Sprout Academy 4: Mapping Out The Root Ecosystem

The vision for Root is to build the first comprehensive operating system for DeFi, gathering together all DeFi products and services under one roof with simple, standardized, streamlined user journeys. Even prior to launch, traction has already been built in delivering on this mission. With the Root dApp going live shortly, this article maps out the Root ecosystem as it currently stands, explaining which Stems are in development, which partners have been secured, and how the core Root products will bring them together to drive revenue for Root stakeholders. Let’s dive in…

Growing The Trunk: Mapping Out Root’s Core Products

At the heart of the Root ecosystem, there are three products that create a self-perpetuating revenue flywheel for Root stakeholders. They form the trunk of the Root ecosystem, from which everything else grows. The core product suite consists of:

1. Orchard: This is where Root’s revenue generation process begins. Orchard is Root’s Omnichain Governance Aggregator, which capitalizes on revenue opportunities offered by next-generation DEXs. Using bribes and accumulated governance power, it creates a self-perpetuating revenue flywheel effect for the Root ecosystem. Portions of the funds it generates are flowed into Bloomworks, Root’s DeFi Lab.
2. Bloomworks: Bloomworks is Root’s DeFi lab, which incubates Stem protocols that target key high EV DeFi market inefficiencies. Each Stem protocol creates a new revenue stream for the Root ecosystem. Additionally, Bloomworks’ central team ensures a standardized and streamlined user experience across all Stem protocols. Together, Stem protocols will grow into a comprehensive operating system for DeFi called Sprout.
3. Sprout: Sprout is the Operating System for DeFi, which emerges out of the network of Stem protocols created by Bloomworks. It is designed to create a “Robinhood of DeFi”, bringing all DeFi products and services under one roof. In doing so it will deliver an accessible, streamlined, and integrated “one-stop shop” experience for DeFi users. So, Sprout provides Root with a realistic, gradual model for capturing the whole DeFi market and delivering outsized revenues back to its stakeholders.

In summary, Orchard generates the initial revenue for the Root ecosystem, part of which is invested into Bloomworks, which develops Stem protocols that are integrated into the Sprout operating system for DeFi. This model provides a unique, gradual and realistic development process for Root to capture the entire DeFi market, delivering outsized returns back to token holders.

Even prior to launch, the model is already proving itself out, having secured multiple DEX partners for Orchard to apply its omnichian governance aggregator to, whilst also initiating several Stem protocols. So, let’s have a look at the partners that have been secured and the Stems that have been created to date…

Nourishing The Soil: Introducing The Partners That Root Has Secured To Date

Orchard will ultimately be harvesting revenue across all sources of omnichain liquidity. However, Root will be launching with 4 initial partners that Orchard will begin by focusing on. These, along with several soon-to-be-announced new partners will form the soil from which the Root ecosystem grows. They are:

1. RAMSES: RAMSES is a ve(3,3) DEX that provides a native liquidity layer & decentralized exchange on Arbitrum. Root’s partnership with RAMSES will initially involve an exchange of tokens between each protocol. Root will use its allocation of veRAM tokens to operate its Orchard’s Omnichain Governance Aggregetor flywheel on RAMSES. Meanwhile, Root will bring increased liquidity to RAMSES, applying long-term, non-mercenary strategies that support the health of the RAMSES ecosystem.
2. Chronos: Chronos is set to become a power player ve(3,3) DEX on Arbitrum, and Root’s collaboration with them brings mutual benefits for both protocols. Root brings sticky liquidity to reduce sell pressure on CHR tokens while accruing governance authority for the mutual benefit of both protocols. Root deploys bribes, and Chronos provides CHR tokens, expanding Orchard’s flywheel. There will again also be a token swap with Root receiving veCHR from Chronos. This reflects both protocols’ long-term intent to build a liquidity powerhouse on Arbitrum.
3. THENA: THENA is a top ve(3,3) DEX, bringing new protocols to BNB Chain. By opening a free market for THE emissions, THENA allows protocols to bootstrap and scale liquidity. The partnership accelerates THENA’s growth and enables Orchard to kickstart its omnichain vision. Together, Root and THENA make a natural pair. Root, an omni-chain ecosystem by design, will also join THENA’s WARP accelerator to bootstrap ROOT liquidity on Binance’s Smart Chain, resulting in extensive liquidity growth and revenue generation for both parties. Again, there will be a token swap, with Root acquiring a substantial position in veTHE. This exchange will solidify Root’s position in THENA’s ecosystem and reciprocally allows THENA to benefit from our joint success.’
4. Equilibre: Equilibre is an AMM and liquidity marketplace built on the Kava chain. As part of the partnership, Equilibre will exchange an allocation of its governance token — veVARA — for an allocation of ROOT tokens. This exchange will help solidify a long-term partnership built on mutually-aligned incentives. It will also allow Orchard to continue with its omnichain expansion, giving exposure to an additional chain where it can apply its revenue-generating flywheel.

