What is Rari Governance Token (RGT)?

Quick Facts

• Blockchain: Ethereum (ERC-20)
• Launched: July 2020
• Protocol: Rari Capital — a non-custodial DeFi yield aggregator
• Primary use: On-chain governance voting and fee discounts
• Treasury: Funded by 25% of all protocol fees
• Key event: Merged into Tribe DAO (TRIBE) in early 2022
• Conversion rate: 1 RGT = 26.705673430 TRIBE

Introduction

The Rari Governance Token (RGT) is the native governance token of Rari Capital, a decentralized finance protocol built on Ethereum. Rari Capital was designed as a non-custodial robo-advisor that autonomously allocated user funds to achieve the highest possible yield across DeFi protocols.

RGT gave its holders direct control over the protocol, enabling community-driven management of a growing suite of DeFi products.

History & Background

Rari Capital launched in 2020 with a mission to bridge the gap between technical and non-technical DeFi users. It started with yield-optimized lending pools, later expanding into automated rebalancing between stablecoins and multiple protocols.

In May 2021, Rari Capital suffered a significant exploit resulting in approximately $10 million in losses. Despite this setback, the community continued developing the protocol. By December 2021, both the Rari and Fei Protocol DAOs voted overwhelmingly to merge, with 93% of RGT holders approving. The merger was completed in early 2022, with RGT converted into TRIBE — the governance token of the unified Tribe DAO.

How Rari Governance Token Works

RGT functioned as a standard ERC-20 governance token, enabling on-chain voting on proposals that shaped the Rari protocol. Holders could vote on decisions such as integrating new protocols, editing pool parameters, and managing risk settings.

RGT also served a pass-through governance role: when Rari pools accumulated other governance tokens like COMP or BAL, RGT holders could direct how those votes were cast. Additionally, holding RGT entitled users to fee discounts on the Rari platform, and a portion of RGT was burned on every protocol transaction, creating deflationary pressure.

Tokenomics

RGT was distributed to users through liquidity mining, rewarding those who contributed assets to Rari's yield pools. This incentivized early participation and decentralized ownership across a broad community.

The protocol allocated 25% of all fees generated to the Rari DAO treasury, controlled exclusively by RGT holders through governance proposals. A further 2.5% of fees went to a dedicated security audit pool, overseen initially by the core team with plans to transition to the DAO.

Ecosystem & Use Cases

RGT's primary ecosystem was Rari Capital's suite of DeFi products — yield pools, lending markets, and automated rebalancing strategies. Users deposited crypto assets, which the protocol deployed across various DeFi lending platforms to maximize returns.

RGT holders governed all aspects of the protocol, from product expansion to contributor compensation, audits, and partnerships. Liquidity mining further integrated RGT into the broader DeFi ecosystem via decentralized exchanges.

Team, Governance & Community

Rari Capital was founded and initially built by a small core team committed to fair token distribution and community-led governance. The Rari Capital Governance Forum launched in November 2020, opening protocol decisions to any participant.

All major decisions — including the landmark merger with Fei Protocol — were put to an on-chain vote. The merger itself represented one of the largest DAO-to-DAO governance events in DeFi history at the time.

Advantages

• Community ownership: Protocol governance was fully in the hands of RGT holders from an early stage.
• Multiple utilities: RGT combined voting rights, liquidity mining rewards, fee discounts, and deflationary burn mechanics.
• Transparent treasury: 25% of all protocol revenue flowed to a community-governed DAO treasury.
• Security focus: A dedicated audit fund was built into the fee structure to support ecosystem safety.

Risks & Challenges

• Security exploit: The May 2021 hack exposed protocol vulnerabilities and resulted in significant user losses.
• Token deprecation: RGT was converted into TRIBE as part of the 2022 merger, effectively ending its independent lifecycle.
• Concentrated governance participation: On-chain votes involved a relatively small number of wallet addresses, raising questions about participation breadth.
• DeFi market risks: Yield aggregation strategies inherently carry smart contract and liquidity risks.

Long-Term Vision

Rari Capital's original vision was to make sophisticated DeFi yield strategies accessible to all types of users, regardless of technical skill or risk tolerance. While RGT as a standalone token was absorbed into the Tribe DAO ecosystem in 2022, the underlying protocol's ethos — community-driven, non-custodial, and yield-optimized DeFi — continues to reflect the broader direction of decentralized finance. RGT's history stands as an important chapter in the evolution of on-chain governance and DAO-to-DAO collaboration.