Reya Network is a modular Layer 2 solution designed for transaction optimization. Its goal is to provide DeFi traders and liquidity providers with the deepest liquidity, best capital efficiency, and highest performance. Reya Network tackles real issues in DeFi scaling that general Layer 2 solutions can’t solve.

What problems has DeFi encountered?

DeFi faces significant challenges with liquidity fragmentation, where each new exchange on a general Rollup competes for limited liquidity. This scarcity affects market liquidity across all exchanges, hurting traders and market participants. General L2 solutions also suffer from issues like front-running and harmful MEV, along with performance bottlenecks due to the inability to execute transactions in parallel.

Liquidity is essential for trading protocols, but the competition for liquidity often leads to unsustainable incentives, limited interoperability, and dispersed liquidity.

Is there a solution?

Yes, Reya Network offers a new approach to scaling, focusing on DeFi trading and optimizing three key areas: liquidity, capital efficiency, and performance.

Pillar 1: Liquidity

Reya Network’s innovative passive liquidity pool mechanism allows funds to effectively support trading. This design creates shared liquidity for all exchanges within the Reya ecosystem, enhancing market depth, lowering entry barriers, and improving the trading experience.

Reya Network also integrates financial logic into its design, acting as a deep liquidity network that eliminates competition between exchanges. This removes liquidity fragmentation and allows liquidity to be pooled across exchanges.

Market makers can share liquidity freely between exchanges, improving trading conditions for the entire ecosystem. This creates a flywheel effect of “interoperable liquidity” in DeFi.

Pillar 2: Capital Efficiency

Reya Network’s embedded margin engine allows users to have a margin account usable across multiple exchanges, effectively creating the first decentralized clearinghouse.

This margin engine can improve capital efficiency by up to 3.5 times for traders and up to 6 times for liquidity providers. Any exchange operating on the Reya Network inherits this logic automatically.

Pillar 3: Performance

Reya Network’s transaction speed is impressive, with a block time of 100 milliseconds and throughput of up to 30,000 transactions per second, making it one of the fastest EVM Rollups.

Transactions are executed on a “first-in, first-out” (FIFO) basis without gas fees, eliminating front-running and harmful MEV. This feature uses the Arbitrum Orbit technology stack.

Performance is crucial. Currently, DeFi accounts for less than 5% of all cryptocurrency trading volume, partly because it can’t match the high performance and user experience of CeFi platforms.

However, by combining performance improvements with modularity and financial logic, Reya Network aims to capture CeFi trading volume. This would bring substantial trading volume to DeFi and greatly enhance transparency, robustness, and composability for all traders in the DeFi ecosystem.

Okay, that’s all great, but who is behind Reya Network? What is their development roadmap?

Reya Network Team and Supporters

Reya Labs, the creator of Reya Network, is run by a team of experienced DeFi veterans who have previously launched several successful startups, including Voltz Protocol, which reached over $30 billion in trading volume within 12 months.

They are supported by some of the most prominent companies in the industry and have raised $10 million from venture capital firms such as Framework, Coinbase, and Wintermute.

Roadmap

Reya Network is being developed in phases.

The first step is to kickstart the network by introducing liquidity, which is why they held a liquidity generation event (LGE) in April. For more details about the LGE, visit here https://x.com/reya_xyz/status/1780551785729454486.

After the LGE, they will validate Reya Network’s concept by launching a fully functional perpetual DEX called Reya Exchange. Reya Exchange will be the first exchange on this network and will serve as a tool to attract more liquidity and traders, creating strong network effects for future exchanges.

Following this, Reya Network will open up to other exchanges, ultimately becoming the foundation of the next generation of DeFi.

Now, let’s take a closer look at how the various layers of the Reya Network are connected.

Reya Network Architecture

Reya Network consists of two main layers: the chain layer and the protocol layer. Additionally, there is an off-chain exchange layer, as illustrated in the diagram below.

Reya modular components can be divided into two layers:

• Chain Layer: Provides tools to address common issues in trading on general chains while ensuring security, better user experience, lower development barriers for new teams, and a path to full decentralization.
• Protocol Layer: Directly addresses the vertical integration issues of DeFi applications by offering a new modular approach to financial logic. It supports trading by deploying modular components such as PnL settlement, margin requirements, and liquidation, allowing applications to build on top of the network.

