Introduction
Introducing rgUSD, an overcollateralized stablecoin launched on Reserve Protocol that acts as a collective point for DeFi users to negotiate with stablecoin yield providers for the best returns.
Revenue Generating USD (rgUSD), is an overcollateralized stablecoin that deploys its capital into high yield, market neutral, low risk venues across DeFi. rgUSD directs the revenue generated from its collateral basket into supporting rgUSD growth, via incentivizing liquidity pools, lending markets and other safe, positive sum growth opportunities. These incentives are distributed proportionally based on TVL. As with all asset-backed currencies issued on the Reserve protocol, rgUSD aims to be overcollateralized with auditable proof of reserves available on-chain 24/7.
In this RFC I will give you an overview of rgUSD. 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: @LogarithmicRex or email at rgusd@rexkirshner.com
Mandate
What is the mandate?
Hold $1 USD peg, and deploy collateral to generate safe, on-chain yield to incentivize liquidity for itself and partners
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.
Deployer
Who is the deployer?
My name is Rex - you can find me at LogarithmicRex on all social platforms. I am an Ethereum researcher, content creator and investor/participant in De-Fi. I discovered Reserve in 2021.
Why did I decide to deploy the RToken?
While we have seen a lot of innovation in stablecoin design, we generally see models that concentrate the profits generated from the underlying collateral into protocol/company profits. While these models have generated incredible profits, the centralization/capture of value is counter to many of the principles that make De-Fi and blockchain so special.
rgUSD is a different kind of stablecoin, one that is designed to grow through by deploying the profits generated by its collateral into the De-Fi venues where rgUSD is being used as incentives. This stablecoin will decentralize its profits and organically (and non-dilutively) grow the supply rgUSD over the long term.
What’s in it for me?
rgUSD is a public good that makes De-Fi better. By using rgUSD, users (myself included) gain all the benefits of participating in De-Fi plus an extrinsic revenue stream that is completely independent of how it is being used. This will make participating in De-Fi more attractive and will help DAOs, protocols and other people who pair with rgUSD to build deeper liquidity on-chain.
When rgUSD has permeated De-Fi, De-Fi is a better place!
Collateral Asset Backing
What does the initial collateral backing for this RToken look like?
100% aDAI (likely switching to sDAI)
Why was this collateral backing chosen?
The single collateral asset was chosen due to its high yield and to reduce friction of minting (lower gas costs) during initial RToken launch.
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. As the rgUSD grows, we expect to open the collateral basket to other assets for diversification and to maintain high revenue to power liquidity incentives
What is the estimated APY with the initial collateral backing?
Around 11% earned in collateral revenue.
Revenue Distribution
What will the initial revenue distribution look like?
- 90% - Liquidity Incentives
- 5% - DAO Liquidity
- 5% - RSR Stakers (governance and overcollateralization)
Why was this particular distribution chosen?
The distribution was chosen to maximize distribution of yield towards liquidity incentives.
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 DAO liquidity will be directed towards the continued success and growth of rgUSD liquidity.
Product Differentiation
How does this RToken differ from competitors?
- There is no comparable product that provides liquidity incentives to itself that can scale making it the ideal co-incentive partner for other stablecoins
- Its permissionless mint and redeem ensures a permissionless entry and exit that won’t leave LP’s stranded
- I.e. no waiting for borrowers to want to repay their loans
- Dynamic basket management by RSR stakers, who are incentivized to manage it properly.
- RSR default protection up to a certain amount.
Why will people use this RToken?
- Protocols trying to grow liquidity of their tokens are incentivized to pair with rgUSD as an efficient way to grow liquidity from its scalable liquidity incentives
- Stability: rgUSD will be initially pegged to 1$ USD providing stability to holders.
- Earns competitive market rates under the hood and pays its share in co-incentives
- Flexible: incentives can be directed at a variety of end destinations including lending market pools
Go To Market
Who do you see as the early adopters and advocates of this RToken?
- Protocols trying to grow liquidity of their stablecoins
- DeFi yield farmers, especially on Curve due to high yields of rgUSD pools
- RSR stakers who believe in the project
Community members are invited to create novel strategies and tactics to raise awareness for rgUSD 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 stablecoin that can be easily minted, traded, and can grow liquidity of other assets it is paired with.
Branding
Why was this RToken name chosen?
Revenue Generating USD does a good job of describing what the product is and what partners can expect when pairing with rgUSD.
What does the logo look like?
Why was this logo chosen?
A simple logo that is very unique and demonstrates the distribution of revenue and incentives through its arrows
What does the brand represent?
The brand is the embodiment of the sustainable liquidity incentives and a reliable co-incentive partner that will always deliver its fair share of revenue.
Call To Action
What is expected from the RToken’s governors?
- I expect Rtoken governors to see the vision of rgUSD and align themselves with the continued success of rgUSD.
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.