t borrow an asset if there is not enough liquidity or if your health factor doesn’t allow you to.

Why would I borrow instead of selling my assets?

Selling your assets means closing your position on that particular asset. Hence, if you are long on the asset, you would not be entitled to the potential upside value gain. By borrowing you are able to obtain liquidity (working capital) without selling your assets. Users are mainly borrowing for unexpected expenses, leveraging their holdings or for new investment opportunities.

How do I repay my borrow position?

Borrow positions can be repaid through Neverland smart contracts or a user interface. On the Neverland Interface, go to the Borrowings section of your dashboard and click on the "Repay" button for the asset you borrowed and want to repay. Select the amount to repay and confirm the transaction.

How much would I pay in interest?

The interest rate you pay for borrowing assets depends on the supply and demand ratio of the asset and interest rate curve parameters. You can find the current borrow rate for each borrowable token in the Markets tab of the Neverland Interface.

When do I need to pay back the borrow position?

There is no fixed time period to pay back the borrow position. As long as your position is properly collateralised, you can borrow for an undefined period. However, as time passes, the accrued interest will grow making your health factor decrease, which might result in your supplied assets becoming more likely to be liquidated.

What is E-Mode?

E-Mode raises your borrowing power when your collateral and your debt are correlated, for example stablecoin against stablecoin. It applies to your whole account within a market rather than to a single asset, and you can be in only one category at a time. The categories and their parameters are on Efficiency Mode.

Why can't I borrow against my PT collateral?

In each isolated Pendle pool the Principal Token is collateral only, and the settlement asset is the only reserve that can be borrowed. In the PT-shMON pool that means you supply the PT and borrow WMON. The settlement asset in turn is never usable as collateral, which is what keeps the pool's risk contained.

Liquidations

What is Health Factor?

Health factor is the numeric representation of the safety of a borrow position, calculated as:

Total Collateral Value * Weighted Average Liquidation Threshold / Total Borrow Value

Liquidation Threshold is a parameter for each collateral asset, and it is the point at which a position becomes eligible for liquidation. It is not the same as Loan-to-Value (LTV), which caps how much you can borrow when you open a position. LTV is always the lower of the two, and the gap between them is your buffer. A health factor below 1 represents a borrow position that is eligible for liquidation.

For example, if you supply $10,000 of WETH, which has a 75% liquidation threshold, and borrow $6,000 of USDC, your health factor = 10000 * 0.75 / 6000 = 1.25.

What happens when my health factor is reduced?

Depending on the value fluctuation of your supplies, the health factor will increase or decrease. If your health factor increases, it will improve your borrow position by making the liquidation threshold more unlikely to be reached. In the case that the value of your collateralised assets against the borrowed assets decreases, your health factor is also reduced, resulting in increased liquidation risk.

What are liquidations?

A liquidation is a process that occurs when a borrower's health factor goes below 1 because their collateral value does not properly cover their borrow value. This can happen when the collateral value decreases and /or when the borrow position value increases beyond the liquidation threshold of the collateral assets.

In a liquidation, part of the borrower's debt is repaid and that value plus the liquidation bonus is taken from the available collateral. While the health factor is above 0.95, a liquidator can repay up to 50% of a single borrowed asset. Once the health factor falls to 0.95 or below, that cap rises to 100% of the borrowed asset being repaid, so a single liquidation can clear one debt position in full rather than half of it. Each liquidation targets one borrowed asset, not the whole multi-asset position.

Liquidations are a permissionless feature of the Neverland Protocol. If a borrow position has insufficient collateral to cover the liquidation threshold, then any address on the network is able to initiate a liquidation transaction.

How much is the liquidation penalty?

The liquidation penalty (or bonus for liquidators) depends on the asset used as collateral.

Can you give an example?

Example 1

Peter supplies $10,000 of WETH and borrows $6,000 of USDC. WETH has a 75% liquidation threshold, so his health factor is 1.25. If the price of WETH falls far enough for his health factor to drop below 1, the position becomes eligible for liquidation. With the health factor still above 0.95, a liquidator can repay up to 50% of the borrowed asset, so $3,000 of USDC. WETH carries a 10% liquidation bonus, so the liquidator claims $3,300 of Peter's WETH for repaying $3,000 of USDC.

