Arbitrum-Based Radiant Capital Targets Outsized Platform Profitability With V2 Launch

Radiant has already generated $5 million in fees for users since its July launch.

AccessTimeIconFeb 10, 2023 at 10:07 a.m. UTC
Updated Feb 10, 2023 at 4:15 p.m. UTC

Arbitrum-based decentralized finance (DeFi) protocol Radiant will soon release its version 2 (v2) as part of a broader plan that developers say would eventually help make Radiant the “most profitable” protocol in the sector.

DeFi products rely on smart contacts instead of middlemen to provide users with financial services, such as lending and borrowing. Protocols rely on user-sourced liquidity to generate rewards, fees and revenues for both the platform and users – similar to a traditional company but without relying on a single entity.

Radiant’s product will eventually allow users to deposit any major asset on any major blockchain and borrow various supported assets across other blockchains. This is unlike most current DeFi products, which allow users to deposit and borrow assets only on one blockchain.

Over time, a cross-chain money market could serve as a major source of liquidity for DeFi applications on other blockchains, attracting revenues, generating fees and rewarding users with RDNT tokens in return for providing liquidity.

Yields offered on Radiant currently range from 2.5% APY on dai (DAI) deposits to 3.48% on tether (USDT) deposits. The platform generates revenues from borrowing interest and loan fees and locks up nearly $300 million across stablecoins, bitcoin and ether.

Radiant has already generated $5 million in fees for users. New features for the v2 launch include emissions granted only to "club members" who add value to the protocol, collateral support for over 20 new tokens and a distribution of the product on five other blockchains.

Radiant has also proposed changes to its tokenomics in a now-concluded proposal, aimed at creating a more sustainable model for the long-term future of the protocol.

Token emissions to lenders and borrowers would now occur over a five-year period compared to the earlier two-year period, allowing more resources for the team to fully develop the product.

Technical documents also show Radiant is introducing bounties, a new form of utility whereby only users who add liquidity to the protocol can earn RDNT emissions. The protocol will have the ability to "disqualify" ineligible users for bounties and further decentralize actions taken on the protocol.

Some analysts say such changes can fuel Radiant’s growth and add value to the RDNT token over time.

“By introducing a revised tokenomics model that focuses on a virtuous flywheel for long-term RDNT stakers, Radiant v2 constitutes an effective iterative upgrade on RDNT v1,” pseudonymous crypto investor and researcher DeFi Maestro told CoinDesk, adding that the “flywheel encourages users to participate more actively in the protocol via rewards incentives.”

“Investors are able to generate two sources of revenue from locking and staking their RDNT in Balancer LPs. The dLPs (locked liquidity provider tokens) also qualify them to earn additional yield through lending secondary assets for example ETH and USDC,” DeFi Maestro said, adding that sustainable revenues would eventually become “a major selling point for investors.”

The v2 is scheduled for a Feb. 16 launch as of Friday, with BNB Chain listed as the first blockchain outside of Arbitrum that Radiant would deploy on. RDNT tokens trade at 20 cents in European morning hours on Friday, down 15% in the past 24 hours.


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Shaurya Malwa

Shaurya is the Deputy Managing Editor for the Data & Tokens team, focusing on decentralized finance, markets, on-chain data, and governance across all major and minor blockchains.

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