The community report replacing the bi-weekly X spaces. This edition catches up on the period since the last report. Covering September 11 - October 3, 2026
Last time, Reserve had two unlocking systems on the ballot. Now $RSR holders have chosen one and set its first position to High burn. The community’s attention is on “what does this mean for $RSR now?”
Across fifty public posts in twenty threads, twelve participants also worked through a less celebratory but equally necessary job: Ongoing work on optimising DTFs.
Burn Gauge set to High Burn
The September 17 result settled the choicematter. Both unlocking proposals passed their own 1B RSR quorum. The Burn Gauge received 1.101B RSR For, compared with 833.3M For for the Milestone Plan.
While the milestone ballot attracted more total voting power, For voting was higher on the burn gauge. The gauge also had broader support within its ballot: 80.44% For, against the milestone plan’s 52.55%.
The first setting vote, which closed September 25, chose High burn. Snapshot reports 69 voters, 1.161B RSR in total voting power, and approximately 1.002B RSR, or 86.27%, for High burn in the published scores.
Under that setting, each 1 RSR burned from protocol revenue calls for an additional 4 treasury RSR burned, with no treasury unlocking.
The setting lasts until the next gauge vote following the Q3 report. (Happening on October 15).
eUSD keeps growing through UGLYCASH
Ham’s Q3 eUSD report, lays out the distribution story. Reported market cap fell 2.4% to $22.75M, while total TVL rose 1.0% to $27.43M. Fintech balances grew 9.6% to $17.38M. UGLYCASH reached $16.22M, up 10.3%, and Sentz reached about $1.15M.
Fintechs now hold roughly 76% of circulating eUSD, with UGLYCASH alone at about 71%. That puts more of eUSD’s demand behind one partner, and makes UGLYCASH the most important stake holder of this DTF by far.
Base supply rose 11.6% to $17.49M and accounts for 76.85% of eUSD market cap. Mainnet supply fell 31.1%. Tracked DeFi supply declined 24.2% to $2.35M, although Aerodrome Base and Curve Base grew while Mainnet Curve contracted. Liquidity is following the chain where balances are accumulating.
Quarterly basket yield improved from 3.32% to 3.91%. RSR backing rose from 18% to 23%, while stRSR yield fell from 8.1% to 6.0%. The report also records lower transfer activity, which needs to be taken into account as well.
A new eUSD basket is close
The methodology-alignment proposal would replace today’s three-position basket with five strategies: 25% Aave USDT, 25% Compound USDC V3, 30% Gauntlet USDC Prime V2, 10% Gauntlet USDC Frontier and 10% Sentora PYUSD V2.
The proposed composition adds PYUSD, spreads exposure across more strategies, and raises the blended collateral yield from 3.86% to 4.56% follwing the proposal’s 30-day inputs.
The main new shared dependency is 50% Morpho exposure across three vaults. Diversifying curators is not the same as removing a common protocol dependency, although it has to be said that Morpho has had 0 pan-protocol security incidents so far. Gauntlet USDC Frontier has the narrowest capacity margin: the proposed $2.275M position represents about 8.8% of the strategy’s stated $26M TVL, stil within the methodology’s 10% limit.
Morpho V2 plugins merged into the protocol repository September 23, and Register support merged the same day. The proposed strategy can execute now! Thanks to the engineering team for shipping this.
A procedural wrinkle: Ham reported that a standalone ratification could not be submitted without changing the underlying DTF. Combining ratification with a mandate update or rebalance could reduce governance load. As a governance facilitator we’re highly supportive of linking two tightly coupled and dependent proposals.
Retiring DTFs - increasing security.
The response to September’s malicious proposals (all 1630+ of them!!) now includes reducing the number of unattended products. The BDTF and CLUB proposal had roughly $5,000 TVL in each and little active real governance. These have now been retired. Low-value DTFs with cheap governance tokens are an open invitation for governance attackers and vultures. Attacks have become comically cheap in the age of coding agents. A responsible choice here.
VLONE and MVTT10F face a related problem. Their RFCs report that Universal will sunset uAssets at the end of October, affecting approximately 56% and 17% of their baskets respectively. Both proposals favor a USDC rebalance and deprecation over maintaining inactive products through a wrapper migration.
Ham’s VLONE analysis explains why a $250K market cap does not settle the question. He counted only nine mints totaling about $420 over three months, and estimated roughly $502 a year retained within the Reserve ecosystem. Two addresses held about 99% of the DTF. Contacting those holders and planning their exits may create more value than preserving another listing.
For BGCI, the proposed response is migration instead: replace uXRP and uADA with Coinbase wrappers, uSOL with Base Bridged SOL, and uLINK with LINK on Base. XLM would leave the basket until a suitable replacement exists. That introduces tracking deviation and different custody or bridge dependencies. The forum record establishes an RFC, not a completed migration.
