Projects
![]()
No projects found
Investors
New
DAO Treasuries
DATs
Lend / Borrow APRs
Chains
Categories
Spaces
Ecosystem Spotlight: Root Finance
Recorded: July 24, 2025 Duration: 0:39:03Space Recording
Short Summary
Root Finance is set to revolutionize the DeFi landscape on Radix with its upcoming launch, aiming for a total value locked (TVL) of 10 million while introducing innovative lending features and a new token to enhance user engagement and financial stability.
Full Transcription
Thank you. Thank you. Hello everyone.
I'm just waiting for Maria to join.
Hi Komodo! Thank you. Can you hear me?
Hi Maria, yes I can hear you but there's an echo in your sound.
Is there still echo now?
No, it's fine. Oh great. I'm trying to have Kamada on.
Let's see if he wants to accept or if he can.
Yeah I just sent him a message too
how are you today farah i'm good it's almost the end of my day today
but oh as well it's it's dan's birthday so i guess like yeah
today's all about just dan's birthday that's all what the
conversation on telegram was today right the legend the one and only
Let's see, is Komodo able to join?
Yeah, he can't.
But I can't hear, but I can't see him as a speaker.
Is he not able to accept, maybe?
I do see him as a speaker, so maybe try and accept yourself.
Komodo, can you hear us?
Yes.
Okay, perfect.
What's up, everybody?
Okay.
Okay, so good.
We can hear you.
All good.
How are you doing today beautiful what about you
oh good oh good it's a nice day nice new day today
kind of hot but uh yeah we have to uh-huh we have to get used to it. This is how summer is. It is what it is.
Yeah, exactly.
So, hello, everyone. Great to have you with us for another ecosystem spotlight.
Today we're joined by the team of Root Finance and specifically Komodo.
Is this how you pronounce your name?
this is how you pronounce your name yeah yeah exactly komodo okay komodo uh one of the standout
Yeah, yeah, exactly.
Komodo. Okay.
defi projects on radix focused on helping users put their assets to work through smart accessible
strategies so let's look today we're going to get into what root is all about their updates and how
they actually they're envisioning of growing and evolving on Radix.
So welcome, Komodo, or aka The Root Father.
Great to have you with us.
Thank you very much, Farah.
Why do they call you The Root Father, by the way?
Because it's just a funny nickname, you know?
I really enjoy the movie Godfather.
And so I thought, why shouldn't i call myself uh the the root father
oh nice nice i didn't even think about that i just thought as a
as like the founder so you're kind of like the root father yeah me too right yeah Right? Yeah. Okay, so let's get right into it.
Can you introduce Root Finance and share the story behind it?
Sure.
So Root Finance is a decentralized lending and borrowing protocol operating on the Radix DLT
where lenders and borrowers interact within an over collateralized market environment.
And it's a non-custodial liquidity protocol enabling users to participate either as depositors or borrowers.
And depositors can earn passive income by providing liquidity to the market.
Whereas borrowers can obtain funds in an over collateralized manner.
Nice, nice. Okay, so I've seen that, I've read somewhere that you guys had many
experience, your team had many experience building with the EVM space.
What was the catalyst or why did you even switch to Radix? So our team has been working full
time in crypto since 2018 basically and we got in touch with the Radix
project in 2019 so when Radix wasn't live, actually, we participated in the ICO.
So we've been hardcore Radix supporters since the beginning.
And, you know, operating full-time in crypto and in DeFi,
especially in the EBM ecosystem,
since it was the first ecosystem to build a decentralized application.
You know, DeFi was born in 2019 on Ethereum.
One day we thought, why don't we build a decentralized application on Radix, which is the chain that
we love so much, we support, we invest it in.
Why don't we build something that we would like and we would love to use Radix?
So, you know, that was the first idea behind Root.
You know, it wasn't simple because actually the core team of Root isn't composed by full-time
developers. So we needed to hire developers. We needed to hire, you know, marketing specialists.
you know marketing specialist it was just a random you know mix of combinations
during time but eventually it all play out pretty fine I think that's awesome
so basically wow you've known Ralex since 2019 yeah I did not know that I
thought it was more like recent recently during the recent
years participating even in ICO that means like literally you were there since the start
OG project wow yeah yeah yeah wow okay so when you when you thought about building roots so you
said you you thought i want to build something that I actually like and love doing, right?
