Jai Bhavnani is the Founder of Waymont Co, the developer of the Royco protocol.
In this episode of DeFi Frontier, Jai walks through how Royco evolved from an incentive platform into a risk tranching protocol connecting RWA issuers with both institutions and DeFi users. He explains what makes an asset worth tranching, and then navigates through a real stress test in progress for Royco, with the recent apyUSD drawdown triggering a 21-day observation period. Plus, we get a first take on what to expect from Royco Dusk, a new app for extending credit to Royco senior tranche holders, through an AMM-backed liquidity pool.
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💎 THIS EPISODE'S SPONSORS
🔒 KPK | Best risk-adjusted yield through automated vaults
🕛 NOON | The highest and safest stablecoin yield, built for the long term
👻 MANTLE | Aave V3 is live on Mantle
🐡 PUFFER INSTITUTIONAL | ETH staking solutions for scale
⚔️ KATANA | Deep liquidity & real yield
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⏱️ TIMESTAMPS
0:00 - Intro
2:37 - What is Royco? A DeFi risk tranching protocol
6:01 - Why RWAs are the future of onchain yield
11:32 - What is Royco Dawn and what does it solve?
13:30 - What is the perfect asset to tranche?
18:07 - Screenshare and explanation of Royco’s live markets
22:01 - Observation period: Royco's first stress test with apyUSD
25:05 - How seniors stay protected while juniors absorb losses
27:00 - What could end the 21-day observation period?
27:34 - Can you deposit or withdraw during observation period?
29:01 - Can seniors lose money in a Royco loss event?
30:04 - How Royco tries to restore markets to healthy status
31:25 - Estimating losses if 21-day period runs out for apyUSD
33:40 - Design for juniors to not get wiped out
37:40 - What is protected? Tranching vs insurance
41:23 - Is security in DeFi cooked? How we move forward
43:49 - Royco’s decision to introduced delayed settlement
47:54 - Royco Dusk: Extend credit to RWAs with AMM-backed LP
50:43 - How seniors will get instant liquidity on Dusk
53:42 - Closing
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🔗 GUEST LINKS
► Royco website: https://royco.org/
► Royco on X: https://x.com/roycoprotocol
► Jai Bhavnani on X: https://x.com/jaibhavnani
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DISCLAIMER: Nothing said on The Edge Podcast is a recommendation to buy or sell tokens or securities. This content is for educational and entertainment purposes only. Nothing shared here is financial advice. Any views expressed by hosts or guests on the show are solely their opinions. Always do your own research. DeFi Dad, Nomatic, and guests may have positions in the assets or other matters discussed in this podcast. DeFi Dad invested in Royco's seed round in 2024.