Reya Network integrates these two layers into a unified system, combining technology and financial logic to create new synergies.

Chain Layer

The chain layer optimizes the network’s speed and throughput while addressing significant issues on general chains, such as front-running and harmful MEV. Powered by Arbitrum Orbit, this layer achieves 100ms block times and 30,000 TPS, making it one of the fastest EVM Rollups.

On-chain transactions are completely gas-free, and transactions are sorted by FIFO (first-in, first-out). This significantly improves the user experience for a network optimized for trading and eliminates front-running and harmful MEV. Over time, more trading-specific logic will be added to the network, further enhancing its capabilities.

Protocol Layer

The protocol layer supports trading by breaking down the chain into modular components (such as PnL settlement, margin requirements, and liquidation), directly addressing the vertical integration issues of DeFi applications. It provides components that trading applications can deploy.

This layer consists of three parts: the financial layer, the liquidity layer, and the governance layer. Let’s explore each part:

Financial Layer

This is the foundation for value holding, payment settlement, and capital-efficient trading on Reya Network. The architecture is open, allowing other exchanges to integrate into the network.

Reya Network’s architecture includes two main modules:

• Derivative Clearing Protocol: A decentralized, non-custodial clearing protocol that provides financial logic for computing margin requirements, facilitating liquidation, and realizing PnL attribution. The margin system is advanced, enabling cross-margining with different tokens and full portfolio cross-margining. This means trading and providing liquidity are highly capital-efficient. For example, ETH-BTC perpetual trading is over 350% more capital efficient than on other networks.
• Stablecoin Protocol: Transactions on the Reya Network can be settled with any asset approved through governance. However, most markets will settle in rUSD, Reya Network’s native stablecoin. It allows neutral settlement between users from different chains. It will also implement a payment settlement protocol to facilitate settlement and a savings protocol, making rUSD attractive for both transactions and holding, ensuring it transitions from a payment settlement to a long-term value store.

Liquidity Layer

Reya Network embeds a passive LP pool, leveraging its ability to generate price indices to create index contracts. External indices will be used initially, allowing traders to gain well-defined index exposure with lower execution risk. This mechanism, built on the derivative clearing logic, is highly capital-efficient for passive LPs. It also acts as the system’s ultimate liquidity backstop and enhances the liquidity of any exchange operating on Reya Network.

Governance

Reya Network aims to achieve decentralization, ensuring the network is not controlled by any single entity and providing transparency and trust for the system’s end users. Trust and transparency enhance the network’s composability, giving other exchanges confidence to operate on the network. This will accelerate the adoption of the Reya Network and deepen liquidity for end users.

Key Infrastructure Partners

The chain layer makes Reya Network more than just a technical tool. When discussing the chain layer, we must mention its main partners, Arbitrum and Gelato.

Reya’s chain layer optimizes the network’s speed and throughput while addressing common flaws in general chains applied to trading. Over time, more application-specific logic will be integrated into the block-building process itself, further improving the network.

As mentioned earlier, this layer is supported by a custom implementation of Arbitrum Orbit, achieving up to 100ms block times and 30,000 transactions per second, making it one of the fastest EVM Rollups. It operates as a gas-free network, initially with a set of relayers, but eventually, these relayers will be removed, meaning transactions will be ordered FIFO. This helps eliminate front-running and harmful MEV. It is also deployed and maintained in collaboration with Gelato, enriching the chain layer further.

Let’s dive into what these partners bring to Reya Network.

Arbitrum

Reya Network is an L2 Rollup utilizing a customized version of the Arbitrum technology stack. Arbitrum Orbit allows the launching of customizable, dedicated chains in a permissionless manner using Arbitrum technology. Essentially, Orbit chains are deployable, configurable instances of the Arbitrum Nitro technology stack. They allow precise customization for Reya’s use case: financial transactions.

As a version of the Arbitrum Nitro technology stack, it inherits all the attributes and security assumptions of the Ethereum base layer and has access to all upgrades, feature additions, and improvements to Nitro.

