What is Reserve Protocol?
@reserveprotocol enables anyone to launch 1:1 stable asset-backed currencies called RTokens
The protocol’s unique value proposition is to create currencies (ie. RTokens) that do not inflate
In case you have yet to browse their site, Reserve Protocol has a 35 minutes introductory video (sorry, I gave up halfway...) that gives a good primer on what they are seeking to solve
The protocol was launched in May 2019 by @nnevvinn and received US$5 million in venture funding from @peterthiel, @cbventures, @DistributedG, @GSR_io and others
RTokens, what are they?
On Reserve Protocol, anyone can create their own RToken through a number of simple steps (greater details is shown in the docs):
A user interacts directly with Reserve Protocol’s smart contracts to deploy a permissionless pool
They configure the initial basket of assets, determining which ERC20 tokenised assets they wish to include as collateral and their respective weightage
Additional configurations are conducted, including determining the governance of the RToken, accrual of revenue from underlying assets and other more specific nuances
Deploy your pool and obtain a representative RToken currency
The ERC20 tokenised assets selected are usually yield generating assets, such as @RocketPool_Fi's rETH, to ensure they hold their overall value in the long term to combat inflation
There are NO lock-up periods nor fees attached for depositing or withdrawing collateral into the RTokens
RTokens have an additional layer of protection in the event of a collateral default; $RSR token holders are able to stake on their favourite RToken of their choice to earn a portion of the yield generated from the underlying assets, but are presented as first-loss capital should a default occur
Depending on the traction of the RToken currency, they are available to be used as collateral on a number of platforms such as @MorphoLabs, @SiloFinance and @ionicmoney
To date, there are 12 types of RToken, cumulating into a whopping US$240.56 million in total value locked (based on @DefiLlama) across Ethereum and Base
The largest RToken is ETH+, which stands at US$112.8M in TVL and sees the yield generating wstETH, rETH and sfrxETH as the collateral used in equal proportions
How has the progress been thus far?
Reserve Protocol was launched in 2019, prior to DeFi Summer where we saw the huge influx of DeFi protocols such as @Balancer and the likes
During that period of time, yield farming opportunities were rare, and RTokens provided an innovative means for users to combat inflation through making your assets work for you
To date, Reserve Protocol has done a good job towards creating sub-communities for their RTokens:
@ETHPlus_, @dgnETH_ and other RTokens have their own spun off communities that are working hard towards garnering TVL and driving utility for the RTokens
This has translated towards a very successful TVL strategy for the protocol; Since their inception, the TVL has risen steadily from a mere US$10M to US$240M where we see it today
The core team is still grinding strong, providing new initiatives to encourage a flourishing RToken sub-communities and adjusting their governance tokens’ supply to reduce emissions + pumpamentals
Tokenomics (As of 24 August 24)
$RSR serves as the governance and utility token for RTokens of Reserve Protocol
Market cap stands at US$328.4M, with slightly more than half of the total supply circulating (~51%)
FDV stands at US$643.3M
24H trading volume stands at US$66.6M, with most of the volume being on-chain
Utilities of $RSR are very interesting and big brained, which is one of my favourite things about the protocol:
$RSR utilities are centred around RTokens
$RSR holders can stake their tokens on a RToken of their choice, serving as first-loss capital to overcollateralize the RToken
While the risks are higher, staked $RSR token holders receive higher yields as the market cap of the RTokens goes up (as the revenue is split between collateral depositors and $RSR stakers on a fixed percentage basis, assuming $RSR stakers hold constant)
$RSR stakers can participate in the governance of the RToken, modifying or improving certain aspects of the RTokens
The beauty of $RSR’s tokenomics is that it creates a positive closed-loop ecosystem for holders; you trade and generate sustainable yields within the Reserve Protocol ecosystem, and are incentivised to contribute even more as the prices go up
Reserve protocol, worth your time?
Today, Reserve Protocol has grown immensely since it first began; the team has stuck through the bear cycle to create a lasting product and sub-communities that are flourishing
Impressively, almost each RToken has their own X (previously Twitter) page and are actively sourcing new initiatives to boost their utilities - The core team seems to be continually grinding hard to push their sub-communities to the next level as well
I expect TVL to continue growing as the sub-communities grow and more RTokens are launched through Reserve Protocol, especially with the increasing number of yield opportunities in the DeFi space
On the tokenomics front, the attention to emissions spells positivity to $RSR's prices, and while the absence of listing of $RSR on tier 1 exchanges seems puzzling, it could signify a potential upside (who knows?) Overall, the protocol seems pretty dang solid, and its something that I would pay a closer look into especially if you have spare change lying around to yield farm.