Tokenomics
The ROYA Token
The native token of the Royale ecosystem is the ROYA token. It is an an ERC20 token that exists on the Ethereum blockchain. The ROYA token is intended to serve as a coordinating mechanism between ROYA stakers, stablecoin liquidity providers, and iGaming innovators.
Royale Pool Token (RPT)
Network participants can provide stablecoin liquidity and will be provided with Royale Pool Token (RPT) as a representation of their contribution to the Royale LP. The RPT can then be staked to accumulate mROYA.
mROYA Token
The mROYA token can be accumulated by staking RPT tokens and also from staking ROYA in the ROYA reserve. The mROYA token will be exchangeable against the ROYA token after a period that will be voted on by the governing council.
Token Utility
The ROYA token is a multi-purpose tool for incentivizing active participation in the Royale ecosystem.
It is a Coordinating Mechanism within the ecosystem. $ROYA token is a coordinating mechanism tool in the Royale Ecosystem. Within the circular token economy designed, $ROYA, as a tool, has three purposes.
It is an incentive for ecosystem members to provide liquidity. The objective is twofold, to incentivize Royale network members to participate in the stablecoin liquidity and $ROYA liquidity pools.
Stablecoin liquidity is an essential piece in the Royale Ecosystem because it will allow bankroll of Gaming companies. Users who fill the stablecoin liquidity pool will receive mROYA that will be redeemable against the $ROYA token.
Incentivization mechanisms have been created to reward $ROYA liquidity providers in Uniswap and Balancer pools.
It is a value capture mechanism when bankrolling iGaming companies. Companies that are looking to bankroll their platform will pay the stability fees in $ROYA. These stability fees are paid thanks to the platform value creation. For more detail, refer to the Value Capture Mechanism section.
It is an insurance tool. $ROYA in the Royale Reserve aims at being a resource used to prevent shortfall events. Users receive rewards to provide liquidity and lock their $ROYA in the Royale Reserve. In exchange, these $ROYA can be used to cover defaults of iGaming platforms. The section Royale Reserve is a more detailed explanation.
It is a governance token. In the decentralized Royale ecosystem, each $ROYA will represent a vote to accept or decline proposals. Voters have to hold one of the staking lots (either Queen, King, or Flush).
It is a payment token. When used as one of the payment tokens offered on platforms that participate in the Royale iGaming liquidity provision product, additional benefits such as discounts when ROYA is used to place wagers, and or staked within the gaming platforms. The users will receive the proportional APY to their individual amassed ROYA.
Finally, $ROYA will be used as exclusive reward systems via the Royale Kingdom NFTs and within the iGaming platforms and blockchain games as we develop further.
Value Capture Mechanism
$ROYA token captures the iGaming value creation in the Royale network. Then, the captured value flows to $ROYA token holders. The process will be possible thanks to the designed token circular economy.
The circular economy operates in steps:
The community provides stablecoin liquidity to the pool to bankroll iGaming operators.
Bankrolled iGaming companies pay the stability fees back in ROYA and stablecoins.
$ROYA are staked/pooled to generate more benefits.
An iGaming platform that wishes to borrow funds to bankroll their product will have to apply to be selected. When and if the platform is eligible for liquidity, the network diverts a portion of its liquidity pool to the iGaming platform. In exchange, participants receive RPT that represent their liquidity pooled. This RPT can be exchanged against the collateral when they are not used or when the debt is repaid. From this moment on, the iGaming platform will have to pay stability fees to the network until they reimburse the totality of the loan. These stability fees, denominated in $ROYA, will be sent to the Treasury and redistributed to the staking lots as a reward for their participation.
Royale participants receive interest on their DAI, USDT, and USDC pooled. Operators need to buy $ROYA from the market to pay these fees. This is where the value capture mechanism operates. By converting the value created in $ROYA, the Royale network captures part of the value created and grows.
To retrieve the collateral and close the Smart-backed debt position the debt needs to be paid in the stable tokens supported by the protocol.
The amount of the stability fees that have to be repaid will be determined by the governing council, according to several factors such as risks and liquidity available among others.
The loan will be repaid according to the P&L of the iGaming platform. Reimbursement is sent to the Royale Treasury. The pool is used to redistribute the desired percentage, to the Buyback and make pool, liquidity providers, and staking lots (fROYA, kROYA, and qROYA).
This value capture mechanism enables DeFi uncorrelated value flows. Therefore, the yield will depend on the performance of the iGaming platforms rather than on the DeFi market.
Staking Lots
There are three tiers of staking for holders of the ROYA governance token. The table below provides the breakdown by tier for 2200 available staking lots, including the staking APY that will be applied.