Reya Network leverages key features of Arbitrum One:

• Full EVM+ Compatibility: All Orbit chains enjoy EVM+ compatibility introduced by Stylus, minimizing the conversion costs of entering the network. Specifically, applications can deploy on the network with smart contracts written in Solidity, C, C++, and Rust.
• Customizable Protocol Logic: Orbit’s stack allows the network to customize its settlement, execution, or governance protocols to meet specific requirements. For example, transactions are executed on a FIFO basis, eliminating front-running and harmful MEV.
• Dedicated Throughput: Reya Network focuses on a specific use case—trading, ensuring high performance and consistent resource availability.
• Gas-Free Transactions: With dedicated throughput, gas costs are more predictable and directly borne by applications in the ecosystem. This allows for gas fee subsidies, enabling gas-free transactions where these costs are covered by fees collected from trading volume. From the user’s perspective, costs become fully predictable, akin to trading on any centralized venue.
• Improved User Experience: Dedicated throughput and gas fee subsidies abstract technical complexity away from end-users. For example, users can deposit and withdraw directly within the clearing mechanism without wallet intermediaries, minimizing steps and approval operations. More broadly, Reya Network applications will be more accessible to non-technical audiences.
• Ethereum Security: Reya Network operates as an L2 rather than an L3, inheriting security directly from Ethereum rather than using Arbitrum One as an intermediary. Reya Network will also have a DA solution to be announced.

Gelato

Reya Network is not a “bare” Rollup but is deployed in collaboration with Gelato. Gelato is a Rollup-as-a-Service, bringing additional assurances, performance improvements, and scalability to the network.

Advantages of partnering with Gelato:

• Professional Deployment: Reya Network benefits from Gelato’s expertise, ensuring high-standard deployment.
• Guaranteed Uptime and 24/7 Monitoring: The Gelato team provides around-the-clock monitoring, ensuring high availability and expert support for any issues.
• Native Integration with Key Services: Gelato’s deployment includes native integration with third-party tools like oracles, bridges, data indexers, and account abstraction.
• Gelato’s web3 Service Integration: Native integration of Gelato’s full suite of web3 services, including Gelato Relayers and Functions, enables a fully automated, gas-free environment.

Arbitrum and Gelato are just the first two key partners enabling Reya Network.

Now let’s discuss a topic I enjoy: the stablecoin, rUSD.

What is rUSD?

Reya Network will deploy its stablecoin, rUSD, as the native tool for settlement payments within the system. Reya’s cross-collateralization feature will allow various tokens from other networks to be used as collateral. By using its stablecoin, Reya Network ensures PnL exchanges between parties are conducted in a neutral native token.

Advantages of rUSD:

• Native Yield: Designed with integrated mechanisms within the Reya Network, rUSD offers native yield, making it not only a neutral settlement means for derivatives but also a viable store of value within the system.
• Synergy with the Protocol Layer: Reya Network’s unique development approach integrates all protocol layer components to support each other. Eventually, rUSD will become the first stablecoin deeply embedded in a trading system.
• Universal Currency Mode: Once complete, rUSD will be the universal currency within Reya Network. All fees within Reya will be charged in rUSD. Additionally, insurance funds and any underwriting and staking vaults will be denominated in rUSD.

While Reya Network welcomes new stablecoins in its ecosystem, rUSD will play a crucial role. Specifically, the governance layer will use rUSD to support the system.

Conclusion

Reya Network is the world’s first Layer 2 optimized for trading, featuring:

• Performance: With 100ms block times and over 30,000 TPS, Reya Network is one of the fastest networks.
• Liquidity: Users can stake funds into the network, converting them into liquidity. All DEXs on the Reya Network can utilize this liquidity.

In summary, through the modular architecture of the chain and protocol layers, Reya Network enhances liquidity, capital efficiency, and performance in DeFi.

Finally, let’s list some bullish reasons for Reya Network:

• The first Layer 2 is optimized for trading.
• 3.5x improvement in capital efficiency.
• Unlocks performance similar to CEX.
• Built on Gelato Network RAAS (gas-free experience).
• 100ms block times with throughput up to 30,000 TPS for near-instant settlement.

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