Root: Achieving long-term protocol value through governance, incubation, and bonds
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Root: Achieving long-term protocol value through governance, incubation, and bonds
Root is building a powerful flywheel to create a project that operates sustainably in the long term.
Navigating Web3 tides with focused insightsAuthor: Emperor Osmo
Compilation: TechFlow
Today's crypto projects offer innovative tokenomics that provide advantages for investors. However, most fail to build effective flywheels that generate long-term value. One project, however, is aiming precisely at this goal—building the ultimate flywheel on LayerZero.
Let’s meet “Robin Hood of crypto”—Root. They are building a rich ecosystem of products that benefit all participants, similar to a centralized exchange (CEX) offering spot, leveraged, and business products.
Root will launch three main components:
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Governance layer;
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Incubator;
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Bonds.
Each of these components will operate in a symbiotic relationship with one another.
Governance Layer
A key component of Root is its ability to utilize protocol-owned revenue to build a governance layer. The revenue generated here will be used to grow the incubator, form partnerships, and return value to users.
We've already seen similar models implement a "black box" mechanism to funnel value back into the protocol, such as PlutusDAO. In Root, this mechanism will be used to:
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Increase treasury size;
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Drive revenue streams;
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Invest in the incubator.
Protocol Incubator
We’ve seen large-scale cryptocurrency incubators launch, providing liquidity and support for early-stage projects—similar to seed investors. These incubators offer support in exchange for revenue, benefiting both the treasury and $ROOT holders (more details to come).
This market has already reached $95 billion over the past five years—and continues to grow. With Root, you can gain revenue exposure from early investments in innovative protocols.
Bonds
Root generates protocol revenue by selling bonds to users. Users can exchange $WETH for $ROOT at a discount to the current market price. But how does this work?
Bond vesting takes 5 days. During this period, $ROOT tokens are linearly vested, reducing sell pressure. The protocol builds its reserves through three types of bond markets:
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Strategic asset bonds;
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Reserve bonds;
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Liquidity.
$ROOT Token
This is Root’s native token, based on Curve’s ve model, designed to incentivize long-term holding. $ROOT can be locked into veROOT, granting holders the following privileges:
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Generate revenue;
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Governance rights;
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Borrow ROOT (Beata);
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Whitelist access to incubated projects.
Ultimately, Root is building a powerful flywheel to create a sustainable, long-term project.
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Bonds offer discounted $ROOT, thereby funding the treasury.
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The treasury funds ecosystem growth.
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Ecosystem growth creates value for $ROOT holders.
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Emperor Osmo
