Royco
1 known investors
Royco is a DeFi protocol offering transparent yield markets and vaults where allocators can select yield sources, structure exposure through senior/junior tranches, leverage loops, or fixed-rate terms, and manage positions directly or via independent curators. It targets crypto capital allocators and includes security features such as independent audits and block-level monitoring.
Also known as Royco Dawn · Royco Protocol
Investors · 1
Company profile
researched Aug 2026Royco is a decentralized finance protocol offering transparent yield markets for capital allocators. Each Royco market begins with a single yield source — a lending market, a staking deposit, or a tokenized real-world asset — and splits it into three tranches: a Senior Tranche (ST) that earns the lowest yield but has seniority and access to secondary liquidity; a Junior Tranche (JT) that earns the highest yield by serving as first-loss capital and receiving a risk premium paid by Senior in addition to base asset yield; and a Senior Liquidity Provider (SLP) tranche that earns a premium plus trading fees by supplying secondary exit liquidity for Senior. Yield flows from ST to both JT and SLP according to pre-defined ratios, paying for Senior's downside coverage and liquidity. Senior positions are not impaired until the junior capital in front of them is exhausted, and when the base asset draws down the protocol enters a time-bounded observation window before allocating losses, so junior capital absorbs only persistent losses rather than temporary volatility that reverses within the window.
Allocators can interact with markets in several ways: holding a tranche, posting tranche shares as collateral on lending markets, adding leverage through an integrated loop, locking a fixed rate via an integrated term market, or entering and exiting through the Senior LP pool. Royco presents two allocation paths — direct allocation, where the user selects a market and yield source, structures seniority, leverage or fixed-rate terms, and manages rebalancing and exits; and delegated allocation through vaults, where the user chooses a mandate and an independent curator allocates within its scope while the depositor monitors NAV, holdings and performance. Documented vaults include the Senior Vault (srRoyUSDC), a USDC product curated by Dialectic that allocates across multiple Senior tranches and may use Senior tokens in lending protocols for levered exposure, and Royco ETH (roywstETH), also curated by Dialectic, which borrows USDC against wstETH collateral and deploys the proceeds into srRoyUSDC to capture staking rewards plus the carry spread.
An earlier version of the protocol, the Incentivized Action Marketplace (IAM), let anyone create markets to incentivize onchain transactions: Incentive Providers offered tokens or points to Action Providers who performed onchain actions, with offers and counter-offers converging on a price before transactions were programmatically executed and incentives atomically allocated. IAM came in two forms — Vault IAMs, which incentivized deposits into an underlying ERC-4626 vault via a Wrapped Vault and Vault Market Hub, and Recipe IAMs, which used the Weiroll scripting language and disposable, self-custodial Weiroll Wallets to incentivize arbitrary transaction sequences. Those contracts remain live and non-custodial but are no longer the focus of development; the current version is Royco Dawn, a risk-tranching protocol.
Founding story
Royco's chief executive, Jai Bhavani, previously co-founded Rari Capital, an early DeFi money market implementation, and subsequently co-founded Waymont, described as the self-custody crypto platform behind Royco; he later directed his efforts specifically to Royco. The project's public presence dates to April 2024, and its stated aim was to broaden access to high-yield onchain deals beyond whales and large-following participants.
Business model
Royco operates an onchain, non-custodial protocol rather than a custodial service. Value in the system is distributed among tranche participants: Senior pays a risk premium to Junior for first-loss coverage and a liquidity premium plus trading fees to Senior LPs. Vault products are managed by independent, professional curators who allocate depositor capital within a defined mandate. Legacy Incentivized Action Market contracts include a protocol fee and a frontend fee tracked by the Wrapped Vault Factory.
Protocol-level fees are referenced in the legacy Incentivized Action Market contracts, where the Wrapped Vault Factory tracks a protocol fee and a frontend fee. Within markets, premiums and trading fees are paid between tranche participants.
Traction
The company's website reports $3.1B in all-time volume, with total value locked, live markets, market TVL and vault TVL not displayed. Two curated vaults (srRoyUSDC and roywstETH), both managed by Dialectic, are documented. During an earlier phase, a waitlist reportedly drew over 5,000 users representing more than $670M in user-controlled wallet assets (not TVL). The legacy royco-iam GitHub repository shows 73 stars, 20 forks and 442 commits.
