Nolus in 2024: A Year in Review

Product

The beginning of the year saw the Nolus Twilight upgrade. This saw the Nolus chain upgraded to Cosmos SDK v47. This included:

• ABCI 1.0, which will transition into ABCI++ over time. This offers finer control over transactions in the mempool and introduces vote extensions, allowing consensus votes to include valuable use cases like Oracle data (which currently takes place off-chain); and
• A fee abstraction mechanism that allows users to pay their gas fees in axlUSDC. This reduces the barrier to entry for potential users who will no longer need to acquire NLS before being able to use the Protocol.

The largest product upgrade for users in 2024 was enabling volatile assets to be used as base lending currencies. This allows users to deposit volatile assets to the Liquidity Providers’ Pool and earn interest income from users that borrow those volatile assets for their DeFi Lease. The borrowing of volatile assets allows users to open short positions. This is an incredible upgrade that allows Nolus to serve both sides of the market, creating a one-stop shop for all users who wish to open a leveraged position.

Nolus has continued to grow in its asset offerings in line with the latest high-quality assets being made available in the Cosmos ecosystem. This includes alloyed assets on Osmosis (which abstracts bridge fragmentation for the end user) and dATOM (a liquid staking derivative created by the Drop team). The core contributors continue to evaluate other assets within the ecosystem that can be listed to provide additional value to its users!

Expansion

This year saw the first expansion for Nolus’ DeFi Leases. At launch, Nolus solely used Osmosis’ liquidity to open DeFi Leases for its users. Integrating Neutron and the Astroport decentralized exchange means that each DeFi Lease will check price rates across two exchanges before opening a DeFi Lease on the cheaper exchange.

Astroport uses a unique passive concentrated liquidity (“PCL”) model which is similar to Osmosis’ supercharged liquidity model but is an oracle-based solution that allows for “passive” LPing.

By integrating two exchanges with different models and different user bases, we may create opportunities for users that result in assets being priced more favorably across the two different DEXs than any one of the Dexes alone.

Tokenomics

Over the year, Nolus bought back and burned over 4m $NLS using revenue earned from the Protocol. This model is especially attractive for tokens as it provides an organic increase in demand while also creating supply-side advantages, reducing total supply (which means that less NLS can be sold assuming all else is constant). As Nolus continues to gain adoption and increased use, the total revenue available for buyback and burns will continue to grow, providing further strength to the $NLS token.

Towards the latter part of the year, the Nolus community adopted a tokenomics revamp to provide the ecosystem with a more stable inflation mechanism to retain long-term alignment. The previous model used high emissions at launch which rapidly decreased over time. The new model emits fewer tokens in the short term, with emissions increasing progressively over the remaining duration. This will align inflation with the ecosystem’s growth, allowing more tokens to enter circulation as the network matures.

Most recently, Protocol Governance has adopted a raft of changes to various assets to adjust the ratio between revenue attributable to liquidity providers and that attributable to the Protocol (to go towards buyback and burns). Nolus has successfully provided stablecoin depositors with organic yields far above those consistently available on the market. Therefore, Governance has adopted a position that can adjust these rates to be more aggressive in growing the $NLS token without materially deteriorating liquidity depositor yields.

Enhancing User Experience

In late 2024, we worked to make the Nolus experience seamless. This arose through scalability enhancements that enabled 80% faster lease transactions and near-instant on-chain actions. Changes that will help bridge the gap between the Web2 experience and the current Nolus experience will be those that we wish to close over time, reducing the barrier to entry for new users to the crypto space.

We also created Kai, an AI-powered assistant that leveraged a Large Language Model to support users of the Protocol. Kai can provide timely updates to users concerning the timings of maintenance windows and upgrades, deprecation notices or new token listings, and personalized onboarding tips or guides.

There were also several improvements to record management to help users better understand their activity on Nolus. This included detailed fee breakdowns to understand the breakdown of dex fees versus slippage, improved realized P&L accuracy, real-time closing metrics, and an actions log showing a user’s DeFi Lease history. Each of these changes aims to make it easier for users to understand the outcome of each of their DeFi Leases which may help them with future leases.

Charitable Events

Nolus’ core contributors sponsored a “Lease to Give” event. This saw several of Nolus’ power users receive a portion of $10,000 which they would use on Nolus to grow the amount received. Both the initial capital and any gains received over the duration would then be donated to a charity of the community’s choice.

As at November 2024, these users were collectively up 41%, and the scheme has been extended to 31 January 2025 to give some more time to these users to maximize their returns.

We are greatly appreciative of the time invested by these contributors and their efforts to maximize the help we can give to those in need.

Closing Thoughts

As Nolus’ first full year, 2024 was a vibrant year that saw Nolus begin to make a name for itself. It has a dedicated user base and 2025 will be an important year in making additive enhancements to grow this user base further in a way that benefits depositors, borrowers, and tokenholders alike.