Yeah.
So what specific problem in lending did you think that you want to actually solve
and then that's how you chose to build Root?
Is there any specific reason?
Yeah.
So at the moment, there was only WeFT operating as a money market on Radix.
And there were very, very nice projects in the DEX space, such as OC, DeFi Plaza, and C9.
So we thought, you know, it would be a very nice thing to build another money market with different features, a more EVM UX oriented.
So we really took inspirations from apps like AVE compound to build the UX of root.
So, you know, that was our main idea and also working full-time in crypto and
having our own investments in crypto actually some of us work in asset
management in crypto we use a lot money markets and lending and borrowing
applications so we know that having many, many money markets
on a blockchain is very important
because you give the possibility to defy users
to interact with different protocols,
different interest rates,
and different strategies, of course.
So having two lending a borrowing application
enables people to you know access a very big variety of possibilities like
arbitrage leveraging their positions so that was the idea behind creating root
also I like that I mean it's always important to have, even if there is already in the ecosystem
a similar project, you can always be different in your own ways, you know, and also giving
the option for users to choose what they want to use, which platform they want to use.
So that's really important. And it obviously should be present in all ecosystems you know
and i think already it already is so even if radix isn't as big as others we already have
these lending and borrowing platforms which is really important so yeah i definitely side with
you on this as well i want to ask you what was kind of the most rewarding aspect of building Root Finance?
Oh, definitely, you know, seeing the support from the Radix community, 100%. Like, having the opportunity to build a community that supports you, talks with you,
asks you questions, and, you know, actually uses something that you have created was uh was amazing
and it's you know still amaze me you know it's uh like root is like a little child child which is
growing which will continue to grow but seeing that something someone is using, actually, your creation is quite nuts, you know.
And also seeing that TVL, you know, surpassed 1 million, then we reached 2 million.
We actually, I think the all-time high was 2.5.
That was such an incredible accomplishment for us.
such an incredible accomplishment for us.
It was like, as our core DeFi users is,
that was really something for us
to see that something that we created
was actually not only used,
but appreciated for people.
I just wanted to ask you about TBL as well,
because I've noticed when I was going back and doing my research that you actually launched in around mid-October, I think, 2024.
And you quickly reached around 350k in TBL.
So that was actually really, really good.
I thought, what did you say the maximum again was?
Around 2.5.
Wow. Wow.
Wow.
At that moment, we were the 250 ranked on DeFi Llama on the lending and borrowing platforms in the overall DeFi rankings.
So that was something to be it's huge yeah that's huge
that's a big accomplishment to be honest i think right now i can see you you're around 500k right
is that correct um actually no because defy llama doesn't count lsulp and doesn't count the borrows
which are often used as leverage.
So that's actually TVL.
So the right TVL at the moment is 1.250k million.
So 1.2 million.
That's what I wanted you to also clarify.
Okay, that's awesome.
I mean, it all depends on the market, you know, and how the market is reacting. So I think this is pretty normal. And it's also pretty, it's a pretty good number.
Yeah, yeah.
Okay, what? Okay, I think Maria has some questions.
We do post a lot about Scripto, how it's safer, how it makes building smart contracts more intuitive.
But I wanted to hear it directly from you.
How do you think it has shaped root finances, lending and borrowing features, building it in Scripto versus Soliti or another language?
Oh, actually, that's something that a dev would be more suited to answer
this question but I can give
you their feedbacks
on Scripto, they really find
themselves
working very well with
Scripto, actually we
hired some crypto specialists
in the space so
you know the
process was moved.
They were constantly managed
and helped by the Radix Foundation.
So it was a beautiful experience overall for them.
That's their feedback, of course.
Since I'm not a developer,
I cannot, you know, go into details.
Right.
Okay, so I'm not going to ask you any more about that,
but maybe we will chat with them and make a post about it.
Sure.
It's quite interesting.
Of course.
But you do have some other different things.