Example 2

Wendy supplies $5,000 of WETH and $4,000 of WMON, and borrows $5,000 of USDT0. If her health factor drops below 1 while staying above 0.95, a liquidator can repay up to half the USDT0 debt, so $2,500. The liquidator chooses which collateral to seize, and WMON carries a 15% liquidation bonus against WETH's 10%, so the rational choice is WMON. The liquidator claims $2,875 of Wendy's WMON for repaying $2,500 of USDT0.

The bonus is the cost of being liquidated: in both cases the borrower loses the bonus percentage of the seized collateral on top of the debt that was cleared.

What is a good health factor?

Health Factor represents the ratio of collateral to borrow value. There is not an exact answer as to what constitutes a "safe" health factor as it depends on the volatility and correlation of collateral and borrow asset prices.

Each collateral and borrow asset has a corresponding oracle that reports the price of the token with respect to a base currency (typically USD). In general, if the collateral and borrow assets are highly correlated with respect to the base currency (such as supplying and borrowing only stablecoins, or only MON-correlated assets such as WMON, sMON, shMON and gMON), a lower health factor can be considered safe compared to a position where assets are not correlated.

What is my liquidation price?

The liquidation price of an account is a point at which the balances and oracle prices of the collateral and borrow positions results in a health factor < 1.0. Health factor depends on the balances and oracle prices of all collateral and borrow tokens, so liquidation price is not a single point, it is a curve of combinations.

How can I avoid getting liquidated?

To avoid liquidation you can raise your health factor by supplying more collateral assets or repaying part of your borrow position. By default, repayments increase your health factor more than supplies. Also, it's important to monitor your health factor and keep it high to avoid a liquidation. Keeping your health factor over 2, for example, gives you more of a margin to avoid a liquidation.

You should be mindful of stablecoin price fluctuations due to market conditions and how it might affect your Health Factor. For example, the market price of USDC 1.00 might not equal exactly USD 1.00, but USD 0.95, for example. The price fluctuations of stablecoins, like any assets, affects your Health Factor.

What happens to a Pendle PT position at maturity?

A Principal Token is priced at a discount to its settlement asset, and that discount shrinks as maturity approaches. At maturity it reaches zero and the PT prices one for one with its settlement asset, so a PT position strengthens as it ages rather than decaying. Maturity dates are listed under Isolated Markets on Smart Contracts.

Rewards & Incentives

How do I earn DUST?

Supplying and borrowing accrue DUST through the DustRewardsController. When you claim, you choose how to take it: liquid immediately at a fixed penalty, or routed into a veDUST lock, where the penalty falls the longer you commit and disappears entirely at the maximum duration. DUST Incentives covers the routes in full.

What are Pearls and Tides?

Pearls are leaderboard points, accrued from supplying, borrowing, holding veDUST and providing liquidity, with multipliers for partner NFT holders. A Tide is one leaderboard epoch, at the end of which winners are drawn. See Leaderboard.

What is a self-repaying loan?

You can route your veDUST revenue share into your borrow position so that it pays your debt down automatically, instead of arriving as a reward you claim and then repay by hand. See Loan Self-Repayment System.

Governance

How can I participate in governance?

Participating in Neverland governance requires that an account have a balance of vote-escrowed Pixie DUST (veDUST).

What is veDUST?

veDUST represents a locked DUST position and is implemented as an NFT. Users obtain veDUST by locking DUST for a chosen duration of up to one year, or by selecting the permanent lock option. Each veDUST NFT encapsulates the lock amount, remaining duration, and associated governance power.

veDUST positions are fully transferable and tradable, including on secondary marketplaces such as Magic Eden. When a veDUST NFT is transferred, all associated properties of that position, including lock duration, decay state, and governance rights, transfer with it.

The amount of veDUST a user has is proportional to the amount of DUST locked and the current lock duration. For time locks, veDUST decays linearly as the unlock date approaches. As time passes, governance power and revenue earning power gradually decrease until the lock expires. For users who choose the permanent lock, veDUST does not decay. Permanent locks maintain maximum relative governance power over time, reflecting a stronger long-term commitment to the protocol.

Users may also unlock a veDUST position early by paying a penalty that scales with how much time is left on the lock, up to a maximum of 75%. See veDUST Mechanics for the formula and the weighted-start rules that govern it.