Royco Protocol, an Ethereum-based yield dapp launched at the end of 2024, has become one of the largest markets in DeFi after its total value locked (TVL) surged an impressive 267,000% in the past month to $3 billion. Royco is the fastest-growing application thanks to record inflows.
The protocol positions itself as a platform for creating Incentivized Action Markets (IAMs). In IAMs, incentive providers offer tokens or points for ‘Action Providers’ to perform on-chain actions, such as depositing crypto funds into a certain protocol, minting a non-fungible token (NFT), or executing certain transactions.
The surge in Royco’s activity comes ahead of the launch of Berachain, an EVM-compatible layer 1 whose mainnet is going live on February 6. Berachain’s liquidity hub is Boyco, a decentralized application that went live last week, attracting over $2 billion in pre-deposits.
The goal of Boyco is to attract Berachain liquidity before its mainnet launch. For Berachain, liquidity is imperative, as its consensus algorithm uses a Proof of Liquidity model.
The Boyco protocol helps applications pre-launch liquidity markets where users can deposit crypto assets before the mainnet goes live.
Meanwhile, Royco is an Ethereum-based protocol that helps Boyco attract pre-launch liquidity. For example, Royco’s largest market, with $300 million in TVL, is “Infrared x Kodiak WETH-STONE LP”. This IAM requires users to deposit WETH-STONE Uniswap v2 LP tokens on Ethereum and bridge these assets to Berachain. Then, they should provide liquidity in Berachain’s WETH-STONE Kodiak Island, an automated liquidity management vault. Finally, they should stake the Island receipt token in the respective Infrared iBGT-compatible Vault.
This is part of Berachain’s Boyco pre-deposit campaign. The APY for the locked funds is over 15%.
Tokens with the highest TVL on Royco include LBTC, WETH, WBTC, SOLVBTC.BBN, USDC, STONE, PUMPBTC.BERA, and WEETH.
Royco is currently the second-largest yield dapp by TVL after Pendle. It has helped the DeFi yield sector’s TVL increase to the highest level since May 2022, totaling $13.4 billion.
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