TLDR: Institutional capital is becoming vital in facilitating trading and broader activity in crypto and on crypto platforms. While continuing to support the existing ecosystem and users, the primary focus will move to use Radix’s core strengths in user experience, developer experience, and scalability to capture institutional interest that is most likely to succeed in bringing trade flow, liquidity, and value to Radix.
Radix’s position in crypto is unique. It has a far more ambitious vision than any other L1 or L2 and a product strategy to match. It is, and always has been, a grassroots movement with all the benefits and challenges that it brings.
The key messages pushed to date are (1) exceptional user experience (UX), (2) intuitive developer experience (DevX), and (3) linear (atomic) scalability. The Radix full-stack is not just a set of buzzwords but the pillars that support everything that has been done. To date, the focus has been on using these key pillars to bootstrap users, liquidity, builders, and capital on the network via grassroots efforts.
While tremendously successful at turning thinkers and thorough researchers into Radix zealots, this approach has yet to be successful at broadly appealing to crypto users or capital at large. Perhaps more importantly, despite belief from many of the merits of the network, this approach has not yet been reflected in the value of Radix compared to other platforms.
What Matters In Crypto
Ultimately, the only thing the crypto market cares about is where capital is being allocated. While token narrative is important, that narrative is increasingly being driven by where ecosystem activity is actually happening. The hype around tokens concentrates on where the next trend in crypto is taking shape and where crypto communities that are winning are gathering.
The market is also changing. Back in 2014/2015, crypto was 100% retail, and you could still make money manually arbing between exchanges. That is no longer true. The crypto market is now a $2.3Tn behemoth with $84Bn daily spot volume and $102Bn derivative volume.
This ‘trading flow’ is now 60-70% institutional and is shifting further in that direction. Market makers and hedge funds professionally intermediate it with capital under management that dwarfs many of the tokens they trade.
While retail may still drive token speculation, institutional capital facilitates it. The game is no longer just about capturing the speculative trade in tokens but also about making sure that professional capital moves volume on your network. Without that professional capital, your network or platform is functionally uncompetitive for end-users.
Outside of pure meme plays, the common trend of valuable platforms in the crypto space is their ability (proven or potential) to capture trade flow.
Both centralized and decentralized platforms that capture that trade flow are consistently the most valuable networks/platforms in the space, with examples including Ethereum, Solana, Coinbase, Binance, Uniswap, DyDx, and (most spectacularly in both rise and fall) FTX.
Right now, every institutional player in crypto is either developing a DeFi strategy or has already spun up DeFi-focused teams. So the core strategic question has been, ‘What can Radix do here to make the network more valuable?’ – and specifically, how to:
- Turn Radix into a platform where assets (that people care about) can be traded and used
- Allow liquidity to be brought at a size that affects the decisions of institutional and retail crypto users
- Become the preferred DeFi platform for the use and trade of these assets
The Institutional Edge
When Babylon did not immediately start creating the market impact and capital inflow needed, work began investigating complementary strategies to Project Ignition, Super Staking, RadQuest, and others.
The critical piece to answer was how to get institutional capital on Radix. The importance of institutional capital to Radix was highlighted in the blog about the 3 phases post-Babylon. Still, the strategies previously deployed need more of a hook to make that happen, organically or otherwise.
Validating Assumptions
On the fundamentals, Radix already has a great starting point – a platform with the best user and developer experience in the industry, and with RadQuest, it has an excellent way of onboarding interested end users.
However, the hypothesis on the importance of institutional flow first needed to be validated, and then a starting strategy on how to facilitate that flow into the Radix ecosystem needed to be developed.
So, a few months ago, RDX Works hired an experienced VP of Partnerships and started working closely with market-leading market makers such as Keyrock, Portofino, G-20, and a top 20 global hedge fund. These continuing working relationships are to confirm and iterate on what these institutions care about in DeFi. This has been incredibly helpful in formulating the next steps.
The insights that have been gained form the basis of the shift in focus to get capital and trade flow into Radix. They also lay out good paths to start providing value to these partners to ensure they can lean into the Radix ecosystem much more aggressively.
Ecosystem projects like Surge.Trade, Caviar Nine, Ociswap, DeFi Plaza, and more are all part of the picture, but the picture is incomplete.
First, there must be many more major crypto assets on Radix, not just USDT, USDC, BTC, and ETH. These assets also require MUCH more liquidity and must be easily accessible by everyone using the platform.
So, how can many more assets be brought to Radix with the market depth and access from day one that can truly benefit the Radix users and the Radix ecosystem? The starting point is the top 50 crypto assets by market cap, with a system that does not preclude rapidly expanding that list according to market demand.
To succeed, Radix can’t only be a place where anyone can confidently trade XRD, HUG, EARLY, WOWO, CAVIAR, OCI and the other great ecosystem tokens, but where anyone can confidently trade BTC, ETH, SOL, DOT, TON, SUI, APTOS and more. Achieving this is paramount to accelerating Radix’s rise to becoming the universal asset layer for finance.
It isn’t enough for these assets to be represented on Radix; it is also essential that there is deep and immediately usable liquidity in order to capture trade flow.
A Glimpse of the Future – Flash Liquidity
To help solve this, RDX Works has been developing two new systems. The first of these is code-named ‘Flash Liquidity’ and is the only one that can currently be discussed.
Flash liquidity is being designed and built with the help and feedback from the institutions mentioned earlier in this article. Work is starting with the Radix ecosystem dApps, technology providers, and relevant partners. It’s exciting, and more information will be provided by September.
The goal is that assets traded on Radix can benefit from liquidity across the entire crypto ecosystem, and any user (or dApp) can access that liquidity directly on Radix. That would mean low slippage and low fees to create a radically more efficient ecosystem primed to capture trade flow—especially when combined with Radix’s proven strengths in user experience, developer experience, and scalability.
Making Radix as Valuable as Possible
Once the explanation of Flash Liquidity has been laid out in more depth, work will begin with the community, ecosystem dApps, and partners to determine how best to leverage this new tool to provide liquidity to the Radix platform. This is combined with the goal of giving users more interesting things to do in the Radix ecosystem, which in turn makes the Radix Network more valuable.
The work being done has the opportunity to be extremely impactful for both the ecosystem and the platform. Combined with working with the Radix community to rebuild trust and adjust ways of working, it is exciting to envision what this can mean for the future of DeFi on Radix.
More work needs to be done beyond just product delivery. However, the opportunity to work on something that can so directly benefit the ‘things that matter’ for Radix, as well as engaging with institutional liquidity partners, is the first step.
There is at least one more system to discuss with the community where work is happening in parallel, building on what will be made possible with Flash Liquidity. This will be laid out by October.
Consideration of these parallel strategies started nearly a year ago, and they have been viewed as critical-path since early 2024. This post signals a change in focus, not a rushed pivot.
If RadQuest had been a breakthrough moment for the Radix Ecosystem, an institutional strategy would have still been necessary. As a breakthrough has yet to happen, the primary focus must change without abandoning the great things here already.
Crypto is no longer a retail only market. Delivery to date on Radix has been focused on retail user and developer experience. Given the shift and needs of the market, that clearly cannot succeed without something more.
The next major game to win in DeFi is institutional capital enabling the retail markets, and then on institutional capital using DeFi for their own purposes.
Together, let’s make sure the Radix ecosystem is a core part of that shift as it happens.