Staking Tier | Token Amount** (ROYA)** | | Maximum Amount of Lots | Total ROYA | | --- | --- | --- | --- | --- | --- | | Royale Queen | 10k | | 2000 | 20,000,000 | | Royale King | 100k | | 200 | 20,000,000 | | Royale Flush | 1m | | 20 | 20,000,000 |
ROYA staking aligns the agenda of all ecosystem participants. ROYA Token Staking is an important mechanism within the Royale ecosystem. It drives forward incentivization and adoption. Users who stake their ROYA tokens secure value from access to the staking rewards pool, governance rights and increased farming efficiency.
Liquidity Mining
Liquidity mining has three significant utilities. To incentivize $ROYA token holders to stake their liquidity into the Uniswap and Balancer pools. To incentivize the Royale community to provide liquidity to the Royale Reserve. Finally, to incentivize liquidity providers to fund the stablecoin liquidity pool.
All three incentives are crucial within the ecosystem because they will ensure the ecosystem is working correctly. 28,2% is to the staking rewards and liquidity provisions.
From these $ROYA funds, the governing council will decide the allocated percentage for each pool. According to the needs, either in stablecoin or in $ROYA liquidity, they will be updated. Currently, we have determined that 4 $ROYA will be minted per block and 768,000 $ROYA minted per month.
Four pools will receive rewards with the current percentage:
The Royale Reserve will receive 5% of the tokens minted.
The Balancer liquidity pool will receive 10% of the tokens minted.
The Uniswap liquidity pool will receive 15% of the tokens minted.
The Stablecoin liquidity pool will receive 70% of the tokens minted.
These rates are subject to changes according to the needs of the ecosystem.
Liquidity providers will receive their rewards in mROYA. Stakers will have the possibility to exchange their mROYA against $ROYA after a period determined by governance.
Stablecoin liquidity mining is divided into two-parts, seigniorage, and super-seigniorage.
The majority of rewards will be distributed via the seigniorage. The distribution of tokens will be linear, which means the same amount of tokens is distributed each month.
The Super Seigniorage distribution will be distributed decreasingly over time. The rate will be higher, in the beginning, to incentivize liquidity providers to provide liquidity immediately after the mainnet launch.
NFT Integrations
NFTs are a natural match for iGDeFi, and they will be an integral part of the Royale ecosystem. We will employ use cases such as gaming and collectible art, while also integrating them closely into ROYA tokenomics. The multifaceted utility and uniqueness of Royale NFTs will ensure they become highly coveted items, and their dynamic interactions with the ROYA tokenomic system will serve to amplify the value of both the NFTs and the entire ROYA ecosystem.
The first Royale NFT, the "Queen of Queens", is a perfect example — not only is it a unique collectible piece of art, but it is also directly linked with the ROYA tokenomic system and brings concrete benefits to its purchasers. The Queen of Queens NFT is a limited series of 72 uniquely numbered NFTs featuring original artwork. In addition to its collectability and artistic value, the Queen of Queens NFT also grants purchasers with three airdrops of 2,400 ROYA, which together equal one Queen Staking Lot.
Future Royale NFTs will feature more unique collectables with original artwork as well as deeper interactions with ROYA tokenomics. Possible functionalities of future NFTs include benefits such as increased reward rate for specific staking lot holders (for example increasing the reward rate by an additional few percentage points for the Queen or King Staking Lot), discounts in the costs of Staking Lots, entry into a ROYA lottery, exclusive ROYA and partner project airdrops, and more!
The defining quality of Royale NFTs is that they are designed based on the principle of integration with the existing ROYA ecosystem. While they will often feature fantastic unique artwork, they are not merely collectables. Royale NFTs provide unique benefits to ROYA token holders, and serve to make the ROYA token ecosystem a more dynamic and exciting place. Ownership of Royale NFTs will benefit ROYA and serve to create a positive feedback loop which increases the value of both Royale NFTs as well as the ROYA token itself.
Buyback & Make Smart Treasury
A percentage of the value flows brought into the Royale ecosystem through investments and yields derived through the Liquidity Pools will be used to buy back ROYA tokens from the open market. ROYA buy-backs are designed to have a positive influence on price whilst ensuring long term decentralization is achieved.
A Buyback & Burn strategy can deliver short term impact on token price, however it also reduces token supply and redistributes current value to a smaller group of holders. Therefore, Royale will be adopting a Buyback & Make strategy as opposed to a Buyback & Burn strategy.
Buyback & Make enables Royale to create and manage permanent incentive models for the Royale ecosystem with continuous issuance while keeping their maximum supply of tokens. This recycling of bought-back tokens into constant rewards and liquidity will ensure that there is always an incentive to continuously capitalize the ecosystem. This allows the network to leverage the benefits of issuance continuously, while keeping the economic benefits of buybacks with the certainty of a known maximum token supply.
Royale's Smart Treasury will manage the Buyback & Make strategy with Balancer Smart Pools.
