Royco Protocol’s New Approach to Liquidity: What You Need to Know
Waitlist Access, Royco Marketplace, & More
The crypto markets are at a standstill of sorts right now making it a good time to learn about new iterations on age-old problems in the space. In addition to the stablecoin trilemma and bridging, liquidity stands out as a key problem many builders look to solve in DeFi. Managing chain fragmentation and maximizing capital efficiency are issues that many have made attempts to solve.
Royco is one of the latest looking to tackle this issue, introducing the concept of Incentive Providers (IPs) in addition to LPs. Builders are also a new part of the equation, helping on the accessibility front to make these incentives and provide liquidity available across chains. This kind of model aims to be a win win for everyone; LPs can get higher rewards, IPs can access more liquidity than possible when sticking to just one chain, and builders have access to interoperable liquidity, infrastructure and existing integrations.
Royco protocol describes itself as a liquidity coordination marketplace; an order book for liquidity. The project is pretty young, with its Twitter presence dating back to just April of this year. Now, things are ramping up as the project has begun releasing more details and has released its waitlist access…
Stay alert, stay informed ⬇
Background on Royco
Royco aims to enable broader participation in high-yield deals while reducing the need for large followings or social influence. The way this works is that users leverage VC rounds to inflate market caps, enabling participation in TVL raises at significantly higher yields than traditional market rates. Royco seeks protocols offering 120%+ yields, aiming to open these opportunities beyond whales and limited follower bases. Royco envisions an on-chain marketplace where liquidity providers interact with specialized markets, fostering accessibility and efficiency for all participants.
Various contributors collaborate with Royco protocol to democratize deal access, aiming for fairer markets and broader participation. Leveraging Royco’s infrastructure presents opportunities to develop novel applications that capitalize on enhanced liquidity management and order book functionalities. Transitioning from traditional lending platforms to tick-based systems could revolutionize borrowing dynamics by focusing on collateral rather than market-based asset valuation. Customizing collateral factors based on price ranges allows for better support of longtail assets. Introducing real-time bidding among various counterparties can enhance cost efficiency in liquidity provision.
When it comes to the inspiration behind Royco’s design, the team believes that the key to identifying the best liquidity provision system (LPS) for a protocol lies in managing the cost of capital efficiently. By introducing a market where users can specify their required payment for depositing funds can create varying amounts, leading to dynamic liquidity provision. By adjusting payout percentages on an order book, protocols can attract different levels of liquidity, potentially reducing costs significantly.
Utilizing Royco’s infrastructure allows protocols to minimize costs by efficiently acquiring necessary liquidity through innovative mechanisms like point programs. Royco enables LPs to lock up liquidity in a market, specifying token amounts needed for funding and allowing users to competitively drive down costs. This system offers three key phases: aiding growth in TVL, assisting incumbents in maintaining pool liquidity at minimal costs, and fostering new applications leveraging Royco’s infrastructure.
Insights from Royco CEO
Jai Bhavani, the CEO of Royco protocol has a plethora of experience in early-stage crypto startups, having co-founded Rari Capital, one of the earliest implementations of the DeFi money market. He then went on to cofound Waymont, which is the self-custody crypto platform behind Royco. Jai directed efforts specifically toward Royco upon realizing its importance and priority.
Jai says that whales’ involvement in private deals boosts metrics like total value locked, enhancing future fundraising prospects through increased valuations. He forecasts a transition from OTC markets to public trading spaces due to the transparency and efficiency offered by DeFi platforms like Royco.
DeFi opens up new avenues for trading and yield opportunities, transforming traditional equity mining practices. Some individuals have been able to earn high yields in DeFi, but there is a push towards making these opportunities more widely accessible. Previously, attractive yields were limited to traditional finance firms with significant resources. Over the years, there has been an industrialization of various segments within DeFi, such as automated market makers and lending platforms. The aim is to revitalize DeFi by enabling broader access to industrialized opportunities for everyone. Jai believes that by reducing barriers to entry, it is anticipated that there will be a surge in innovation within the DeFi space. The goal is not only to provide access but also to ensure easy liquidity provision for projects, fostering growth and development.
Royco Waitlist & Next Steps
Early last month, Royco rolled out their project waitlist, allowing users to get certain access and priority levels based on their wallet status. Users can connect more assets to get access to Royco first. The team quickly has seen registrations totaling over $670M in user-controlled assets, with over 5,000 users. Note that this is not TVL, simply the value of assets in wallets connected to the platform. There is also a referral program currently live, with notable users of the Royco platform in Sam Kazemian, Smokey the Bear of Berachain, and more.
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