Nova’s Programmable Asset Framework
It is no more news that Decentralized Finance is here to stay, opening up the world of finance to a wide array of solutions and innovations. These innovations and solutions have drawn in a lot of capital over a short time frame, which has increased the level of on-chain presence and resulted in more complexity than most users can handle. That’s where Nova Finance comes in. Nova, which will be built on the Solana blockchain, will use their programmable asset framework as a decentralized management layer, allowing users to control their engagement and exposure. Let’s talk a bit more about this programmable asset framework.
Programmable Asset Framework
When a user interacts with the programmable asset framework, they will receive a nAsset output token. These tokens represent the assets deployed by the user within the framework. The nAsset can also represent additional assets created by the instructions assigned to the nAsset. For this article, we shall be looking a bit closer at how these nAssets are created and managed
- nAsset Creation
To carry out the nAsset mint, the user must send an asset such as USDC, SOL, or BTC from a primary user token account known as the SPLU-Primary. The SPLU is used to store SPLM assets. The SPLM and SPLU are both used throughout the nAsset framework and can be Primary or Secondary. Primary accounts and assets are those owned by the user prior to the deposit, whereas Secondary accounts and assets are those still owned by the user after the deposit. The difference here is that, unlike the Primary, the Secondary has given the nAsset framework permission to act on their behalf.
The user creates a data account for the nAsset, which is known as the portfolio program mint address (PPM). The PPM contains critical on-chain information about the nAsset, such as assets involved and any supporting metadata. By exiting the portfolio without any lock condition, the user can reclaim their SPLM-Primary asset at any time. The user has complete control, but must delegate access in order for the full nAsset infrastructure to be implemented. At this time, a user data account called the portfolio program user is also created (PPU). The PPU enables a user to use a PPM without fear of incorrect accounting and settlement among participants.
- nAsset Management
Following the first step of minting the asset, the underlying infrastructure to manage assets deposited into the nAsset is formed. The SPLM-Primary is converted into the composition defined during the nAsset creation process during the deposit stage. Any on-chain swap or trade program can perform the conversion as long as cross program invocation is enabled.
The conversion program takes the SPLM-Primary asset, executes the conversion, and sends the SPLM-Secondary assets into separate SPLU-Secondary accounts for each asset to complete the deposit and conversion. The user grants the nAsset framework permission to use a certain number of SPLM-Secondary tokens from their SPLU-Secondary account. To withdraw, the SPLM-Secondary assets are transferred from the SPLU-Secondary accounts to the SPLM-Primary accounts via the conversion program. They are then given back to the user.