12 Min

Scarlet Changes

Redlight Finance

Before the fun stuff…

The development train never stops here at Redlight Finance and a lot has been happening since our last Medium Article!

Here’s a quick recap for those playing at home:

  • Redlight Chain ($REDLC) officially launched! You can buy this at XT, Coinstore, Bitmart, Digifinex, or our own DEX, Dawnswap. If you are wanting to buy through our DEX, you will need to bridge USDT from Binance Smart Chain (BEP-20) — you can do so via our Bridge (and bridge back if you like!).
  • Scarlet Chains has been released!
  • We have launched our own Decentralised Casino of sorts, The Stardust Clubif you are unsure of this, head to the Startdust Club Help section on our Discord (who knows, you may even find a referral code in there).
  • The one and only Banana Man AKA Wilberto has been revealed as our Creative Producer.
  • Kyle has moved into being our Head of Business Development, aiming to tackle not only DeFi projects, but traditional businesses also.
  • Our discord admins have moved into more specialised roles. Texas, Dad and Bench filling Kyles big (but literally small) boots as Community Managers, Fancy Stephen taking care of the Customer Service side of things, and PacMan making sure our HR and Recruitment continues to run smoothly.
  • We have announced partnerships with Crowdbotics, Sphere Finance, and Truth Seekers.
  • We just came back from an expo in Silicon Valley (Tech Ex North America) Thanks to the success of this expo, we are hoping to announce more partnerships to you all as soon as we can (Along with some future Redlight developments such as Redlight Private Networks (Redlight Subnets), Redlight Cloud, and Alchemist Chains).

Before I go into more detail about what has been coined “Scarlet Chains V2”, I would like to reiterate some of the reasoning behind Scarlet Chains working the way it does.

Long before Redlight Chain, when the Redlight Finance team came together, we all had the same idea and vision:

How do you help someone learn how to be more in control of their own investment?

The answer is simple:

Make them think about it

Whether you are new here or have been a part of the ecosystem that is Redlight Finance for a while, by now you are surely familiar with Scarlet Chains. However, there’s a good chance that you don’t fully understand the in’s and out’s of the beast.

Yes, Scarlet Chains is not a simple set and forget protocol, and yes there are reasons behind this.


If Scarlet Chains was as simple as buying your NFTs (Chains), claiming your rewards when you want, and selling them as you go, this would only be as sustainable as the new money coming in would be.


To combat sustainability we need to direct responsibility to everyone that is utilising Scarlet Chains, not just the Developers. Without having everyone accountable for their Chains, Chains tend to crumble into darkness.


Without having attention on your investment, things can change in the blink of the eye. At Redlight, we have given you all of the tools needed to make the most of your investment. However, just like a sculpture, just because you have the same tools as your neighbour, it doesn’t mean you will create the same work of art.

The Tools

On Scarlet Chains, you will notice four different functions; Compound, Roll Over, Claim Rewards and Pay Upkeep.

Every single day, you can choose ONE of the four functions, so make your choice wisely.

Newtons Third Law states that for every action, there is an opposite and equal reaction. Scarlet Chains Law states that for every action you take, it will effect every other day you have left in your Chains Upkeep Cycle, so choose your actions wisely.

To help you make better use of your tools, I will break the functions down below:


Use this function to Compound your Chains, or in other words, rather than claim your rewards, use those rewards to create a new Chain and increase your passive income.

  • You can use your unclaimed rewards ($SCAR) to create chains without having to pay Claim Tax (15%) first.
  • You can compound to create more than 1 new Red Chain at once.
  • You can use rewards from any Chain (i.e Red, Platinum or Black) to create new Red Chains, but you CAN NOT merge compound (i.e combine Red and Platinum rewards together).
  • You can combine your unclaimed rewards with $SCAR you have in your wallet to compound and create new Chains.
  • If you Compound (or Roll Over) 1 or 2 times each cycle (7 days), you can lower your Darkness Upkeep.

Roll Over

Use this function to Roll Over your rewards. This will cost the equivalent of 5% of what the relevant Chain has unclaimed at that time. For example, if you have 5 Red Chains, and they all have 0.2 unclaimed rewards each, this equals to 1 unclaimed $SCAR in total. Therefore, if you use the rollover function, this will cost 0.05 $SCAR (5% of 1 $SCAR).

  • This is used to simulate the compound function in the sense that it counts towards your Darkness Upkeep actions that lower your Upkeep fee when you go to pay this.
  • You can only Roll Over all of an individual Chain type (i.e Red, Platinum or Black) at one time. (i.e If you want to Roll Over your Red Chains, you need to Roll Over all of them, not just one at a time).

Claim Rewards

Use this function to Claim your unclaimed rewards ($SCAR) from your Chains.

  • When V2 rolls out, you will only be able to Claim all of an individual Chain type (i.e Red, Platinum or Black) at one time. (i.e If you want to Claim your Red Chains, you need to Claim all of them, not just one at a time).

