Radiant Capital is a DeFi protocol and platform for under-collateralized loans, powered by its native RDNT governance token. By innovating risk assessment and social loss guarantees, Radiant aims to unlock wider access to decentralized lending. Let’s examine the workings and opportunities of RDNT.
Overview of Radiant Capital
Radiant Capital was founded in 2021 by a team of DeFi veterans looking to push the boundaries of lending risk models beyond overcollateralization.
Some key facts about RDNT include:
- Launched in June 2021 with a total supply of 10 million tokens.
- Governance token of the Radiant Capital ecosystem.
- Used for assessing borrower risk, claims payouts, and platform decisions.
- Backed by key funds like Spartan Group and Alameda Research.
- Tradeable on Uniswap and other decentralized exchanges.
By aligning incentives and assessing more dimensions of risk, Radiant seeks to unlock greater capital efficiency in DeFi.
The Problem With Overcollateralization
Decentralized lending has relied heavily on overcollateralization thus far — loans made against more valuable locked assets.
While this protects against default, overcollateralization has some drawbacks:
- Inefficient use of capital with assets unused.
- Limited use cases fitting the high collateral needs.
- Excess volatility risk from liquidations cascade.
This restricts the scope of DeFi lending and borrowers able to tap its potential.
How Radiant Capital Improves Risk Modeling
Radiant Capital pioneers a social risk model with two key innovations:
Borrower Risk Assessments
Machine learning evaluates borrower identity/creditworthiness for customized risk scoring using both on-chain and off-chain data.
This allows customized uncollateralized loans based on projected default probability.
Social Loss Protection
A portion of interest goes into a coverage fund to protect against defaults. Mutualized protection aligns community incentives for managing risk.
Together, these mechanisms allow extending non-collateralized loans and wider access while still preserving safety.
The Role and Utility of RDNT
As the native token of Radiant Capital, RDNT has multiple roles:
- Used in risk modeling algorithms to align incentives.
- Functions as a governance token for the protocol.
- Required for participation in coverage funds.
- Protocol fees used to buyback and burn RDNT.
- Staking RDNT provides access to risk assessment data.
This multi-faceted value accrual provides sustainable long-term utility for RDNT.
In summary, Radiant Capital introduces innovative social modeling of borrower risk to expand Decentralized Finance beyond overcollateralized lending. Its layering of machine learning and mutualized loss coverage unlocks new capital efficiency and wider participation.
With its proficient technical team and strong institutional backing, Radiant appears well-positioned to disrupt status quo assumptions about DeFi lending. RDNT tokens represent a promising opportunity to gain governance and upside exposure as the project fulfills its ambitious vision.