RFP-14: Authorizing $RDNT Tokens for Prospective Investors

Abstract

RFP-14 looks to authorize the Radiant DAO to issue RDNT tokens to future prospective investors.

Motivation

Since inception, Radiant Protocol has raised $0 of Venture Capital or outside funding, and the initial team bootstrapped the protocol development entirely with their own funds, spending over $3M USD to date, with $700,000 spent on audits and security alone. While this allowed the team to operate more quickly rather than spending time fundraising, it has also served as a limitation, given the growing needs for hiring and spending to achieve the full omni-chain vision of the protocol.

Radiant Capital has had some great success over the past 8 months, growing to the number #1 money market on Arbitrum and quickly growing to Top 10 in overall TVL on BNB Chain within a week of launch. There is an incredibly ambitious roadmap ahead, and achieving that roadmap will require ramping up hiring significantly relative to the headcount currently on the team.

RFP-7 created the RDNT DAO Treasury, which allocates 15% of protocol fees in order to serve future needs of hiring, salaries, audits, marketing, and business development needs. That said, this treasury will accrue value slowly (as protocol fees come in) and wouldn’t help with the immediate needs to both support current salaries and expand to new ones. These salaries and fees for contractors need to be paid in stablecoins, and many of which up-front.

Over the last couple months, Radiant has received inbound interest from prospective VC investors looking to inject capital into the protocol to help support the growth ambitions. While these conversations were all put on hold as 100% of energy was put towards the v2 launch, it would be in the best interest of the protocol to open these conversations again. In terms of the specific benefits it could bring Radiant users and DAO members:

• Additional hiring in all functions: Engineering, Ops, Marketing, Product Management

• Accelerating protocol development: This could bring forward the timeline to additional Radiant deployments on new chains as well as future projects that have been put on hold because of resource constraints

• Attract top-tier developer talent: As a largely Anon team with no VC funding, it’s been difficult to attain the level of talent that will make the Radiant ecosystem thrive for years to come. VC funding from the right strategic partners can help with credibility, in addition to tapping new networks for talents that these partners can provide

This proposal is to authorize up to a maximum of 17.5% of the RDNT token supply (175M tokens) to be issued to prospective future investors into Radiant Protocol. In terms of the requirements of prospective investors:

• Multi-year vesting schedules: To align with the long-term ambitions, any investor would be required to have multi-year vesting of RDNT tokens

• Strategic value add: Any partners brought into the ecosystem should be able to add significant value “over and above the check”, meaning they can help Radiant DAO achieve its vision in ways that go beyond the money. This may be with hiring, BD, marketing, development, and helping RDNT achieve its vision.

In terms of benchmarks from other protocols, a 17.5% allocation to investors is in line with projects such as:

• Stargate / STG (17.5%)

• Arbitrum/ARB (17.5%)

• Optimism/OP (17.5%)

• Starknet (17%)

Given confidentiality requirements, similar to the private deals done on the aforementioned protocols, these deals would be privately negotiated with potential VC or strategic partners. If the partner sought to do PR post-investment, The Radiant DAO would evaluate this on a case-by-case basis.

In terms of where the RDNT tokens will come from, the proposal is such that they would come out of the RDNT DAO Reserve (RFP-2). The RDNT balance of the Reserve will continue to accrue more tokens as users exit vests early (RFP-5). If at the time of investment more tokens were required, these would come out of the RDNT Emissions reserve, slightly reducing the amount of tokens emitted in years 4 and 5 to lenders and borrowers. Based on simulations done internally, the assumption is that no tokens would need to be drawn from the emissions reserve.

In summary: RFP-14 is crucial for Radiant to achieve its ultimate vision of becoming the dominant omnichain money market, bridging the billions in fragmented liquidity on all chains with support for hundreds of assets. To realize this goal, Radiant needs to overcome its current limitations, such as a limited stablecoin treasury (outside of RDNT), and the inability to attract top-tier talent. By authorizing the issuance of up to a maximum of 17.5% of the RDNT token supply (similar to STG, ARB, OP & Starknet) to prospective investors, Radiant aims to secure the necessary capital to significantly ramp up hiring, accelerate protocol development, and access the networks and credibility provided by top tier strategic partners. This additional funding and support will enable Radiant to execute its ambitious roadmap and assist in realizing its vision.

Key Terms

• N/A

Specifications

• Authorize the RDNT DAO Reserve to issue up to 17.5% of the total token supply (175M tokens) to prospective investors, under the condition that any investor would be subject to a multi-year vesting schedule and cliff with no tokens available immediately

Steps to Implement

• N/A

Overall Cost/Impact

• No impact expected given the mechanics of RFP-5. If more tokens were required, this would lead to a marginal reduction in RDNT emitted to lenders/borrowers in Years 4 and 5 from protocol inception

Timeline

Immediate effect

Voting

• In Favor: Supportive of RFP-14, authorizing up to a maximum of 17.5% of the total RDNT token supply to be issued to prospective future investors

• Against: Against implementation of the RFP-14 proposal

• Abstain: Undecided, but contributing to quorum