Like you have a specific interest rate model designed to keep rates sustainable.
Yeah.
While at this point we're rating risks.
Can you walk us through that?
Sure.
So basically the interest rate model of Root is designed to be sustainable in every market condition.
Basically the interest rate model is based on the utilization of the pool.
So the more a pool is utilized, the more the interest rates and the less the pool is utilized,
the more the interest decreases. So basically, when there is a high utilization of assets, so a lot of borrows are made by users,
the interest rate will be higher in order for people to repay loans or for depositors to deposit assets and earn a greater interest.
and on the contrary, when the utilization is low,
the interest on borrowers will be low,
so that means that people will be incentivized to take loans.
So that's very sustainable,
and we actually took inspiration from the interest rate model of AVE,
which is very safe, is audited, has years of backtesting, and it
worked pretty well.
Oh, I see.
So that's how you manage risk with interest rates.
Yeah.
It's kind of self-regulating at this point, by the way, you built it.
Yeah. Yeah.
Yeah.
And that's interesting.
So when you're talking about the experience about lending and borrowing,
how would you walk us through a simple, the user journey, basically?
So how would you simplify the borrowing process for users?
What steps do they have to go through?
Oh, sure.
So Root is very easy to use.
As I said, we built the user experience of Root
to be a very easy decentralized application to use.
You just have to supply some tokens, some assets.
You can supply XRD, X assets such as WBTC, WES, stablecoins, some MIM coins.
And once you have deposits, those assets, you can actually take loans. So once you have deposited those assets,
based on the LTV, which is the loan to value parameter, every asset has a loan to value
parameter based on the risk of the asset, the liquidity of the asset, you can actually take
a loan. So for instance, if you want to increase your XRD position because you have $1,000 of XRD you can
deposit on route $1,000 of XRD you can take a loan of $500 so you actually take
a loan of a 500 USDC and with those newly fresh 500 USDC, you can do whatever you want.
You can increase your XRV exposure, you can deposit those USDC on other labs, which would maybe offer better APIs.
APIs. So that's
So that's how it works.
how it
works.
When you talk about the user
experience, some users, I think,
including me, find it a bit
hard to actually navigate and
actually understand
the process quite well. Do you
offer as well any
ways to teach people or to show
them how they can do this?
Like any tutorials that you have?
Sure.
On Twitter, we have a bunch of tutorials.
Actually, tutorials about strategies where we teach simple stuff such as increasing and leveraging your position
or doing those delta-neutral strategies with LSULP and XRD or doing arbitrage.
You know, there are a bunch of tutorials on our X account and guided explanations.
So people who don't find themselves confident in starting their journey on route they can actually go to our
documentation section or on X they will find a bunch of information there
otherwise they can you know join our telegram channel or DM us and our
moderators they will you know answer them and we'll teach them everything they need that's great because i mean one of the the you know the hard things about crypto is actually
explaining these concepts to people and actually teaching them these strategies because i know a
lot of people are afraid to actually uh to borrow because of this because they're afraid that they
might get liquidated let's say so this is i think it's a very important part that you should,
that any project, any borrowing and lending project
should focus on kind of making sure that it's clear for everyone, you know?
Yeah.
So it's good that you have this as well.
Yeah.
And in terms of going on from that,
how do you communicate risks
and important information that users should know, especially risks? Oh, we have
a very, very long section in the documentation. Very long. Very, very long section in the documentation where we explain risks related to the liquidation,
related to money market parameters, related to market conditions, volatility.
So it's a good thing to know is that DeFi can be risky, can have risks such as, as I said, volatility, it can
be liquidated.
So you should always invest what you can afford and always read the documentation first.
So guys, read the documentation, always do your homework, and if you have any questions
we are here to answer
Great
I have a question about that
if I may step in
How do you set and adjust
the liquidation thresholds?
So the liquidation thresholds
are based on the assets
so every asset has their liquidation threshold.
And when the liquidation threshold gets triggered,
the liquidation mechanism starts.
So basically, a part of the loan gets repaid
by swapping the collateral for the borrower asset.
And by doing so, we reduce the risk of the position by repaying the loan with the collateral
using indexes on Radix, such as Kaviar 9 and OcSwap.
