Getting Started
The complete guide to institutional-grade yield tokenization on Stellar.
What is Novaire?
Novaire is a decentralized finance protocol built on the Stellar network using Soroban smart contracts. It enables the strict separation of yield-bearing assets into their principal and future yield components. By establishing an automated on-chain marketplace for these components, Novaire provides a permissionless foundation for fixed-rate lending, variable-rate speculation, and tailored yield strategies.
Why Novaire?
Yield in decentralized finance is inherently volatile and fragmented. Institutional and retail investors face significant risks when deploying capital into variable-rate money markets. Novaire exists to solve this by creating deeply liquid, capital-efficient markets that allow users to cleanly isolate and trade future yield independently from the underlying principal.
Developer Note
Protocol Overview
The protocol operates via a system of interacting smart contracts that manage the asset lifecycle from deposit to maturity. The primary mechanism is **Yield Tokenization**, where an underlying asset is wrapped and bifurcated into a Principal Token (PT) and a Yield Token (YT).
How it Works
Core Concepts
Standardized Yield (SY)
Definition: SY is a standardized token wrapper that homogenizes disparate yield-bearing assets into a common accounting interface.
Why it exists: To allow the core Tokenizer contracts to interact with any yield-bearing asset (lending markets, staking derivatives) without requiring custom integration logic for each.
How it works: Assets deposited into the Vault are minted as SY shares based on the current internal exchange rate. As yield accrues, the exchange rate grows, increasing the underlying value of each SY share.
Vaults
Definition: The central treasury that secures underlying assets (like XLM) and issues SY shares to depositors.
Why it exists: To isolate custody from tokenization and market-making, significantly reducing the attack surface of the protocol.
Principal Tokens (PT)
Definition: A claim on the base principal of an asset, redeemable 1:1 at a specific future maturity date.
Why it exists: To provide principal protection and enable fixed-rate lending. Because time must pass before redemption, PT naturally trades at a discount. Buying PT at a discount locks in a guaranteed fixed yield at maturity.
Yield Tokens (YT)
Definition: A claim on all variable yield generated by the underlying principal until the maturity date.
Why it exists: To offer highly capital-efficient, leveraged exposure to interest rates. YT holders receive 100% of the yield generated by the underlying asset, even though the YT costs a fraction of the underlying price.
Tokenizer
Definition: The core yield-stripping engine that issues PT and YT.
How it works: Users lock SY shares in the Tokenizer to mint equal amounts of PT and YT. At maturity, the Tokenizer facilitates the burning of PT for the base asset, and calculates the final yield claimable by YT holders.
Marketplace
Definition: A custom Yield-Space Automated Market Maker (AMM) enabling the trading of PT and YT against the underlying asset.
Intent Engine
Definition: An abstract transaction router that executes multi-step retail strategies in a single transaction.
Why it exists: To dramatically improve user experience. Instead of a user manually depositing, wrapping, minting, and trading, they sign a single "Intent" which the engine fulfills atomically.