Introducing Racks

DeFi faces a new beginning in the wake of the entire industry going up in flames. Over 70 BILLION dollars completely lost, millions of retail participants devastated, massive contagion that still ripples through the space today. Yet, there is much to look forward to. Never before have we had such concrete evidence of DeFi’s importance — for providing equal access to yields that outpace inflation and outperform the Fed, borrowing opportunities without compromising privacy, trading and market-making while staying true to the principles of self-sovereignty. That’s why we’re so excited to introduce Racks — the next step in on-chain asset management, decentralized money, and capital mobility.

TLDR: Racks is an omnichain issuer of decentralized stablecoins/liquid staked derivatives, backed by yield aggregation across 13+ blockchains (with more to follow!) and custom structured products. Racks aims to present its users with as many vaults for as many assets as possible as the protocol grows, with each of them having built-in potential to become a liquid staked derivative at any time.

Introducing Racks

The Racks Protocol is a DeFi savings account powered by the first universal interface for cross-chain yield aggregation. It takes the time and effort out of finding the best yields, by rotating capital automatically and trustlessly between smart contracts. It also provides access to complex, on-chain structured products, arbitrage strategies, and an internal lending market within the vaults, which increase yield when the market faces downturns and third-party yield venues are less profitable. Racks is intended to act as a baseplate upon which to rebuild decentralized finance; with instant cross-chain mobility, best-in-class yields (from 13+ chains initially, soon to scale), and liquid units of account that are designed for optimal use across decentralized finance on any chain, and easy to off-ramp into fiat as well.

For decentralized finance to eat traditional finance, it’s integral that it provides products that outperform centralized competitors, without compromising on user experience. Racks was built to fulfill that goal without compromising on defi’s core ethos: remaining on-chain, trustless, and permissionless wherever possible doesn’t mean sacrificing any convenience or utility.

Ether and Dollars

Defi runs on Ether (ETH) and Dollars (USD) . As an industry and community, we have considered the former to be ultrasound money; fuel for the EVM, a critical component of the transactions many of us make every single day, and deflationary as a result. The latter is the highest volume asset across payment processors, cryptocurrency exchanges, and lending markets. With an ETH or a USD-denominated stablecoin, opportunities across defi are countless; between providing liquidity on a DEX, to lending out your assets, to using them as collateral, there’s a high opportunity cost associated with depositing your ether or dollars anywhere. Racks fixes this. With our Ether and Dollar Vaults, we issue a special type of LSD — no, not that kind. Racks issues two different Liquid Staked Derivatives (LSDs) — Racks Dollars (RXD) and Racks Ethereum (rxETH), both of which are fully collateralized by the underlying vault. Yield is shared on a constant basis with the user through the automated minting and transferring of tokens to user wallets. Our goal is to make RXD and rxETH the best ERC20 representatives of their underlying assets available in the market, not only from a yield standpoint but also from a utility point of view; building out incentivized liquidity on exchanges, becoming useful collateral, and unique features like flash-minting are all designed to make Racks-issued LSDs the most useful assets in defi.

Alternative Asset Vaults

In addition to LSD-issuing vaults such as those for Ether and Dollars, Racks also features several alternative asset vaults for many of DeFi’s most useful assets. We’re always looking to expand our offerings for savings products, as our overarching goal is to keep cryptocurrency on-chain. Any savings products we can create to rival centralized competitors, we will. In addition to seeking out the best yields across every chain automatically and comparing them with internally designed strategies, Racks vaults have the potential to upgrade into LSD-issuing vaults at any time — just like how the Ether and Dollar vaults produce a liquid rxETH and RXD respectively.

Cross-chain Mobility

Bridge hack after bridge hack after bridge hack — don’t we all get tired of hearing the same news? Providing liquidity on bridges is inherently risky, no matter the rewards offered — yet regardless of these risks, multichain defi runs on bridges and faces an inherent risk vector as a result.

Racks fixes this. Through RXD and rxETH, Racks presents a new way to route capital through stables and ETH over to other chains; cross-chain minting. RXD, rxETH, and any new future strain of LSD released by Racks feature the ability to be minted directly from racks.com on any integrated chain, from any integrated chain. In addition, any holder of a Racks-issued LSD has the ability to burn their tokens in exchange for the same value on any other chain, without any delay whatsoever. Never before have instant stablecoin or ether transfers been so easy, nor has it been so easy to build “bridge liquidity” — with cross-chain transfers facilitated by minting and burning, cross-chain routing for lowest slippage will pick RXD or rxETH liquidity over traditional bridging liquidity any day. Racks relies on cross-chain messaging, leading us to implement multiple layers of redundancies: the protocol is designed to be modular and upgradeable, allowing us to integrate new messaging solutions in the future. We do not expect all current messaging protocols to continue to grow in the same direction: some will feature chain compatibility others do not. With multiple implemented protocols and the upgradeability to implement new ones, Racks will be the most composable omnichain solution with the widest variety of chains integrated.

Conclusion

Racks is a DeFi savings account and the master key to omnichain yield. With a single button deposit, users automatically aggregate yield across over 13 different blockchains as well as multiple internal yield products. Our liquid staked derivatives enable the fastest and most capital efficient transfers across different chains, all while passively paying out best-in-class yield. Everything in this article was meant to be an introduction — we’ll be expanding on all these details in future posts. For now, come join us on Twitter and Discord to stay up to date on everything to do with Racks.

https://discord.gg/racks-com
twitter.com/RacksResearch
racks.com