Participants & Roles

Liquid Royalty Protocol Ecosystem: Aligning Stakeholders for Transparent, Efficient, and Liquid E-Commerce Financing

1. Overview of Key Participants

The Liquid Royalty protocol is built on a multi-layered structure designed to align the interests of all stakeholders while ensuring regulatory compliance and long-term stability. The core participants include:

• Merchants: Each Royalty Token represents a portfolio of e‑shops. Merchants remain in control of their day‑to‑day operations and generate revenue; however, they must commit to a Performance-Linked Stake (locking 15% of their market cap) as collateral. This stake is gradually unlocked as revenue performance targets are met, ensuring that merchants remain aligned with investor interests.

• Stakers: Investors who acquire Royalty Token gain direct exposure to the underlying e‑shops' cashflow growth. Additionally, stakers can opt into the platform's staking product—a mechanism that holds up to 50% Royalty Token on its balance sheet. Unlike direct royalty-sharing, this staking product is structured as a utility tool (and is not classified as a financial security) while delivering higher, more stable yields, and offering liquidity via decentralized exchanges.

• Liquidity Providers & Market Makers: These participants supply the necessary liquidity to the Automated Market Maker (AMM) pool and ensure smooth, continuous trading of Royalty Token. Their activity keeps spreads tight and the market efficient.

• Credit Assessor: Currently partnering with Qupital , our primary independent credit assessor. Credit Assessor monitors merchant performance by verifying on‑chain revenue data. It provides due diligence without ever managing investor funds, thereby reinforcing the trustless nature of the platform.

• DAO Governance Participants: Royalty Token holders engage in decentralized governance via a DAO. They propose and vote on key decisions—ranging from protocol upgrades and treasury allocations to merchant onboarding or delistings—ensuring that the platform evolves in a way that protects investor interests.

2. The Business Hook

By combining direct exposure to e‑shop cashflow with a novel staking product that channels excess yield through our Automated Liquidity Assurance Reserve (ALAR), Royalty Token transforms traditional private credit models. Investors enjoy the benefits of automated enforcement, transparency, and liquid market access—offering a more efficient, risk‑adjusted alternative to conventional financial intermediaries.