ROOK and xROOK
The Rook Protocol runs on ROOK, an ERC-20 governance and utility token used to discover the value of MEV in a transaction as it is processed.
Everyone using the Rook Protocol — users, smart contracts, market makers, searchers — are connected through the ROOK token on a series of payment channels.
ROOK holders determine the direction of the DAO and its activities, through Rook DAO governance.
Governance oversees and determines many factors such as whether to certify a Keeper to utilize the protocol, how to invest the Rook DAO Treasury, how to empower and incentivize the Rook Labs team to continue production of technology beneficial to the Rook DAO, and many other things.
Rook DAO Governance is unique in that it emphasizes consensus, rather than majority voting. It does not implement standard token-weighted voting, giving smaller holders a true voice and lessening the potential for a dominant voting block to drive a governance agenda.
Keepers bid using ROOK for the exclusive right to settle incoming transactions as part of a bundle. The amount of ROOK bid is relative to the amount of profit the Keeper was able to find in the transaction.
Once a transaction has been executed, the ROOK bid by the winning Keeper is distributed according to the protocol, with the majority sent to the user who originated the transaction. This serves as a form of rebate and ensures that value or profit being created through transaction flow, is going back to the people who create it.
To bid in an auction, Keepers must purchase ROOK on the open market and stake it in a smart contract connected to the Protocol auction controller via a payment channel, then bid over a secure API.
Users can stake ROOK to receive an equivalent amount of xROOK.
xROOK lets you share in the protocol’s success by receiving a portion of the winning ROOK bid for each transaction executed through the Rook Protocol. This portion of each bid is distributed pro rata among holders of xROOK.
- The exact distribution weights for the winning bid are able to be tuned by Rook DAO Governance.
- There is currently no timelock for staking, but that may change in the future.
- The staking APY will grow as more volume of ROOK is bid through the Rook Protocol.
In terms of the flow of ROOK in the protocol, it looks like this:
Keepers must continually buy & stake ROOK from the current circulating supply to utilize the Rook Protocol.
- 1.Keepers pay out their staked ROOK to bid on orders in the auction.
- 2.When the auctioned transaction has been settled to the blockchain, the winning bid from the auction gets distributed in ROOK to four entities, according to predetermined percentages set by the protocol:
- 80% to the transaction originator (the user or protocol that placed the transaction)
- 10% to xROOK stakers who were staked at the time the auction completed
- 6% to the Rook DAO Treasury
- 4% burned
The more volume that flows through the Rook Protocol, the greater the positive effect of the flywheel.
The current total supply is 1,268,107 ROOK, and every time a transaction is processed through the Rook Protocol, that number goes down, as a little bit of ROOK gets burned.
There are no longer emissions of ROOK — meaning no new ROOK tokens are being created. ROOK is now a deflationary asset.