Part 1: The Cashflow Obligation
Each Royalty Token = claim on cashflow from digital shops.
Shops sell on Amazon → 10% of revenue captured → settled weekly → streamed to token holders daily in USDe.
Every royalty Token Generation Event (rTGE) is priced at 10 PE valuation:
- Merchant generates $6M annual revenue
- We capture 10% = $600K/year
- Token priced at $6M market cap (10x annual capture)
- $600K ÷ $6M = 10% base APY
At issuance, that example implies a modeled 10% base yield. The live annualized rate varies with captured sales, token supply, and market price.
Part 2: Token Price Uplift
Two drivers push token price higher:
1. Performance-Locked Merchant Growth
Merchants can't unlock their tokens unless they hit aggressive performance targets.
Initial liquidity is seeded by the merchant at the same pricing as the primary market. But those tokens are performance-locked.
The unlock criteria: 100% annual cashflow growth.
Merchants must double their revenue year-over-year for their tokens to unlock.
If the merchant doubles revenue, the cashflow backing your token doubles. A token backed by $600K in annual cashflow becomes a token backed by $1.2M in cashflow.
At a constant 10 PE valuation, that token just went from $6M market cap to $12M. Your token doubled.
The merchant has skin in the game—their unlock depends on hitting these targets.
2. Deepened Liquidity via Berachain PoL
Berachain's Proof of Liquidity (PoL) creates deep liquidity from day 1:
- Real-world cashflow backing (not inflationary tokens)
- USDe yield rebates as LP incentives
- BGT rewards for liquidity providers
Why does liquidity matter for price?
Liquid assets trade at higher valuations. Look at US vs. Hong Kong:
| Exchange | Turnover Velocity | Average PE Ratio |
|---|---|---|
| US (NYSE/NASDAQ) | 150% (1.5x market cap/year) | 25-30x |
| Hong Kong (HKEx) | 60% (0.6x market cap/year) | 8-12x |
US stocks have 2.5x higher turnover velocity, and they trade at 2-3x higher PE multiples. Investors pay a premium for the ability to enter and exit positions easily.
This is what we aim to replicate using Berachain Proof of Liquidity (PoL)
In our first token, if we demonstrate deepened liquidity creating price premium, the Berachain PoL model is already performing better than many of the world's most robust traditional exchanges—without the entry barriers.
No IPO costs. No listing requirements. No lock-up periods. Just protocol-native liquidity meeting real-world cashflows.
What does this mean?
For Berachain: PoL becomes the proven liquidity infrastructure that outperforms traditional exchanges.
For us: This is the first step to show how Internet Capital Markets can replace Traditional Capital Markets. Lower barriers, composability, deeper liquidity—if we create better price premiums than Hong Kong Stock Exchange, we prove the future of capital formation is on-chain.
Ready to earn? Explore available Royalty Tokens.