It's Friday, Friday . Let's do something a little different.
22 Sep 2023, 16:32
It’s Friday, Friday 🤪... Let’s do something a little different!
@franklin_dao ’s recent research report came out 1 week ago, and is an excellent discussion on how the protocol works.
Key takeaways:
1⃣ RTokens can and have handled collateral depegs, such as during the recent USDC depeg. This is a security feature key to the protocol and the success of the recapitalization process depends on the amount of $RSR being staked onto the RToken. In eUSD’s case, the peg was restored to $1 far before $USDC’s came close.
2⃣ This eUSD crisis was precipitated by $USDC collateral being stored in accounts greater than FDIC limits, which $RSR overcollateralization could eventually present an alternative to. Indeed, in countries like New Zealand which do not have an FDIC equivalent, RToken overcollateralization makes it a compelling alternative - that’s before we even talk about inflation (more at
3⃣ As the protocol matures, the report suggests DAOs will start to deploy RTokens thanks to the ability to send RToken revenue to specific addresses, not just stakers and RToken holders. It even predicts entire organizations with the sole purpose of deploying and maintaining RTokens. This might be happening sooner than we think 🧐
4⃣ One of the key value propositions of RTokens is their transparency. Having verifiable, onchain proof of reserves will be the building block of trust in the protocol and the RTokens deployed using it and will likely reduce friction for wider adoption.
5⃣ Reserve protocol can embrace the Real World Asset wave to pursue its dream of making stable currency accessible for everyone. Traditional finance has recently plugged into decentralized finance more and more, but this movement is not one way. As more RWAs come onchain, the chances of more RTokens being backed by one (or multiple) grow by the day.
That’s all for this post. These are only our takeaways - there is a lot more to read in this report, which can be found above or here
We’d like to thank @franklin_dao for this detailed look at the protocol and we welcome any comment, disagreement or otherwise in the Reserve protocol discord.
Have a good weekend! 👋