Using the token factory smart contract, anyone can issue new tokens or synthetic assets (erc20) and non fungible tokens (erc721) using the Radian Token Factory in an entirely decentralized manner.
A small portion of the minted supply is sent to the Radian Collector contract, which distributes all tokens into the Radian Pool, and effectively creates an indirect airdrop to all Radian holders. Doing so also allows it to instantly be farmed by providing liquidity to this asset’s pool on using the Radian Trader contract.
If the asset eventually reaches a certain level of liquidity and price stability, it can also be used as collateral within the protocol.
The collector is at the core of the Radian protocol. Collateral and all tokens in the supported Radian ecosystem are sent to the Radian collector, which in return, supplies, emits or mints new RAD.
The collateral value or tokens supplied to the collector will depend on the token’s current ETH price converted into the current price in RAD. This means that Radian and the Radian Pool’s underlying tokens are used as the form of collateral and the form of liquidity for the entire protocol.
Since Radian can be burned at any time for a proportional share of the assets in the collector, it is implicitly valued utilizing a function containing a formula that uses the value of the total assets in the collector combined with the current stabilized trading value of RADX price using a price oracle, the Radian Pricing Formula or RPF. This RPF is also what determines the amount of RADX that can be radiated from Radian, or the amount of Radian that will be received by swapping back from RADX into RAD at any given time. At times, the total supply in the Radian Pool may fall below the value supplied by the price oracle. At these times, new Radian can not be unlocked or radiated into RADX until more collateral is supplied into the Radian collector contract. In all cases, each time tokens are staked into RAD, or a trade or emission of RAD occurs, a portion of the fee is distributed from the collector contract and into the Radian pool, and a small amount of Radian is also permanently burned, resulting in a permanent reduction of the total supply of Radian that can ever be minted or traded for RADX.
The Radian trader allows trading of any asset using it’s RAMM and fees are split between liquidity providers and the Radian Pool. This means a portion of the trading fees are distributed to all Radian holders.
Radian holders have the option to unlock their underlying tokens in the pool by permanently burning the Radian token and receiving an equal proportion of the tokens contained in the Radian Pool in return, or by using the RAD token to “radiate” RDX liquidity tokens that can be used for trading on any decentralized exchange.
In order to reliably enforce governance and stabilize the exchange between RAD, RDX and the Radian Pool, the Radian RAD token itself is not tradable, but it can be burned in exchange for it’s proportional supply of the Radian Pool, used directly for decentralized governance, or unlocked and converted into RDX.
When a liquidity provider adds liquidity to a pool, they receive a token specific to that pool representing their share of the liquidity pool. This token can then be staked into the Radian Yield contract for that pool. When liquidity tokens are staked, the entirety of the trading fees that would have gone to the LP go to the Collector instead.
However, the LP will now earn healthy amounts of Radian at every block reward which, depending on the APY, is designed to create superior rewards for the LP than simply providing liquidity alone.
Similar in design to MakerDao’s DAI, the Radian stable coin needs to be collateralized using a collateralization factor in order to mint new USD Plus coins.
We intend for the Radian stable coin to be a layer-2 stable coin by default. Although layer 2 solutions based on rollups and zero-knowledge-proofs are still in their infancy, the proofs have been shown to be viable, thus we plan to utilize this ground breaking cryptographic technology. Doing so will make smaller transactions very practical, yet there is still the issue of deposits and withdrawals. Even if a layer 2 solution allows a transfer to be as a penny, a layer 1 transaction is still required that could easily cost 100x more in gas on the Ethereum network in order to trustlessly move it into layer 2 in the first place. Therefore, our current intention with Radian’s stable coin is for USD Plus to be minted on layer 2 to begin with, and provide on-ramps and off-ramps via any decentralized application so that USD Plus can be used without ever having to interact with layer 1.
Should this plan prove to create too many constraints or difficulties for our initial launch, we may choose to deploy USD Plus initially on layer 1 and then as a transition to layer 2, start with USD Plus as the first aspect of Radian that goes live on layer 2.
Radian contains blacklists and whitelists filtering abilities of identity-verified users without exposing any PII information by using cryptographic hashing. The protocol also enables dapps to maintain their own whitelists and blacklists to allow compliant transactions to occur, without exposing themselves or the identity of their users. Applications building on top of the Radian protocol are encouraged to use the compliance contract features as this enables them to be compliant if the need arises.
Although, since Radian is open and decentralized software, the ownice falls on the application that is using the protocol to ensure they are following all known regulations within their jurisdiction, and the protocol itself makes no assertion or claims other than the fact that it enables compliance to occur, where most protocols fail in this regard.
As many have encountered, DeFi protocols can often be susceptible to multiple types of attacks, including economic attacks that exploit the features of the protocol, or attacks that could exploit the governance features and enable attackers to control critical aspects of the network.
Radian is designed to disallow these types of attacks as part of the protocol, and further we are working with and will continue to work with some of the best most well respected security auditing firms, security researchers and smart contract auditors to ensure that any vulnerable surface discovered area is made secure in a trustless and decentralized way.
We plan on supporting a much higher transaction throughput than what is currently possible on Ethereum’s layer 1. Therefore, we plan to deploy the entirety of the Radian protocol as soon as possible onto a layer 2 solution.
Although layer 2 solutions make transactions cheap for assets within layer 2, it still requires an expensive transaction on layer 1 to enter it, therefore our goal of making Radian a full and feature complete DeFi protocol is further understood, and this is one of the core reasons that Radian implements such a fulsome set of decentralized finance features.
Our scaling plan for layer 2 includes that all Radian smart contracts functions which enter into layer 2 will have two types of functions:
The standard entrance function common to current layer 2-enabled contracts. For example, a ‘Deposit’ function to deposit assets into layer 2.
An equivalent function, which batches the action of multiple users doing the same thing into a single function, similar in concept to aggregated transaction batching and many of the ideas underlying state channels.
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