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Three kinds of tranches come out of the same Royco infrastructure.
One splits risk. One guarantees an exit. One does both.
Every tranche runs on one of two risk profiles: protected (Senior and SLP), or first-loss (Junior).
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Combination three: Senior, Junior and SLP.
Coverage from the Junior and exit liquidity from the SLP. The senior position is liquid on demand, and has a loss buffer underneath it.
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Every tranched position on Royco now shows up in @DeBankDeFi and @Rabby_io.
Senior, Junior and SLP, all tracked live alongside the rest of your portfolio.
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Locked iUSD 8w is live on Royco.
The locked side of @infiniFi pays well above the liquid one, and it is now available to tranche on Royco.
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The split:
- Junior backs the Senior from the first dollar, and gets paid a premium for it.
- Senior sits behind that buffer.
The target coverage ratio for the pool is 15% for Senior depositors.
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Senior on Locked iUSD 8w: royco.org/market/1/0x5dbe1e2…
Junior on Locked iUSD 8w: royco.org/market/1/0x5dbe1e2…
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Junior yield from @USDai_Official is currently amplified. Utilization explains why.
The sUSDai market requires 7% minimum coverage. At least 7% of the market's TVL has to sit in the Junior, the tranche that absorbs losses first.
Utilization is high right now. Here's what that means 👇
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Utilization is at 93% today, above the 90% target. The adaptive curve responds by sending more of the yield share to the Junior to attract new deposits.
The market is asking for more Junior capital and paying to attract it.
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Junior on sUSDai: 44.57%, live now. royco.org/market/42161/0xfdb…
Senior: 6.22%, protected by 7% coverage. royco.org/market/42161/0xfdb…
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That number is now 44.57%.
For context, @USDai_Official 's base staked rate is 8.57% APY.
Nothing unusual is happening.
It's tranching at work: as coverage gets closer to its defined floor, utilization rises, directing more yield to Junior.
Junior on Royco's sUSDai market is paying 37% APY right now.
That's almost 5x the 8% base staked rate from @USDai_Official.
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syrupUSDC Junior sits at 14.87% on Royco.
That's 3x @maplefinance's 4.91% base APY, with no borrowing, no LTV to manage and no loop to maintain.
Now compare that to looping it yourself.
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Looping syrupUSDC nets 9.3% to 14.5% across Ethereum money markets, close to Royco's 14.87% Junior.
The difference is negative carry. If borrow rates rise too much, returns can go negative.
Junior offers similar yield without actively managing the leverage.
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Deposit into syrupUSDC Junior on Royco: royco.org/market/1/0xde1ce2c…
One position, no LTV, nothing to loop.
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Royco retweeted
USDai opened a new borrow market on Morpho.
Max loop that strategy and you can earn 36.38%. Wild number. However, @roycoprotocol 's Junior on the same asset, announced yesterday, is paying 37.65%.
Higher, and without the negative carry risk that comes with looping and unwinding it yourself. Same underlying exposure, a couple of clicks instead.
The stablecoin itself is also growing fast. @USDai_Official 's own numbers put the stablecoin at $550M in TVL now. Amazing comeback.
Borrow AUSD against sUSDai on @Morpho.
More liquidity is now available in the market curated by @flowdesk_co.
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This is the first market like this on Royco.
@Syntetika breaks down what Royco adds on top of hBTC, and what the SLP unlocks here specifically.
This one's worth your time.
Tranching Explained: What Royco Adds to hBTC
Tranching is older than DeFi. @roycoprotocol brought it onchain, and hBTC is now available through it in three forms. This is what each one does, and doesn't.
syntetika.io/blog/tranching-…
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