Treasury Sink
Royale Reserve
The Royale Reserve supports the operations and health of the Royale ecosystem. It will act as a risk coverage pool in case of an iGaming companies' default. Liquidity providers face less risk during a black swan event. The community can stake $ROYA in the Reserve and earn mROYA tokens, the governance council determines the reward yield to incentivize users to stake their $ROYA in the Reserve.
Moreover, the Royale Reserve will also act as the development fund of the whole ecosystem. The objective is to use the Royale Reserve Pool revenues to fund Royale operations. A portion of the stability fees paid by iGaming companies will be allocated to the Royale Reserve. The percentage is defined by the governance council and may change over time.
This treasury reserve will be allocated and managed at the discretion of the team, and eventually at the discretion of the governance token ecosystem.
Token Offering Tranches
The table below provides a high-level summary of the ROYA tokens on sale in each round.
Round | Price | Max Ticket Size | # of ROYA | % of Supply | Hard Cap |
Seed | $0.045 | 5,000 | 7,776,000 | 10.8% | $350,000 |
Private 1 | $0.07 | 10,000 | 5,688,000 | 7.9% | $400,000 |
Private 2 | $0.09 | 10,000 | 2,232,000 | 3.1% | $200,000 |
Private 3 | $0.10 | 10,000 | 2,232,000 | 3.1% | $200,000 |
Public (unlocked) | $0.12 | - | 2,088,000 | 2.9% | $300,000 |
TOTAL |
| | 20,880,000 | 27.8% | $1,450,000 |
A total of supply of 72m ROYA will be created with an initial market cap of $978,048. It is important to note that the Seed and Private Rounds have lock-up and vesting schedules, whilst the public round has no lock-up or vesting.
ROYA | Vesting Schedule |
Seed | 20% at TGE, 26.667% per quarter, ending at 9 months |
Private 1 | 40% at TGE, 30% per quarter, ending at 6 months |
Private 2 | 50% at TGE, 25% per quarter, ending at 6 months |
Private 3 | 50% at TGE, 25% per quarter, ending at 6 months |
Public | Unlocked 100% |
Team | 12-month cliff, 25% per quarter for two years |
Advisors & Legal | 6-month cliff, after 25% per quarter |
Staking Rewards & Liquidity Mining | Staking rewards & capital contribution incentives; on mainnet, vesting = 6 months |
Operational Reserve | Monthly unlock for 18 months |
Token Distribution
The initial Royale token distribution will be split as follows:
Seed - 10.8%
Private - 14.1%
Public - 2.9%
Team - 12.0%
Advisors & Legal – 7%
Staking Rewards & Liquidity Mining – 28.2%
Operational Reserves – 25.0%
Liquidity Provision Risk Management
At the highest level, risk will be managed by only making available a percentage of the liquidity pool available for loans to iGaming companies.
Royale has developed a risk management policy based on the following four pillars:
Accept risk is inherent in liquidity provision
Providing liquidity cannot be done without risk, so it is imperative that risk is accepted and managed effectively. Royale will always strive to ensure that balance is achieved in its liquidity provision portfolio. Our policy is designed to ensure that we have assessed opportunities adequately, that there are early warnings when risk is increasing. In essence we strive to ensure that there are no nasty surprises.
Avoid risks that are likely to harm Royale
Every liquidity provision opportunity will be rigorously assessed to ensure that taking on the client will not create financial or reputational damage to Royale. A balanced portfolio will be created where the majority of clients represent low risk. Medium and high risk opportunities will be considered where appropriate ongoing risk warnings can be monitored and action can be taken.
At no time will Royale knowingly complete a transaction that will damage the protocols reputation and will always carry out sufficient due diligence to make sure that this is unlikely.
Reduce risk where possible
Where provisions will be put in place with each loan to make a negative outcome less likely to occur, or to minimize its impact should it occur. Risk reduction strategies will differ depending on circumstances and may include, but or not restricted to, limiting the amount of liquidity provided, only providing draw down facilities based on agreed trigger events, or offsetting risk by requiring the client to insure themselves against default.
Portfolio monitoring
Royale will always actively monitor the performance of its clients. The risk profile of each client will be regularly assessed and KPIs have been put in place to monitor this.
Insurance
Protective mechanisms - 1. 5% stablecoin buffer 2. insurance coverage that we will purchase 3. insurance coverage that users and iGaming operators can opt into themselves 4. Royale Reserve - potential 30% slashing
2.1.3 Liquidity Provider incentives
Liquidity within De-Fi is an essential component of network stability, this will always be aligned with the networks growth rate, and a constant flow of incentives to liquidity providers will be allocated thus keeping sustained collateral positioning.
Note: Token policy is implemented to stabilise the network by the governing council that protects the interests of the token holders until the DAO is 100% autonomous.
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