Introducing hyUSD, a yield-bearing RToken aimed to create a fair financial system for all.
Hodl Stable money and earn passive income, powered by DeFi
High yield USD (hyUSD), is a decentralized flatcoin initially pegged to $1 USD that provides convenient access to DeFi yields, enabling holders to grow and preserve their wealth. hyUSD is 1:1 asset backed by a basket of other yield bearing tokens including eUSD as well as tokenized lending with exposure to US Treasuries. Given the unique design and current market conditions it is estimated to yield 8% or better to anyone holding hyUSD in any wallet, outpacing the rate of inflation in over 100 countries around the world and providing safe refuge for purchasing power everywhere. As with all asset-backed currencies issued on the Reserve protocol, hyUSD aims to be overcollateralized with auditable proof of reserves available on-chain 24/7.
In this RFC I will give you an overview of hyUSD. I highly encourage the community to ask questions and share their suggestions. I’d also appreciate any help I can get in growing the RToken - if you want to help bring this product to success, please do reach out to me on twitter: @Tom_hyUSD or email at Tom@high-yield.io
What is the mandate?
- A decentralized flatcoin that provides convenient access to DeFi yields, enabling holders to earn passive income on their capital. Governance should aim to take low to moderate risk to return high DeFi yields in order to mitigate against inflation.
Why is that the mandate?
I wanted the mandate broad enough to capture the right risk to reward ratio, but also narrow enough to focus on a specific market.
Who is the deployer?
My name is Tom. I am launching pseudonymous for now as I think that would be best in the early stages of deployment. I plan on opening up more at a later date. I discovered Reserve shortly after the IEO on Huobi back in 2019.
Why did I decide to deploy the RToken?
I thought it would be a unique opportunity to be a part of what could potentially be an upgrade to the current financial system. I’m also kind of a defi geek at heart.
What’s in it for me?
The most interesting thing in my mind when I think of potential success is I hope to eventually be able to ask myself something along the lines of …”did I just deploy a fair financial system for all?” I still haven’t been able to wrap my head around what that means and what it looks like. But being able to ask that sort of question is what I would take the most pride in and what I would consider what’s in it for me.
Collateral Asset Backing
What does the initial collateral backing for this RToken look like?
- 13.5% fUSDC - Flux USDC.
- 13.5% fDAI - Flux DAI.
- 36.5% Convex/Curve MIM+3CRV pool.
- 36.5% Convex/Curve eUSD+FRAXBP pool.
Why was this collateral backing chosen?
All of the assets I believe have the following traits. 1) they are sufficiently decentralized. 2) they strike the right balance between risk and reward.
Should governance keep the collateral backing as it is or update it whenever it can?
This will be an ongoing process to keep the basket up to date. For example, if hyUSD continues to grow in market cap, the yield will eventually drop slightly, and to counter that, governance should be open to adding in more assets that fall under the traits above. As well as make sure that hyUSD risk tolerance stays low to moderate.
What is the estimated APY with the initial collateral backing?
Around 8% to hyUSD holders.
What will the initial revenue distribution look like?
- 81% to Rtoken holders.
- 16% to RSR Stakers.
- 3% to hyUSD Treasury: The Treasury will likely be used for potential expenses such as Exchange listings, Strategic Partnerships, and providing liquidity to trading pairs for hyUSD on dex’s which will allow the hyUSD ecosystem to continue to grow. There is a possibility that these funds could be governed by a DAO in the future.
Why was this particular distribution chosen?
The distribution was chosen to be competitive in a growing yield-bearing market. If the rewards for holding hyUSD were significantly lower than the underlying assets then it would not be attractive for users to hold the RToken over those assets directly.
The reward distribution for RSR stakers must also be attractive so that they have the incentive to stake and risk their tokens, while also providing governance.
The revenue going to the treasury will be directed towards the continued success and growth of hyUSD.
How does this RToken differ from competitors?
- Dynamic basket management by RSR stakers, who are incentivized to manage it properly.
- RSR default protection up to a certain amount.
- Competitive yield vs other yield savings products.
- Prioritizes the use of decentralized stablecoins in the collateral basket.
Why will people use this RToken?
- Stability: hyUSD will be initially pegged to 1$ USD providing stability to holders.
- Passive Yield Exposure: Users can earn passive income on their capital by simply holding hyUSD in their wallet.
- RSR Staking Protection: RSR tokens that have been staked on hyUSD, will be sold off in the event of a de-peg by any of the underlying assets in the basket.
- Simplified Defi Exposure: Holders gain exposure to Defi through the underlying basket of assets.
Go To Market
Who do you see as the early adopters and advocates of this RToken?
- People who are trying to escape inflation.
- People looking for a wealth building strategy.
- DeFi enthusiasts exploring ways to earn passive income.
- DeFi yield farmers, especially on Curve.
- DAOs, Hedge Funds, and Market Neutral Yield Funds who want to diversify their treasuries.
- RSR stakers who believe in the project.
Community members are invited to create novel strategies and tactics to raise awareness for hyUSD and improve its positive impact on the wider crypto community. If you have go-to-market ideas and would like to contribute please leave comments and suggestions.
What does success look like for this RToken?
A highly liquid flatcoin that can be easily minted, traded, and used in DeFi protocols.
Why was this RToken name chosen?
High-Yield USD does a good job of describing what the product is and what holders can expect when holding hyUSD.
What does the logo look like?
Why was this logo chosen?
A simple logo that is very unique and demonstrates a hand waving “hi”.
What does the brand represent?
The brand is the embodiment of the RToken mandate and represents the future of money and a fair financial system for all.
Call To Action
What is expected from the RToken’s governors?
- I expect Rtoken governors to see the vision of hyUSD and align themselves with the continued success of hyUSD.
What can the community do to make this RToken a success?
- Get involved! If you ever wanted to be “early” to a project, now’s the time .
- Please share any thoughts you have about this RToken in the comments below.