Royco V2

Rejected venues wait the longest for re-review; a rejection has to earn another look before the scheduled date.

Royco V2 is a marketplace where protocols post incentives to attract deposits and users take those offers. At the 2026-08-14 survey it held about $25M in TVL across four chains, a quarter of our $100M materiality floor. Rejected on size: one practice advising 100 households moves $1M to $8M into a venue on the same research, and below $100M TVL that book becomes the exit crush. Size alone decides it, whatever the protocol’s quality. If it crosses the floor, the incentive-denominated nature of its yield would be the first question in a full review.

Kill criteria: the events that revoke this verdict
• TVL sustained above $100M for 30 days

The research file

Mechanism applicability

Royco’s current V2/Dawn product is a perpetual risk-tranching protocol, not merely the earlier incentive marketplace described in the original survey thesis. Each market splits an underlying yield source into a Senior tranche with priority and conditional first-loss protection and a Junior tranche that absorbs losses first for amplified yield. That establishes structured exposure to the underlying venue, tranche coverage and market controls within the below-materiality application; it does not validate any tranche.

Current observation and control applicability

The DefiLlama protocol API read on 2026-08-15 showed about $23.0M of tracked Royco V2 TVL across Ethereum, Arbitrum, Base and Avalanche, below the shared v1 dossier’s $100M line. Royco’s current site showed live Senior and Junior markets. Its security disclosure describes a 3-of-5 multisig, 24-hour to seven-day timelocks for privileged changes, and instant pause authority. Current markets, coverage ratios, oracles, downstream venues, audits and incidents remain deferred.

Exit applicability

Royco tells allocators to compare lockups, liquidity and withdrawal mechanics by market. Its current materials describe normally liquid perpetual tranches that may enter an Observation Period after a drawdown, while curated vaults add allocation and withdrawal-queue dependencies. Exit therefore depends on tranche state, underlying venue liquidity and any queue or integrated secondary market. At the current aggregate size, a practice position could dominate one tranche’s capacity.

Why the class rule decides

The shared v1 below-materiality dossier controls this application despite the product pivot. Reopen only after reproducible surveys show at least $100M of Royco V2 TVL continuously for 30 days and market-level tranche assets, coverage and exits remain observable. Then review each market separately for underlying eligibility, Senior/Junior loss waterfall, observation rules, governance and oracles, contracts and audits, incidents, concentration, fees, downstream counterparties, and stressed withdrawals. Threshold passage would trigger review, not validate first-loss protection.

Sources

The claims above trace to these. Where a number could not be independently verified, the thesis says so.

• Royco — current Dawn markets and tranche model · primary · accessed 2026-08-15
  Supports: Senior tranche, Junior first loss, market capacity, lockups, liquidity, withdrawal mechanics
• Royco — Dawn security and control disclosure · primary · accessed 2026-08-15
  Supports: 3-of-5 multisig, timelocks, pause, oracles, audits, withdrawal queue, downstream venues
• DefiLlama — Royco V2 survey record · secondary · accessed 2026-08-15
  Supports: current TVL, supported chains, yield category

Inherited controls

The verdict above grades the protocol layer. Every position also inherits the asset it holds and the chain it settles on. The least safe layer sets the position’s grade, and the position table names which one that is.