That's how the liquidation works.
And every asset has a set parameter,
every asset has a liquidation threshold based on its risk.
I see, interesting. And then I also have some questions about your protocol reserves and
bad debt. I'm going to give some context here before asking. Yep. Because so protocol reserves in this case,
what I mean is the funder assets
that are set aside by the protocol or platform
to cover expected losses.
And the bad debt,
it's about loans or obligations
that are not getting repaid.
So basically it's the user's default.
So my question is is how do you approach
managing those protocol reserves and bad debt? So basically the bad debt is managed by collecting
protocol fees and keeping them into the protocol to have more liquidity just in case, you know,
bad events can happen.
And, you know, also in the next period we will have,
I'm spoiling a very important thing,
but we will have the root token coming. So in case of bad debt or any event such as bad debt, that will be covered by the root token.
And what about extreme volatility scenarios?
Like all the market going very high or down.
I'm not talking just a bearable market, but like extreme periods.
How do you handle those?
Oh, the extreme volatility periods are handled by money market parameters.
So LTVs are a big factor.
So you cannot take very big loans.
And also the liquidation thresholds parameters help us in extreme volatility
periods since when the liquidation threshold gets triggered,
there is an immediate liquidation.
So like every other money market,
we rely on specific parameters such as LTBs,
such as liquidation thresholds.
And we also rely on the technological stack of Radix, which is very performant.
And yeah, that's how we manage those periods.
I wanted to also discuss a situation that occurred last week which obviously you are aware of it's about the hug
the hug situation so we know that i think it happened last week right yeah yeah so i i would
like for you to touch a bit on it and just talk to us about what what happened there why was hug
available with such a high ltv and how you're planning or how you planned to
change it in the future. Can you touch a bit about that? Of course. So
regarding the hug situation, quite simply a user attempted to manipulate
the token price in their favor, intending to use it as collateral to borrow XRP and run away with the asset.
However, the plan didn't work as expected, since he didn't manage to escape with much,
because the price of the collateral actually dropped while he was trying to increase his position.
And, you know, Root handled the situation by temporarily disabling deposits of MIM coins,
like HAG, WoWo, and Yearly, and in order to prevent similar strategies.
And we also chose to not immediately liquidate the position to avoid further damage to Hug Price,
since it's a pretty delicate moment for Hug and its community,
and we've always been very friendly with the Hug community since day one,
so that's why also we had a relatively high LTV on Hugg.
We always had communication with the Hugg community,
with the Hugg founders.
So that's why we did that.
And, you know, prior to one week ago,
it was a very nice thing to have such a great LTV on HAG and the HAG community was very
happy about it. It has been always a very important collaboration between
Root and HAG. But you know sometimes this thing happens. The most important thing, as I said, is to, you know, be fast in this moment.
So we'll perform partial liquidation at strategic moments,
minimizing the impact on the market.
And in the meantime, you know, the protocol will absorb the issues using fees generated by lending and borrowing.
And as I said, some mechanics in the upcoming root tokenomics should play a role.
But it's better to not spoil that just yet.
But it's better to not spoil that just yet.
Thank you for clearing that up.
I mean, of course, it was a very unfortunate situation,
but I'm glad that your team also were fast in coming to a resolution,
actually, doing some changes that will prevent that happening in the future.
So that's also really important to do.
Yeah, the damage isn't really big, to be honest.
It's like a 20k damage.
So for a 1.2 million protocol, it's not as big as a problem.
It can be solved in many ways.
So at the moment, we are trying to solve it in the
most sustainable way, which is covering it with lending and borrowing fees. And also a piece of
the root token allocation will be allocated to solve this issue. And, you know, the most important
thing is to not focus on the problem, but focus on the solutions and keep building to make things better.
You know, like shit happens.
Sorry for the word.
But the most important thing is to focus on solution.
To learn from it.
Learn from it.
That's fine.
And also, you know, such things in DeFi happen every day.
And it's also a way to improve.
So for the future versions of Root, we will have much more experience and data to handle those kind of situations and to improve the parameters.
situation and to improve the parameters.
Right.
