Radiant Capital Research: Token Deflation, Revenue Emergence—Will It Benefit from the Arbitrum Boom?
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Radiant Capital Research: Token Deflation, Revenue Emergence—Will It Benefit from the Arbitrum Boom?
Radiant's total value locked (TVL) continues to grow, reaching a record high of $342 million.
Navigating Web3 tides with focused insightsAuthor: JAKE PAHOR
Translation: TechFlow
The Arbitrum season is coming, and Radiant Capital is preparing for the upcoming Arbitrum bull market. Below is my November 2023 research report on RDNT.
Overview
Radiant Capital is a cross-chain lending protocol built on LayerZero that allows users to:
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Deposit collateral—e.g., USDC on Ethereum
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Borrow assets on other chains—e.g., ETH on Arbitrum
Use Cases
A major issue in DeFi is fragmented liquidity. Borrowers must choose one chain, and the assets they withdraw must exist on the same chain. Bridging between different chains can be cumbersome and risky. Radiant aims to:
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Unify liquidity
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Simplify the lending experience
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Innovate on top of this foundation
With the release of Radiant V2 in March 2023, the project significantly reduced inflation and improved overall tokenomics.
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User behavior is now aligned with the protocol; rewards are distributed only to RDNT holders
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Increased revenue share to stakers (from 50% to 60%) and decreased share to lenders (from 50% to 25%)
Adoption
Radiant’s total value locked (TVL) has been growing steadily, reaching an all-time high of $342 million. Its TVL increased by 26% in just the past month, primarily driven by its launch on Ethereum in October.
This positions Radiant as the 7th largest lending protocol and the 32nd largest across all protocols on DefiLlama.
Revenue
Protocol revenue is distributed as follows:
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60% - to locked RDNT dLPs
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25% - to lenders
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15% - to operational expenses
Over the past 30 days, the protocol generated:
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$1.78 million in fees
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$1.33 million in revenue
Ranking it 2nd among lending protocols and 15th overall.
Tokenomics
$RDNT is Radiant’s native utility token (OFT-20). LayerZero’s omnichain solution enables seamless token transfers across chains. $RDNT facilitates protocol fee sharing and governance via locked dLP tokens.
The protocol is now live on Arbitrum, BNB Chain, and Ethereum. All vesting will be completed by 2027.
Current supply metrics:
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Circulating supply = 347 million
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Max supply = 1 billion
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Market cap = $95.5 million
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FDV = $275.2 million
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Market cap/FDV = 0.35
Treasury
Radiant DAO has two main treasury wallets:
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Radiant Reserve - $44 million
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Radiant DAO Treasury - $28.5 million (in RDNT, USDT, ARB)
The DAO holds reserves and controls the allocation of future RDNT emissions. The treasury funds day-to-day operations such as salaries, listings, and marketing.
Governance
Radiant Capital operates as a DAO with 25,000 members on its governance forum and has voted on 25 proposals to date. Participation in voting requires locking RDNT tokens.
Currently, over 44 million dLP tokens are locked.
Team / Investors
Radiant launched in 2022, with the founding team self-funding development efforts (approximately $1.5 million). There was no venture capital, private sale, or ICO to raise capital.
Key partners include:
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LayerZero
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Chainlink
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Lido
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Arbitrum
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Balancer Labs
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Binance Labs
Competitors
Aave dominates the DeFi lending space. Radiant, a fork of Aave, is emerging as a strong competitor with omnichain capabilities.
Tapioca DAO is another rising protocol operating as an omnichain money market on LayerZero.
In short, competition in this space is intense.
Risks and Audits
The V2 codebase has been audited by OpenZeppelin, Peckshield, and Zokyo, with no unresolved critical or high-risk issues.
Additionally, there is a bug bounty program operated by Immunifi.
However, as with any DeFi investment, potential smart contract risks always remain.
Conclusion
Overall, I am optimistic about $RDNT and the Radiant protocol, rating it 8.43 out of 10. Additional catalysts on the horizon include:
Launch on Ethereum
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ARB season
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STIP grants—directing ARB incentives to new dLP stakers
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LayerZero narrative
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Radpie integration
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@jake_pahor