Pay Upkeep

Use this function to pay your Darkness Upkeep. If a Chain falls into Darkness (i.e you don’t pay Darkness Upkeep on time) the Chain no longer produces rewards. Once you pay your Darkness Upkeep the Chain will begin producing rewards again.

  • Darkness Upkeep can be paid at any time, however, if you pay your Darkness Upkeep early, it will be at a pro-rata.
  • Once you pay your Darkness Upkeep, the Upkeep timer resets.

To be clear, you can only do one function per 24 hours.

Scarlet Chains V2

Although the term V2 has been thrown around, I want you to think of this as more of an upgrade to the protocol in the name of sustainability. As we got closer to the release of Scarlet Chains, the architecture for V2 was designed by the almighty Leo (Indiana Gems), however, implementing these upgrades would have significantly delayed the launch of Scarlet Chains.

Before people thought of flying in the sky, they had to create the automobile first.

Here’s what’s coming in V2:

Upkeep Payments

Upkeep will now be paid in $USDT-R instead of $SCAR.

  • I.e if $SCAR is $20, and your upkeep is usually 1 $SCAR, this will now be $20 USDT-R. If $SCAR is $60, and your upkeep is usually 1 $SCAR, this will now be $60 USDT-R. And so on…

Upkeep will now NOT be counting as 1 action, or in other words, if you just claimed, you don’t need to wait 24 hours to pay your upkeep.

Rollover Payments

Rollover will now be paid in $USDT-R instead of $SCAR also.

Chain Creation Costs

Rather than REDLC, it will now cost USDT-R to create new chains. This will be $15 USDT-R for all chains except Witching Hour (More on Witching Hour below).

You will also need to pay a % of the ROI you have received from the Chains you are burning to upgrade (e.g Burning Red Chains to create a Platinum).

This goes as follows:

ROI less than 50% = 0% of ROI from that Chain

ROI 50% to 100% = 2% of ROI from that Chain

ROI 100% to 150% = 4% of ROI from that Chain

ROI 150% or more = 6% of ROI from that Chain

This will be paid in USDT-R.

Link Enhancers Tradeable

Link Enhancers will become tradeable on Midnight Trades.

This includes the following;

  • Redlight Link
  • Jade Link
  • Ruby Link
  • Diamond Link

This does NOT include:

  • Full Moon
  • Dawns Solace
  • Scarlet Nights

Action Timer Change

To make things easier, the action timer will be universally set to UTC 00:00

dApp Updates

There will be several dApp updates done, which you will see once we roll out V2.

Witching Hour

The Witching Hour is a brand new Chain which is a higher tier than Scarlet Chains Black.

The cost to create a Witching Hour is 2 Scarlet Chains Red, 2 Scarlet Chains Platinum and 2 Scarlet Chains Black (6 Chains in total).

In order for a Witching Hour to produce rewards, your wallet will need to hold a minimum of 30 Scarlet Chains Red, 10 Scarlet Chains Platinum and 5 Scarlet Chains Black. If you wallet falls below these requirements (due to upgrading Chains or going to ham in the Sacrificial Vaults), your Witching Hour will not produce rewards.

There is a max of 1 Witching Hour available per wallet, and only 25 are able to be active in total across the whole protocol. In other words, if the 25 Witching Hours are already active, you will need to wait until one becomes available…

You will need to reach Max Wallet before being able to purchase a Witching Hour.

Witching Hours produces 10 $SCAR and 5 $REDLC every 24 hours.

Witching Hours operate on a staggered upkeep cycle as follows:

  • After 7 days (1 Cycle after creation) — 2 Scarlet Chains Red are required to be sacrificed to the upkeep Gods.
  • After 14 days (2 Cycles after creation) — 1 Scarlet Chains Platinum is required to be sacrificed to the upkeep Gods.
  • After 28 days (4 Cycles after creation) — 1 Scarlet Chains Black is required to be sacrificed to the upkeep Gods.

If you fail to pay upkeep on your Witching Hour within 72 Hours of it being due, it will self destruct and you will lose your Witching Hour.

Please note: Link Enhancers will not work on Witching Hour.

Shattering Chains

A Chain is only as strong as it’s weakest link, and over time, a Chain tends to weaken.

The same logic now applies to Scarlet Chains.

Rather than Scarlet Chains offering the same payout structure, it has now changed to the following:

If your ROI is anywhere between 0%-100% there is 0% Shattered Taxes on Claims (i.e nothing has changed).

If your ROI is anywhere between 100%-200% there is 30% Shattered Taxes on Claims (i.e rather than there just being a 15% Claim Tax, there is also a 30% Shattered Tax which is a total of 45%).

If your ROI is anywhere above 200% there is 60% Shattered Taxes on Claims (i.e rather than there just being a 15% Claim Tax, there is also a 60% Shattered Tax which is a total of 75%).

