Some additional color on the initial post in response to @mrq02 request form discord…
The core technology of the RLY Network is a set of functionality intended to make it easier to create tokenized economies. The first instantiation of this functionality was deployed to a private side chain developed by Forte and the first instance of a developer building on top of this is Rally.io. We have been looking into what it would be like to have this functionality exist across multiple blockchains; and in particular looking at Ethereum L2s and Solana as our initial target blockchains. We’re getting close to the point where we can deploy some of this functionality to Solana.
One of the primary ways in which the RLY Network supports new tokenized economies is primitives that allow developers to build tokens bonded to the $RLY token. $RLY exists as an ERC20 token on Ethereum mainnet; so when applications are built on top of the RLY Network where functionality exists on other chains, a key aspect is ensuring that the $RLY token can flow freely between chains. On Rally.io (and the underlying Forte chain) this is done via the trusted bridge setup to allow users to move RLY back and forth from Ethereum to Forte (“bridge in/out” as presented on rally.io). We can do the same on Solana via existing trust minimized bridges such as Wormhole and you can see some examples of our developers experimenting with these bridges on Solana block explorers
While that public bridge functionality technically gives us everything we’d need to allow developers to start building on top of the $RLY token on Solana, it doesn’t necessarily enable a great user experience. A Solana user looking to interact with an application that uses RLY on Solana would need to switch over to Ethereum, acquire $RLY, and bridge it to Solana. While this works, we could create a better user experience if it were possible to acquire $RLY directly on Solana. To do this, we would want to build Solana native liquidity for the $RLY token.
The familiar corollary would be fiat based transactions on Rally.io vs. acquiring ERC-20 $RLY and bridging in. While the latter works, the former is often a better user experience. And we can enable a similarly high quality user experience native to Solana where the complexity of other chains and bridging is removed if there is enough liquidity backing the $RLY token native to the Solana experience. This proposal would seek to incentivize that native Solana liquidity for the $RLY token in order to support this improved user experience.
A summary of pros and cons as I see them:
- easier for Solana users and developers to use/build the RLY token without interacting with Ethereum bridges
- introduction of the RLY token to the broader Solana ecosystem via its most used DEXes
- additional opportunity to distribute RLY via incentives for positive contributions
- opportunity to add substantial depth to RLY liquidity by expanding to new markets
- further fragmentation of liquidity; RLY is tradable on dozens of markets currently, each additional market creates more fragmentation and arbitrage possibilities
- potentially “cannibalizes” existing liquidity providers (moves liquidity providers from Uniswap to Raydium vs. finding new liquidity providers)
- opportunity cost of RLY Network Association directing budget towards liquidity incentives vs. other uses
On the whole, I believe the pros far outweigh the cons and $RLY liquidity native to new chains where we bring RLY Network functionality makes application development easier, provides a more sensible/contained user experience, and introduces new users to the RLY Network ecosystem.