Redacted Cartel is a liquidity management protocol that focuses on acquiring governance tokens (and voting power) across many DeFi protocols. It derives value from its ability to provide meta-governance services to other projects.
Redacted launched with the goal of being a liquidity aggregator built on top of the Curve and Convex ecosystems. This was accomplished by leveraging Olympus' bonding mechanism to bootstrap its treasury with relevant governance tokens. The "rebase" tokenomics allowed users of the protocol to bond desired assets (i.e. CRV and CVX) to the treasury in exchange for discounted BTRFLY tokens, which were then staked to receive rebase rewards. Since then, Redacted expanded its reach to the Frax, Balancer and Tokemak ecosystems, among others, as well as acquired the Votemak bribe marketplace. However, concerns about the impact of dilution on token holders ultimately led Redacted to shift to a new, revenue-sharing model. In the V2 tokenomics, the protocol eliminated the bonding model and introduced revenue-locked BTRFLY (rlBTRFLY) which locks BTRFLY for periods of 16 weeks at a time to receive revenue earned from Redacted's treasury and products.
Redacted currently generates revenue from its two main products: Hidden Hand and Pirex. Hidden Hand is a marketplace for governance incentives, or "bribes". Protocols looking to influence pool reward emissions will leverage the Hidden Hand marketplace to bribe users holding the relevant governance tokens to vote in their favor. Hidden Hand takes a 4% fee on all incoming bribes with 35% distributed to the Redacted treasury and 15% to the DAO reserve. The second income stream, Pirex, is a liquid wrapper created by Redacted that allows for auto-compounding and tokenization of future yield events. The first Pirex product, pxCVX, is a liquid wrapped version of vlCVX (vote-locked CVX) with the goal of increasing liquidity, yield and utility for CVX holders. Each pxCVX is backed 1:1 with vlCVX. Pirex charges a number of fees on pxCVX including a bribe, pounder and unlock fees, with 42.5% distributed to the Redacted treasury and 15% to the DAO reserve.
Passive holders of certain governance tokens can earn additional yield on top of their holdings from the Hidden Hand bribes marketplace. Users wishing to earn a portion of protocol revenue can lock their BTRFLY token in exchange for rlBTRLY to earn 50% of Hidden Hand revenue and 42.5% of Pirex revenue. CVX holders can deposit into Pirex to earn Convex bribes while remaining liquid. Yield from the treasury is also distributed to rlBTRFLY holders, increasing from 15% to 42.5% as the treasury size increases.