… and we have several more partners ready to announce soon.

The revenues harvested from these protocols will immediately build out the Root treasury, backing the value of ROOT tokens, whilst funding the development of Stem protocols. And this development has already begun…

Cultivating The Stems: Say Hello To Root’s First Stem Protocols

The Root dApp will launch with several Stems already under development, with 4 currently having been announced. With their diverse focuses, these first Stems demonstrate the unique variety of solutions that the Root & Stem model can deliver. The currently announced Stems are:

1. Seneca: Seneca is an omnichain DeFi lending protocol, which provides isolated lending markets for exotic collaterals. It allows users to borrow senUSD against yield-bearing assets and leverage their yield. senUSD is a collateralized stablecoin pegged to $1. Users will be able to borrow senUSD against the best assets across all major chains, allowing them to make their collateral liquid, or leverage up their yield. This will allow DeFi stakeholders to get more from their assets, by borrowing liquidity against vault receipts, liquidity positions, and LSDs. Meanwhile, protocol fees are shared with the holders of the governance token, veSEN, providing them with real yield.
2. Torus: Torus is revolutionizing liquidity distribution and yield across multiple prominent automated market makers (AMMs) including Balancer, Curve, and many more. By driving liquidity wars, mitigating centralization, and embracing the LSDfi narrative, Torus empowers users to actively shape the future of DeFi. The platform’s unique ability to offer bribes and unlock community-driven decision-making processes sets it apart from its competitors. As Torus continues to redefine liquidity wars, integrate liquid staking tokens, and optimize yield generation, it remains a pioneering force in the DeFi landscape. With liquidity distribution, yield generation, and decentralization presenting three of the most important challenges the DeFi market is facing, Torus answers to Bloomworks criteria of offering a solution to key market inefficiencies with high EV potential.
3. Codex: Codex is the prime Bunni boosting layer. Bunni is the premiere liquidity engine for Uni v3, powered by the veLIT governance. Codex provides a rewards boosting marketplace for Bunni. Users become cdxLIT holders to maximize their LIT gains, while liquidity providers access rewards boosting in a seamless manner. With Codex as an efficiency layer, Bunni may finally step up and significantly increase its deep liquidity. Codex enables LP-ers to gain full access to boosted $LIT rewards, regardless of their veLIT commitment. To ensure alignment of incentives, Codex enables the monetization of unused boosts. As cdxLIT holders earn extra rewards, there is more incentive than ever to pull LIT tokens from the market and lock them. As a result, the relationship between cdxLIT and LP-ers is completely symbiotic. The same way as Codex serves as a symbiotic force for Bunni. Bunni has made Uniswap v3 simpler and more rewarding. Codex takes it even further, making the entire Bunni experience smoother. Brace yourself for the Bunni x Codex Uni v3 domination!
4. Cordyceps: Cordyceps is an Omnichain insurance market for pegged assets, and a speculation market for related events. At its core, Cordyceps is about risk management in the crypto space. It provides insurance for pegged assets like stablecoins and LSTs, allowing users to hedge their positions and mitigate potential losses. This platform is not just for traditional insurance products, but also opens up the market for speculative insurance. This means you can bet on events that may cause assets to depeg, adding another layer of potential profitability to your crypto portfolio. As an Omnichain platform, it’s not limited to just one blockchain. This expands its potential user base and increases the types of assets that can be insured. Cordyceps therefore again shows a great example of how Bloomworks investment thesis plays out in reality. By targeting the insurance sector with a unique model, it focuses on a high-EV revenue market that is not currently well-addressed by the DeFi sector. It also offers a high potential for outsized revenue generation.

So, not only is the Root & Stem model already delivering a steady pipeline of protocols with high-EV market potential, it is also demonstrating how a comprehensive operating system for DeFi will emerge from them. Each Stem is focused on an entirely different solution to the DeFi market and shows how a complete one-stop shop for DeFi can organically grow out of the Root ecosystem. There are several more Stems currently under development and we look forward to announcing more of them soon.

Conclusion

Root has created an entirely new model for a DeFi protocol and the first to offer a realistic blueprint for creating a comprehensive operating system for DeFi. Even prior to launch, the model is showing its value with several partners secured and multiple Stems already in development. This will allow Root to launch with a powerful revenue generating ecosystem already in place and we can’t wait to go live shortly and give you the opportunity to become a stakeholder in it.

In the meantime, you can discover more by browsing our docs and joining the Root Discord community.