# Horizon v2 Lite Paper

What You Get

Horizon is a DeFi lending,borrowing and liquidity platform with a fixed supply token, HORIZON, and an incentive token, NOVAE. There are five ways to participate, each with different returns and commitments. **Bonders** deposit USDx and receive HORIZON at up to 20% off market price, paid out over 28 to 88 days. The longer you commit, the bigger the discount. You're locking in a price below market in exchange for a short vest period. **HORIZON Stakers** lock HORIZON and earn HORIZON paid from every dollar that flows through the protocol. Rewards distribute through 28-day and 369-day payout cycles. The longer you lock and the larger your HORIZON portfolio share, the more you earn per cycle. Returns come from real protocol activity, not new emissions. **NOVAE Stakers** lock NOVAE and earn NOVAE paid from trading fees, protocol-owned LP rewards, and bond-driven buybacks. Same 28-day and 369-day cycle structure as HORIZON staking, with the same lock and loyalty multipliers. **Lenders** deposit assets into Earn vaults and receive interest from borrowers, plus daily NOVAE emissions. Yield scales with vault utilization. Lower-risk participation with continuous rewards. **Borrowers** open positions against their collateral, pay interest, and earn daily NOVAE emissions in return. Useful for leveraging existing positions or accessing liquidity without selling. NOVAE rewards offset borrowing cost. **Liquidity Providers** deposit into HORIZON/USDx, NOVAE/USDx, or other liquidity markets. They earn 72% of trading fees plus daily NOVAE emissions. The deepest liquidity, the highest fee capture. A single user can stack roles. Most participants will. Bond into HORIZON, stake the vested HORIZON, deposit USDx into Earn, borrow against it to LP a market. Every action compounds.

How Returns Are Funded

Returns to participants come from real protocol activity, not from token emissions designed to dump on holders. Every dollar that flows through Horizon (bond purchases and platform revenue) buys HORIZON on the open market. That HORIZON splits three ways: 20% burned forever, 30% paid to HORIZON stakers, 50% recycled back into bond inventory for the next bonder. This is the single rule the entire protocol runs on. NOVAE returns are funded by 28% of trading fees on liquidity markets, plus a 3% allocation from every bond purchase that buys NOVAE on market. NOVAE buybacks split 20/80 between burn and stakers. Stakers are paid by buyers. Every distribution to a staker is a token someone else just had to acquire on market.

How Buybacks Happen

Buybacks aren't run by the team. They're permissionless. Anyone can trigger a buyback when conditions are met and earn a 0.5% caller fee on the swap. The Treasury controls three parameters: how much USDx swaps per call (the cap), the minimum interval between calls, and the caller fee percentage. These adjust based on liquidity conditions and USDx accumulation rate. The mechanism: USDx flows from bonds and platform revenue into the buyback contract. Once enough has accumulated and the interval has passed, anyone can call the function. The caller receives 0.5% of the swapped USDx as compensation. The remaining 99.5% executes the market buy on HORIZON, which then splits 20% burn / 30% stakers / 50% bond inventory. This makes buybacks reliable without requiring the protocol to run them. Bots compete to call the function. The 0.5% fee covers gas and creates a small profit margin, ensuring buybacks happen on schedule. The same mechanism governs NOVAE buybacks.

What Locks Mean

HORIZON and NOVAE staking both run on lock durations from 28 days to 3500 days. You can stake for any duration in this range. Longer locks earn more per share through the Lock Multiplier, which scales linearly from 0% at 28 days to +350% at 2888 days. A 1000-day staker earns roughly 4x what a 28-day staker earns from the same principal, because their Effective Shares are multiplied by the lock bonus. On top of the lock multiplier, loyalty tiers (Silver, Gold, Platinum) add another +10%, +25%, or +50% based on your HORIZON portfolio share. A long-locked Platinum staker earns the maximum yield on every cycle distribution.

How Bonds Work

You deposit USDx into the bond contract. You pick a duration between 28 and 88 days. You receive HORIZON at a discount that scales with your duration: 5% off at 28 days, up to 20% off at 88 days. Your HORIZON vests linearly over the duration. You can claim what's vested any time, free. You can also exit early, taking your vested portion and forfeiting the unvested portion back to the bond contract. The discount adjusts dynamically based on how much HORIZON is currently in vesting positions. When supply is heavily committed, long-bond discounts compress. When the protocol has bond capacity, the full 20% discount is available.

Two Tokens, Two Roles

**HORIZON** is the protocol's value accrual token. Fixed supply at 1 billion, no emissions, distributed only through bonds. Its value comes from continuous market buybacks funded by every dollar of protocol activity. **NOVAE** is the protocol's incentive token. It directs liquidity, lending, and borrowing through daily emissions of 2,800 NOVAE distributed across the four markets (Liquidity 40%, Earn 25%, Borrow 25%, Treasury 10%). Its buyback flow is funded by trading fees and bond pairing. The two tokens never compete. HORIZON is paid by capital ingress. NOVAE is paid by activity throughput.

The Universal Value Split

Every HORIZON the protocol acquires through buybacks splits identically: * 20% burned permanently (deflationary pressure) * 30% distributed to HORIZON staker pools (yield to holders) * 50% recycled to bond inventory (perpetual mechanism) This rule never changes. Bond USDx buybacks, platform revenue buybacks, all the same 20/30/50 split. The mechanism runs forever within the fixed 1B cap.

Where Value Comes From

Five sources fund the system: 1. **Bond USDx** (primary): users buying discounted HORIZON 2. **Platform revenue**: vault performance fees, LP vault fees, liquidations, OEV 3. **POL trading fees**: the protocol's own LP positions earning fees 4. **POL NOVAE emissions**: the protocol farming alongside other LPs 5. **Forfeit returns**: unvested HORIZON from early bond claims All five flow through the same routing. Every source funds the same buyback. Every buyback splits the same 20/30/50.

Protocol-Owned Liquidity

Horizon is its own LP. The 10% of every bond purchase allocated to POL deploys into Gamma V2 vaults on HORIZON/USDx and NOVAE/USDx pairs. The protocol then earns trading fees and NOVAE emissions like any other LP. Trading fees and emissions earned by POL flow back to stakers in their native asset. HORIZON fees to HORIZON stakers. NOVAE fees and emissions to NOVAE stakers. USDx fees through platform revenue. The protocol funds itself through its own activity.

Treasury

The Treasury holds 200M HORIZON at genesis plus accumulating USDx from bond and platform revenue routing (12% of bonds, 25% of platform revenue). The team draws operational funding from Treasury USDx. The remainder is deployed into Horizon's own products, generating yield that compounds the Treasury position. The Treasury also controls buyback mechanism parameters (per-call cap, interval, caller fee) for both HORIZON and NOVAE buybacks. All operations are published on chain via dedicated dashboards.

Launch

Both HORIZON and NOVAE are minted in full at genesis. The first $10,000 USDx received through bonds creates initial liquidity: * $5,000 USDx + 5M HORIZON seeds HORIZON/USDx at $0.001 per HORIZON * $5,000 USDx + 1,000 NOVAE seeds NOVAE/USDx at $5 per NOVAE After initial LP formation, all bond USDx flows through standard routing. POL deepens entirely through Gamma V2 vault zaps from that point forward.

The Single Sentence

Every dollar that flows through Horizon buys HORIZON on the open market through a permissionless buyback, burns 20% forever, pays 30% to stakers, and recycles 50% into bond inventory for the next bonder, perpetually within a 1B supply cap. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://trader-li.gitbook.io/horizon-protocol/horizon-v2-whitepaper/horizon-v2-lite-paper.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.