TL;DR
- With the orderbook launch approaching, this proposal formalises the Reya Liquidity Pool (RLP) announced in RNIP 5.
- RLP earns yield from two places: a share of Reya’s trading fees (after maker / taker / affiliate rebates), and the boosted yield from holding Ethena’s USDe. A portion stays in USDC so redemptions are always smooth.
- In return, the pool’s capital is delegated to Dedicated Market Makers (DMMs) - starting with Selini, Keyrock and Flow Traders - who use it to provide liquidity on the orderbook.
- Importantly, the DMMs can never withdraw the assets from Reya, and the pool doesn’t take on their trading P&L. If capital is recalled, the market makers must return the same amount of USDe to the pool (meaning, if any losses are incurred, they top up the USDe balance). That materially improves the risk-reward profile of RLP.
- This replaces the old Liquidity Manager structure (RNIP 2 - 4), where capital had to leave the exchange to earn yield. Under this proposed design, assets always stay on Reya.
- Day-to-day delegation is managed by Ares, a Reya Foundation entity, which will publish regular attestations (at most monthly) showing exactly which DMMs hold what - the same model Ethena uses for its custodian attestations.
- Voting works exactly as in RNIP 5: based on RCP allocations, with quorum at 4%.
Context
In RNIP 5 we said that part of the liquidity on the orderbook would come through a “Reya Liquidity Pool”, with assets delegated to selected market makers. This proposal sets out how that actually works.
It’s also the natural next step from the Liquidity Manager programme (RNIP 2 - 4). That structure delivered strong returns for LPs, but it had one drawback: the yield came from off-exchange flow, so capital had to leave Reya to earn. With the orderbook, the yield can come from on-exchange flow, avoiding the previous trade-off.
How the RLP works
Where the yield comes from. The pool holds a target allocation of USDe (with the rest in USDC as a redemption buffer), so it earns Ethena’s boosted base yield on top of a governance-set share of net trading fees. The pool’s value updates continuously as fees and yield come in.
What the pool does in return. The pool’s capital is delegated to DMMs, who use it to quote markets on the orderbook. Two things make this delegation safe by design:
- DMMs can use the capital on Reya, but they can never withdraw it from the network.
- The pool doesn’t share in DMM trading gains or losses - it’s capital-only. When a delegation is recalled, the capital simply returns to the pool. For completeness, should a DMM generate losses through their strategy they are required to top up the USDe balance ahead of returning the funds to the pool.
There’s still some counterparty risk, but it’s materially reduced compared to structures where assets sit off-exchange - and it means the pool’s return profile is more favourably skewed.
Who the DMMs are. Governance approves the framework and the standards a DMM must meet - an institutional market-making track record, proper risk controls, and acceptance of the delegation and recall terms. The launch cohort is Selini, Keyrock and Flow Traders. Ares can add or rotate DMMs within these standards, with every change visible through the attestations below.
Guardrails. No single DMM can hold more than 50% of the pool, a minimum USDC buffer always stays in the pool for redemptions, and capital can only ever be delegated to approved DMMs.
Ares & attestations
Running every delegation decision through a governance vote would be far too slow for live orderbook liquidity. Instead, Ares - a Reya Foundation entity - manages delegations within the limits above, and publishes attestations showing each DMM’s delegated balance, at most monthly.
This is the same approach Ethena uses: their backing assets sit with custodians and are delegated to exchanges without ever leaving custody, with monthly attestations proving where everything is. The RLP works the same way - capital never leaves Reya, and the attestations show exactly where it sits.
Risks
As we noted in RNIP 5, USDe has a different risk profile to USDC - which is why the pool keeps a USDC buffer, and why we take comfort from Ethena’s published Proof of Reserves and custodian attestations. On the DMM side, counterparty risk is reduced but not zero; the concentration caps and recall rights exist to keep it bounded.
Voting
This proposal ratifies the RLP structure, the DMM framework and launch cohort, the guardrails, Ares’ delegation and attestation mandate, and the wind-down of the old LM structure. As with RNIP 5, voting is based on RCP allocations with quorum set at 4%.