Talking about the future, let's move on to how the next six months will look like for
Root Finance.
What are some features or improvements you're going to launch soon?
So next six months will be very, very crowded for Root because we are aligned with the
RADS Foundation to build a crazy incentive campaign on Root. So we'll be allocating a lot of funds
for lenders and borrowers. So they will have not only a lending and borrowing APY, but they will also
have an incentive APY on the DAP. So basically a lot of borrow will be like free because you will
also be incentivized to take loans. So imagine that you have to pay a 5% borrow APY if you want to borrow USDC.
But borrowing USDC gives you also the opportunity to earn a 10% APY in XRD incentives.
So basically, you're not only having a free loan open, you're actually earning from it.
you're actually earning from it.
And that's the same thing that will happen to some assets
that you will deposit.
So you will have a pretty crazy APYs in the next six months.
And also we are working on the POC of the V2 of root
with a lot of implementations.
And we'll keep getting in touch with the foundation
to be very aligned with them.
We know that projects like us are very important
to the community, to the ecosystem.
So we'll work very, very close with the foundation
to provide new services,
the incentive campaign, and hopefully the root token and the B2.
Yeah, indeed, the next months are going to be super busy for Radix,
and it's going to get a lot of attention.
So yeah, it's important for people to already get used to root finance because it's one of the main protocols that are going to be included in the Radix rewards. So what about new assets? Are you planning on supporting new tokens?
Not at the moment. Not at the moment. I think that we need to focus on the assets that we
already have. We really want to focus on XRD and LSU at the moment, because they are the main ecosystem assets,
and it's important to give those assets the importance that they have in the ecosystem
and to incentivize them at the moment.
Also, the X asset will be incentivized, because the X assets are used on the Radix chain.
So we are not planning to put new assets on root in the next month.
But in the V2, we will implement new assets for sure.
Well, I can see that in the short term you have a really busy period
yeah
what about kind of the long-term vision for root finance
how do you see root finance evolving in let's say two years
I would love to see root move change
first of all I would love to see root succeeding
with the overall Radix ecosystem,
because Root succeeding means that also Radix is succeeding.
And I see Root becoming a multi-chain protocol
where you can have collaterals on some chains and borrows on other chains.
So a fully composable and interoperable protocol on many other chains.
And I would love to reach the 10 million TVL mark.
That would be incredible for us.
Wow.
Yes, you can do it. Why not? Yeah, you know. It's not too ambitious. Don. Wow. Yeah. Yes, you can do it.
Why not?
Yeah, you know.
It's not too ambitious.
Don't be too ambitious.
Yeah.
I mean, don't be...
You have to be
overly ambitious.
Why not?
And that's also free,
you know, to be ambitious.
Of course.
Of course.
You're not going to win
if you are not ambitious.
If you don't think that you can actually reach this goal, then what are you doing you're not going to win if you are not ambitious.
If you don't think that you can actually reach this goal,
then what are you doing in the meantime, you know?
So always have a goal in front of you and think that you can reach it.
Why do other protocols reach it and not you, for example?
So always think that you can do it.
Of course, of course.
And we also take advantage of our deep knowledge in DeFi.
We also have a lot of people working in DeFi, in the EVM ecosystem,
and we are trying to bring them into Radix,
not only with their capital but also with
their ideas because a chain with new depth a chain with activity a chain with
development is a winning chain so that's also one thing we are going to focus on
while we build new features on route so bringing new people into Radix. New minds
into Radix. New ideas into Radix.
100%. I mean, that's
the aim of the reward campaign
at the end of the day, you know?
This is what we want.
So hopefully with the reward campaign
this will be... we're going to
make that happen.
Yeah, that would be amazing. And once it does, we have to be ready be it. We're going to make that. Yeah. We're going to make that happen. Yeah. That would be amazing.
And once it does,
once it does,
we have to be ready for it.
Yeah.
All right.
Should we move on
to the fun round questions?
Yeah, sure.
All right.
I'll take that as a yeah.
Let's go.
Okay.
So, if you could have every crypto user to do one thing before trying to use DeFi, what would it be?
Like one requirement or one activity, one course, anything.
