Nerite

Nerite is a decentralized borrowing protocol on Arbitrum (a friendly fork of Liquity V2) that lets users deposit ETH, liquid staking tokens (wstETH, rETH, rsETH, weETH), ARB, COMP, and tBTC as collateral to mint the overcollateralized stablecoin USND. Borrowers set their own interest rates, and 100% of protocol revenue flows to users through Stability Pool deposits, a Yearn-managed yUSND vault, and NERI governance. USND is a natively streamable Superfluid super-token, always redeemable 1:1 for its underlying collateral.

Nerite generates yield for its users from three main sources. Here is how each one works.

1. Interest from borrowers

People who borrow USND (the stablecoin) choose their own interest rate. 75% of all interest paid goes directly to users who deposit USND into the Stability Pool of that particular market. If less than 75% of all USND in circulation is deposited in a given Stability Pool, the yield for each depositor gets amplified — it can rise above the average rate that borrowers are paying. The remaining 25% of interest is controlled by holders of NERI (the protocol's governance token), who vote to send it to external decentralized exchanges like Bunni and Camelot. This helps build up USND liquidity pools so the stablecoin is easier to trade.

2. Liquidation fees

When a borrower's loan-to-value ratio gets too high, their position gets liquidated. The Stability Pool absorbs the debt, and the depositors who provided USND get to buy the liquidated collateral (ETH, wstETH, or other supported assets) at roughly a 5% discount — that is the liquidation penalty, and it all goes to depositors. They earn this in the actual collateral asset itself, not in USND.

If a Stability Pool runs out of funds, two fallback systems kick in:

• Just-In-Time liquidations: someone sends USND to the system and receives 105% nominal value in collateral.
• Redistributions: the bad debt is spread across other borrowers, who take a 10–20% loss on their own debt.

3. Inflationary bonus rewards

Depositors in Stability Pools also receive NERI tokens as an extra bonus on top of the interest and liquidation proceeds.

Additional details on revenue and fees

• All protocol revenue flows to users. There is no separate company or entity taking a cut.
• Oracle Extractable Value (OEV): Api3 oracles generate extra revenue that also flows back to the protocol.
• yUSND vault: A Yearn-managed vault (called an ERC-4626) automatically balances USND across all Stability Pools, so passive depositors can earn yield without having to manage multiple pools manually.
• No upfront borrowing fee: Borrowers do not pay a fee when opening a loan. However, they do prepay the first week of interest. If they adjust their rate within those 7 days, they pay a penalty equal to 7 days of the average market interest — this prevents tricks that dodge the stablecoin's redemption mechanism.
• Redemption fees: When someone redeems USND for underlying collateral, a fee applies (minimum 0.5% plus a variable base rate, capped at 100%). But that fee stays inside the affected loan position as extra collateral — it is not taken by the protocol.

No traditional venture capital rounds (Seed, Series A, etc.) with disclosed amounts or dates were found on any official Nerite source. The protocol is built by Nifty Chess Inc. and owned by the Go Slow Foundation DAO LLC (Marshall Islands). The NERI token distribution blog post (March 24, 2026) describes "Ecosystem Partners" receiving a total of 25% of the NERI supply: Alpha Growth (10% for market making/LP work), Arbitrum DAO Treasury (2%), Summerstone (5% for liquidation/redemption bots and peg maintenance), Threshold DAO Treasury (3%), Liquity AG (1% for the Friendly Fork License), and 4% directed to Liquity users and BOLD/USND LPs. Additionally, 15% of NERI supply was allocated to a Balancer Liquidity Bootstrapping Pool (LBP) — an open, fair-launch mechanism with no presale or allowlist — rather than a priced investment round. Liquity AG also received a license fee (as noted in the Friendly Fork Program page), and Nerite received technical support, early audit reports, and partnership introductions (e.g., to the DeFi Collective) from the Liquity team. No VC firm names, dollar amounts, or valuation data were disclosed.