Radiant - v2
Radiant v2: Evolution Towards DeFi 3.0 and Its Economic Model
Radiant v2 represents the next step in the evolution of the Radiant platform, addressing the shortcomings and limitations observed in the earlier versions of the DeFi ecosystem. DeFi 1.0 was plagued by copycat protocols that lacked real utility and governance tokens with high emissions, which inevitably got farmed to zero. These emission models failed for several key reasons:
Lack of real utility: Tokens offered little or no actual use case, and “governance-only” tokens were re-priced over time to reflect their governance value.
Low barriers to entry: Liquidity providers (LPs) could easily deposit tokens, earn yield, sell them off, and move on once yields compressed. This cycle repeated across more than 95% of DeFi protocols.
After the first year of v1, two main concerns emerged from discussions with community members and advisors:
How will the next version of Radiant create a better utility exchange between lenders/borrowers and the protocol?
In keeping with the Foundation’s core value of “collective benefit,” how should the protocol decide who is eligible for the utility of receiving RDNT emissions?
To address these concerns, Radiant v2 features revolutionary changes to core protocol mechanics, emissions, utility, and deeper cross-chain functionality.
Radiant v2 focuses on three main pillars:
Preventing Mercenary Farming: Mechanisms are in place to prevent participants from seeking short-term profits without contributing to the long-term sustainability of the ecosystem.
Providing Real Use Cases: Radiant v2 enables seamless cross-chain borrowing and lending, providing real utility for users and fostering long-term value.
True Decentralized Governance: Fully implemented governance through Discourse Discussion Boards and Snapshot voting, empowering the community to actively shape the future of the protocol.
Read the Radiant v2 Medium article for a full breakdown of the changes.
Radiant v2 Economic Model
The preceding article provides detailed insights into the v2 enhancements. Now, let’s outline the economic model of Radiant v2, covering its fundamental to advanced functionalities.
Basic Lending and Borrowing
Radiant is a money market where users can deposit and borrow assets across multiple chains.
Depositing assets allows lenders to earn competitive market rates denominated in the deposited asset, which are influenced by borrower fees.
Borrowing entails interest rates aligned with market utilization, reflecting the demand for specific assets.
Providing Liquidity with dLP
Users can enhance liquidity by pairing RDNT with ETH or BNB, depending on the chain, and locking dLP tokens. This action grants access to protocol fees distributed in blue-chip assets like ETH, BTC, and stablecoins
For further insights on dLP and fee-sharing, refer to LIQUIDITY PROVISIONING
Unlocking RDNT Emissions
Users meeting the criteria of locking dLP equivalent to or exceeding 5% of their total deposits unlock RDNT emissions. For example, a $1,000 deposit requires a minimum $50 worth of locked dLP. Radiant v2’s Economic Model introduces versatile features designed to foster a dynamic ecosystem where participants are generously rewarded. Additional functionalities include looping, dLP zapping, and customizable lock periods.
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