ETH+ has better exit liquidity, with a yield gap still to watch
The October collateral review reports a current ETH+ basket of 50% stETH, 25% weETH and 25% Frax staking exposure. ETHx and rETH are no longer in the reported basket.
At the review’s 5,000 ETH test size, greater than total current supply, modelled redemption slippage was 0.0725%. The diversification ratio was 63%, above the methodology’s 60% minimum. The report recommends no further basket changes this quarter.
The tradeoff: calculated holder yield was 2.12%, against 2.25% for stETH. The review prioritizes liquidity and safety over closing that small yield gap.
Governance questions
The September 24 eUSD revenue-share discussion began with a proposed UGLYCASH adjustment worth about $35 over fourteen days. Ham questioned whether that justified another onchain proposal.
The exchange exposed an institutional-memory problem: participants recalled different thresholds and had to retrieve the earlier amendment. Ham subsequently suggested a 3% relative threshold, estimating that it would have eliminated about one-third of IPs across the previous sixteen cycles.
OPEN’s methodology peer review supplied another form of governance discipline: The revised P/S plus Revenue Growth Q-5 result fell from about +29.4% to +20.1%, while Fee plus Revenue Growth S-5 moved from about +25% to -24.2% after input and rule corrections.
AI DTF distribution gets a concrete new route
1inch announced September 17 that PHOTON, BUILDOUT, ROBOTS, POWER and NEOCLOUD are available through its dApp and Wallet on BNB Chain. These are existing Reserve baskets holding Ondo-issued tokenized US stocks, not five new launches.
Register also merged 1inch as a quote provider September 16. That gives the distribution discussion a concrete integration to assess. Neither the announcement nor merged interface code establishes how much new capital or retained usage it has produced.
Still on the workbench
The wOUSD plugin pull request remains open and unmerged as of October 4, and reports no public deployment. Origin described monitoring, alerting and guardian procedures in response to delegate questions. The plugin’s stated limitations remain: it assumes a hard $1 OUSD peg.
DAOplomats introduced a delegate platform. Ham welcomed them and requested more recent evidence of their governance work. An introduction is an opportunity to broaden participation, not confirmation of an appointment or delegation.
What to watch next
Reserve has settled a major supply-policy choice. High burn guarantees more RSR burned in total.
Reserve has announced its Q3 report and community call for October 15, 16:30-18:00 UTC (09:30-11:00 Pacific). Questions are requested by October 13. Once more this will be a protocol-wide update, distinct from the eUSD Q3 report already published.
Attention is now on observable treasury burns; safe exits or migrations before the reported uAsset sunset; and a tightened eUSD revenue-share threshold.
Appendix: Reserve Protocol and RSR - Social media echo as reported by last30days
September 4 - October 4, 2026. This rolling window overlaps the previous edition. Engagement counts are collection-time observations.
High burn gives holders a simple message - The September 25 announcement from @reserveprotocol had 211 likes and 37 reposts, compared with 126 likes and 24 reposts on the gauge-adoption announcement. Nevin’s own endorsement was direct: “I support High Burn for this first vote. Let’s 
” Applause is not evidence of treasury execution.
Five-times burn is a scenario, not a transaction receipt - @cjdemelker illustrated the ratio with “An August-sized burn: 16.3M → 81.6M RSR total.” His example explains adding four treasury tokens to each protocol token burned. It should not be reported as an observed September burn.
Product education still has a comprehension gap - The relevant Reddit sample contains four distinct r/ReserveProtocol threads, including AI electricity and debt discussions and a BUILDOUT explainer. In the latter, u/Aggravating_Leg_3708 wrote: “Unfortunately my little brain can’t understand any of this. Just want my RSR bag to go up.” That single comment is not a community consensus, but captures the distance between explaining basket mechanics and answering tokenholders’ expectations.
Distribution has a testable next step - The first-party 1inch announcement confirms a route to five AI baskets. Reserve’s BUILDOUT post continues to make the infrastructure case: compute, memory, networking and power matter whichever model wins. What remains to measure is conversion into balances and repeat usage.
The next accountability date is October 15 - @reserveprotocol announced the Q3 report and call on October 2, covering platform metrics, revenue, RSR burn, treasury activity and strategy. The announcement had 66 likes and nine reposts. Holders should have that business update before choosing the next gauge position.
KEY PATTERNS from the research:
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Supply-policy participation is the clearest conversation - per @reserveprotocol.
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Burn ratios need execution evidence alongside the arithmetic - per @cjdemelker.
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Product access needs to become measurable usage - per 1inch’s first-party announcement.