Latest developments
The protocol's current version is Royco Dawn, a non-custodial risk-tranching protocol; the earlier Incentivized Action Marketplace repository has been marked as no longer maintained. Vault products srRoyUSDC and roywstETH, curated by Dialectic, are documented, and the site advertises live markets, 18 audits, continuous monitoring by Hypernative and multisig-plus-timelock upgrade controls.
▸Full profile — market position, technology, go-to-market, history, risks & controversies
Market position
Royco structures a single yield source into distinct senior, junior and liquidity-provider tranches with smart-contract-enforced first-loss coverage, secondary exit liquidity for otherwise illiquid yield positions, and an observation period that prevents transient drawdowns from slashing junior capital. Tranche shares are composable across DeFi for borrowing, leverage and fixed-rate exposure, and both self-directed and curator-managed allocation paths are offered.
Technology
The protocol is implemented as onchain smart contracts and is described as non-custodial, trustless and permissionless. The tranching design enforces downside coverage for Senior through smart contracts, uses an AMM pool composed of Senior tranche shares and the market's quote asset for secondary liquidity, and applies a time-bounded observation window before allocating losses to Junior. Legacy IAM contracts include WrappedVault.sol, WrappedVaultFactory.sol, VaultMarketHub.sol, RecipeMarketHub.sol and WeirollWallet.sol, built around ERC-4626 vaults and the Weiroll scripting VM. Tranche shares are composable across DeFi, usable as lending collateral, in leverage loops, and in fixed-rate term markets. Security controls include 18 independent audits and formal verification, block-level monitoring by Hypernative, and 3-of-5 council approval plus timelocks for critical upgrades.
Go-to-market
Crypto capital allocators, including those who want to build and manage positions directly and those who prefer delegated allocation through curated vaults; ETH and USDC holders seeking structured yield exposure; and, in the legacy IAM product, protocols seeking liquidity (Incentive Providers) and liquidity providers (Action Providers).
History
Royco first launched as a liquidity coordination marketplace — described as an order book for liquidity — introducing Incentive Providers alongside liquidity providers. It opened a waitlist in May 2024 and published a referral program. The Incentivized Action Marketplace contracts were later designated a legacy project: they remain live and non-custodial but are no longer actively developed. The protocol's current version is Royco Dawn, a risk-tranching protocol splitting yield sources into senior and junior tranches, with associated markets and curator-managed vaults.
Risks & controversies
Royco's documentation states that participation in its products involves risk, including potential loss of all capital deployed, and that the materials do not constitute investment advice or an offer of securities. Structurally, Junior tranche capital absorbs Senior drawdowns and can be slashed for persistent losses, and vault strategies such as roywstETH involve borrowing against collateral to deploy into other Royco products.
Compiled by commissioned research from 8 cited public sources — announcements, filings, and press listed under research sources below.
Key figures
latest reportedCompany-reported or press-reported figures, each dated to when it was claimed — not independently audited.
Timeline · 4
launches, deals, and filingsRoyco states that protocol activity is monitored every block by Hypernative as part of its security controls.
Royco documentation lists two automated vault products managed by curator Dialectic: Senior Vault (srRoyUSDC), which deposits USDC across diversified Senior tranches, and Royco ETH (roywstETH), which borrows USDC against wstETH collateral and deploys into srRoyUSDC.
Royco designated its Incentivized Action Marketplace repository as no longer maintained, with those contracts remaining live and non-custodial, and identified Royco Dawn — a non-custodial risk-tranching protocol splitting yield sources into Senior and Junior tranches — as the current version of Royco Protocol.
Royco rolled out a waitlist granting users access and priority levels based on connected wallet assets, alongside a live referral program.
Dated company events from announcements, filings, and press; legal rows summarize public dockets and regulator releases.
In the news
▸Research sources · 8
primary sources listed
- Roycoroyco.org · web
8 public sources were cited for this profile; the first-party ones are listed here.
Frequently asked questions
- What does Royco do?
- Royco is a non-custodial DeFi protocol that splits yield sources into senior and junior tranches for capital allocators.
- Who are Royco's investors?
- Royco's investors include Electric Capital.