The ROI is backdated to the launch of Scarlet Chains. If you migrated into Scarlet Chains, the cost will be based off of what the Chains would have cost if you purchased them from scratch.

ROI Calculation is as follows:

Amount of $SCAR Claimed at time of Claim, minus claims tax/sales tax/shattered taxes.

i.e if you have a Chain that is at 0% ROI and Claim 1 $SCAR, this would equal 1 minus 0.15 (Claim Tax) minus 0.15 (Sales Tax) = 0.7 $SCAR towards ROI. In relation to ROI, the Sales Tax is calculated at the time of Claim so after the fact you can use your $SCAR how you wish (i.e Sell/Transfer/Create Chains/Compound).

Compounding does not count towards ROI, only claiming (and anything that is automatically claimed at the time of compounding). However, as there is no way too exclude this from calculations, any compounding done in V1 Scarlet Chains WILL count towards the ROI of that Chain.

For Chains created in V1 use the average cost of REDLC when it comes to working out ROI (As they needed REDLC to create, rather than USDT-R).

Witching Hours are immune to Shattered Taxes.

Please note: When you enter your chains in a Sacrificial Vault (Dawn or Dusk), the ROI% from the sacrificed chains gets added to the new Chain.

Once your ROI hits 400%, your Chains will stop producing rewards, however, all is not lost as your Chains start to shatter thanks to…

The Regeneration Vault

The Regeneration Vault is a new vault in the Scarlet Chains Eco-System. This can be used to regenerate your Shattered Chains into fresh Chains.

The way this works is as follows:

When you have 3 Chains of a single type (i.e Scarlet Chains Reds can only enter the Regeneration Vault with other Scarlet Chains Reds) that have hit 250% or more ROI, you can enter these into the Vault.

To enter the Regeneration Vault, you will need to pay an entry fee of 10 $USDT-R per chain entered ($30 in total).

Once you have entered the Vault, 2 of the 3 Chains will be sacrificed, which will in turn Regenerate the 1 remaining Chain, making it so that it is back to having 0% ROI when it comes to Shattered Taxes. The remaining Chains new ROI will be based on what the Chain would cost at that time. I.e if $SCAR is $60 at the time of regenerating, the ROI for the new chain will be based on this price point.

Changes to Sacrificial Vaults

Whenever you enter one of the Sacrifical Vaults (Dusk or Dawn), the newly created chain (if you receive a Chain rather than a Link Enhancer) will have the ROI of the highest Chain entered. For example, if you were to enter 3 RED Chains, one with 30% ROI, one with 50% ROI, and one with 90% ROI, the newly created chain will have 90% ROI from the get go.

There will also be a Sacrificial Tax for all chains entered into the Sacrificial Vaults.

Chains @ 50% — 100% ROI = 2% tax on claimed ROI
Chains @ 100% — 150% ROI = 4% tax on claimed ROI
Chains @ 150%+ ROI = 6% tax on claimed ROI

All Sacrificial Tax will be paid in USDT-R.

Chain Creation Tax

When upgrading your Chains (i.e from Red to Platinum or Platinum to Black. This does not apply to creating a Witching Hour), you will need to pay a Creation Tax.

Chains @ 50% — 100% ROI = 2% tax on claimed ROI
Chains @ 100% — 150% ROI = 4% tax on claimed ROI
Chains @ 150%+ ROI = 6% tax on claimed ROI

The Rising Floor

If you have read the Scarlet Chains Whitepaper, you would know that we have the ability to raise the floor price of $SCAR.

This is currently at $20, however, when Scarlet Chains V2 rolls out, the price of $SCAR will increase to $60.

Token Migration

Because we are raising the floor such a significant amount in one go, you will need to migrate your $SCAR to a new token. This will be done through a simple swap dApp and will be at a 3 to 1 ratio.

e.g 30 $SCAR v1 ($600 USDT-R worth) will swap to 10 $SCAR v2 ($600 USDT-R worth).

Any $SCAR that is unclaimed before migration will be also be lowered at a 3 to 1 Ratio in your unclaimed rewards.

This is to make sure that anyone who has been hoarding $SCAR token waiting for the rising floor to kick into place won’t be able to take advantage of the protocol.

I understand this may be a lot to take in, but as per usual please take the time to go through this as many times as you need to, and don’t be afraid to ask questions in our Discord or Telegram.

As you can see, there are quite a few changes going on! In order for us to be able to implement everything here and not have everyone migrate contracts across entirely, we will need to bring down the Scarlet Chains dApp for up to 72 hours. If you do not want to miss out on rewards during the downtime, please make sure you have paid your Upkeep beforehand. We will give you a heads up before taking the dApp down in our Discord Announcements.

Your Chains will still be generating rewards in this time.


Rory (RED)

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