Proof of Reserves
Reservoir’s strategy is to generate a robust balance sheet for the protocol enabling rUSD to be the most scalable and used stablecoin in DeFi. The real-time balance sheet ensures the protocol solvency and establishes trust in that users can rely on the capital being available for redemptions and growth. Yield is generated through the onchain allocation of the reservoir balance sheet into real world assets, crypto backed lending market, and other DeFi protocols. The yield is then distributed to srUSD and trUSD holders creating a healthy flow of funds.
Assets
The asset selection and growth strategy at launch is foundational to the protocol’s success. Reservoir will partner with other protocols and firms to facilitate asset selection, growth, and risk management. With a focus on several categories of assets: DeFi yield, market making, money markets, crypto backed loans, and real world assets.
Digital Assets & DeFi Yield Strategies
Reservoir will integrate with approved DeFi protocols to provide a diverse set of on-chain yield. These will included liquidity pools, money markets, and yield protocols.
Real World Assets (RWA)
Reservoir will integrate with approved RWA curators to source assets based on demand from Reservoir governance. Governance will perform due diligence, onboard, and manage RWA collateral in an effective and efficient manner. RWA collateral will be allocated across a series of sub-categories of assets with various durations and exposure.
The current assets on the protocol balance sheet include:
Liabilities
rUSD - Stablecoin
Reservoir mints rUSD to fund protocol assets. Users will be able to receive rUSD by exchanging USDC (and in future other approved stable assets) to gain access to protocol yield through trUSD or srUSD. Redemption of rUSD from the protocol into approved stable asset collateral will also be available on demand via the peg stability module (PSM).
srUSD - Savings
Users can mint srUSD with rUSD to earn yield from the protocol, which will be determined by Reservoir governance. Users can redeem srUSD for rUSD anytime up to the amount of liquidity available in the PSM.
trUSD - Term
Users can mint trUSD with rUSD to earn yield from the protocol, which will be determined by Reservoir governance. Users can mint trUSD at different fixed term maturities and receive quarterly coupons. Users will redeem trUSD for rUSD once the maturity is complete.
Equity
This portion of Reservoir’s balance sheet is the most secure capital owned by the protocol, also known as the "Protocol Reserve." Reservoir will launch with an initial protocol reserve. Future equity will be equal to the starting equity plus any retained earnings, protocol fees, net interest income, liquidation fees, governance token sales, etc. The equity will be under the control of governance token holders.
Reservoir will launch with a large capital commitment from its initial contributors which will form the initial reserve. This will be funded by a strategic distribution of the governance token. Establishing this founding capital base will allow Reservoir to scale quickly. The initial strategic contributors will be required to participate and remain active in the governance, growth, and development of Reservoir.
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