Navy
Trade income securities. Earn their dividends. Navy is a synthetic exchange for publicly traded, SEC reporting companies that have an audited Net Asset Value (NAV) and pay regular dividends: BDCs that lend to middle market businesses, REITs that own real estate, and CEFs that manage bond portfolios. They pay 5 to 18% annual dividends and trade at a discount or premium to their NAV. Hundreds qualify. Navy launches with 10 and adds more through governance. You never own the stock. You get the full economic exposure: price movement, dividends, and the NAV gap. Each token is a full return synthetic. Long, short, use leverage up to 10x. Everything settles in USDC.
What You Can Do
Trade. Each token tracks the price and dividends of a real company. Go long or short. The pool takes the other side of every trade. Liquidity comes from the pool.
Use Leverage. $1,000 becomes $5,000 at 5x. Every trade defaults to 1x (no leverage, no liquidation risk). The protocol sets margin dynamically based on volatility. Up to 10x.
Collect or Pay Dividends. When the real company pays a dividend, Navy mirrors it as a collateral transfer. Longs receive USDC. Shorts pay USDC. Nobody owns the stock. On leverage, dividends apply to the full position.
Lend. Deposit USDC into lending pools. Traders borrow it for leverage and pay interest. Rates vary with demand.
Use Vaults. Automated strategies that trade NAV discounts. Deposit USDC. The vault manages positions. Past performance does not guarantee future results.
Where Profits Come From
Every trade has a counterparty. When you profit, someone else loses. When you lose, someone else profits.
Trading P&L. You go long, someone else is short. Price goes up, the long profits and the short loses. Price goes down, the opposite. The pool acts as counterparty.
Dividends. Collateral transfers between traders. The Navy price includes accrued dividends (Market Price + Accrued Dividend), so you always pay for the yield already earned. On the ex date, the accrual resets, longs get credited, shorts get debited. The Junior pool covers any imbalance. On leverage, dividends apply to the full notional position.
Live Breakeven. Your breakeven price updates every day. For longs, accrued dividends lower your breakeven over time. A stock can dip and you still break even because the yield made you whole. For shorts, the breakeven rises. The dividend clock works against you.
Funding rates. Every 8 hours, the popular side pays the unpopular side. If the market is 80% long, longs pay shorts. If it flips, shorts pay longs. This keeps the market balanced.
Lending interest. Traders who use leverage borrow from lending pools and pay interest. Lenders collect that interest.
How the Pool Keeps Its Edge
The pool takes the other side of every trade. It does not bet on prices going up or down. It makes money from the cost traders pay to take risk.
Skew pricing. When the market is imbalanced (eg 80% long), the pool quotes a worse price for the popular side. If the NYSE price is $20.00, longs might have to buy at $20.10. That $0.10 is instant margin for the pool.
Funding rates. Every 8 hours, the popular side pays the unpopular side. If the market stays 80% long for a week, longs pay continuous rent to keep their positions open. That rent flows to the pool. A stock can go up 1% and the trader still loses if they paid 2% in funding to hold the position.
Liquidation penalties. When a leveraged position hits the danger zone, the pool closes it and keeps a penalty fee. More volatility means more liquidations means more revenue for the pool.
Accrued pricing. Traders pay the dirty price (Market + Accrued Dividend) on entry. The pool is never surprised by a dividend payout. The money is already collected from the entry price.
Open interest caps. The pool knows its limits. If the Junior tranche has $1M and traders have $10M in open positions, the pool stops accepting new risk. No new positions until more capital enters or the market rebalances.
Market Design
Oracle failsafe. If the price feed goes stale or returns data outside expected bounds, the system pauses new liquidations for that asset until the feed recovers.
Encrypted order flow. Every trade is encrypted before execution. No sandwich attacks.
Zero gas fees. No transaction costs.
Points
Use the protocol, earn points. Non transferable. When Navy launches its token, points convert.
Transparency
The risk methodology is public. Smart contract interfaces are auditable. The core L1 engine, matching system, and oracle infrastructure are proprietary. For the full technical details, read the Research Paper.