Royco V2

Royco V2 does not clear our size floor, so we have not opened an individual review. It 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 size floor. One practice advising 100 households can move $1M to $8M into a venue based on the same research. Below the size floor, that book becomes the exit crush. Size alone decides this judgment, whatever the protocol’s quality. If Royco V2 clears the floor, the incentive-denominated nature of its yield would be the first question in a full review.

Review triggers: events that reopen the verdict
• TVL sustained above the retired TVL threshold for 30 days

Watched nightly: a warning on its venues or files, or a cited document that changes, reopens the memo. The first confirmation is due 2026-11-15.

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. These facts place the structured exposure to the underlying venue, tranche coverage and market controls under the size rule. They do not validate any tranche.

Current observation and control applicability

The DefiLlama protocol API showed about $23.0M of tracked Royco V2 TVL across Ethereum, Arbitrum, Base and Avalanche on 2026-08-15, below the shared v1 dossier’s size floor. 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. We have not yet reviewed current markets, coverage ratios, oracles, downstream venues, audits or incidents.

Exit applicability

Royco tells allocators to compare each market’s lockups, liquidity and withdrawal process. Its current materials describe normally liquid perpetual tranches that may enter an Observation Period after a drawdown. Curated vaults add allocation and withdrawal-queue dependencies. An exit therefore depends on the tranche state, the underlying venue’s 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 size dossier decides this case despite the product pivot. We will open an individual review only after reproducible surveys show that Royco V2 TVL has cleared the size floor continuously for 30 days and that market-level tranche assets, coverage and exits remain observable. We would then review each market separately for underlying eligibility, the Senior/Junior loss waterfall, observation rules, governance and oracles, contracts and audits, incidents, concentration, fees, downstream counterparties, and stressed withdrawals. Clearing the floor would start review, not validate first-loss protection.

Research status

This is a capacity-unproven record for Royco V2, not a quality rejection or approval. Reported TVL says how big the venue is, not what the client owns, who can change the rules, or how a position exits at a proposed size. The individual review opens when the protocol clears the size floor.

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 research above describes the protocol layer. Every position also inherits the asset it holds and the chain it settles on. The layer with the most administrative power sets the position’s effective control; that describes control, not quality or suitability.