Introduction
Introducing USD3, a yield-bearing USD stablecoin built on DeFi markets. USD3 is a fully asset-backed currency (“RToken”) created on the Reserve protocol. RTokens feature onchain asset-backing, revenue sharing, overcollateralization and mint/redemptions, governed by RSR stakers. This RToken’s aim is to become the native Web 3 currency.
Blue chip stablecoin index earning up to 10% APY
The Web 3 Dollar (USD3), is a decentralized USD stablecoin initially pegged to $1 USD that prioritizes safety and stability while balancing a competitive yield offering.
USD3 is 1:1 asset backed by a basket of yield-bearing tokens. Given the unique design and current market conditions, it is estimated to yield up to 10% APY from the most reputable protocols using the most established assets. USD3 is overcollateralized with auditable proof of reserves available on-chain 24/7.
This RFC is an overview of USD3. The community is encouraged to ask questions and share their suggestions.
If you want to help bring this product to success, please do reach out to me on Twitter: 0xTomSawyer and Telegram: TomSawyer0x.
Mandate
What is the mandate?
The native web 3 currency. A low-risk yield-bearing USD stablecoin built on DeFi markets. Governance should prioritize safety and stability, seeking highly-rated stables on reputable DeFi platforms.
Why is that the mandate?
I want the mandate to convey the idea of prioritizing safety and stability while balancing an attractive incentive to hold the RToken.
Deployer
Who is the deployer?
My name is Tom Sawyer and I go by 0xTomSawyer online. I have been a professional software engineer for over 5 years, including work at NASA JPL, my background is in Computer Engineering and Math. I have been involved in crypto since 2018 and worked for Chainwave in 2022 before working on my first RToken in Q1 of 2023. I am passionate about all things DeFi and am fascinated by the sovereignty that crypto provides.
Why did I decide to deploy the USD3?
I see an opportunity to capture market share for a more conservative yield-bearing token that only has highly-rated stables in the collateral basket.
I enjoy deploying and building RToken brands. I am very passionate about DeFi and all things crypto.
In the short term, the goal is to provide a resilient yield-bearing stablecoin, accessible to anyone.
Thinking longer term, we need asset-backed currencies because the fiat standard might not last forever.
This is where experimentation is needed in the fight against inflation. I believe that RTokens can play a role in this battle, and ultimately, I would like to be a part of this revolution.
Collateral Asset Backing
What does the initial collateral backing for USD3 look like?
RTokens utilize yield bearing pyUSD, DAI and USDC receipt tokens from Aave, Compound and Maker.
33% Aave pyUSD V3
pyUSD Bluechip rating: PayPal USD
33% Savings Dai
DAI Bluechip rating: Dai
33% Compound USDC V3
USDC Bluechip rating: USD Coin
Why was this collateral backing chosen?
All of the assets are B or better on Bluechip.org - the stablecoin rating agency. All of the protocols are highly-rated on defisafety.com, which rates technical risk in DeFi.
Should governance keep the collateral backing as it is or update it whenever it can?
Governance should follow the mandate. If an asset falls below what would be considered highly rated (a benchmark might be B or better on Bluechip.org), then it would make sense to remove that asset from the collateral basket and replace it with an asset that falls within the mandate.
What will the initial revenue distribution look like?
85% to USD3 holders.
12% to RSR Stakers.
3% to USD3 Treasury.
Why was this particular distribution chosen?
The distribution was chosen to maximize yield to USD3 holders while balancing overcollateralization 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 the treasury will be directed towards the continued success and growth of USD3. I’d like to develop a frontend for minting and redeeming, and look to have USD3 sponsor a crypto youtube channel.
Product Differentiation
What makes USD3 unique from competitors?
We believe that the value proposition that USD3 offers is quite different from most other products on the market. USD3 is a blue chip stablecoin index earning up to 10% apy. This statement alone separates ourselves from most other products. We believe that a blue chip stablecoin is a stablecoin that is reliable and considered to be safe. But it also comes with two distinct qualities that differentiate USD3 from competitors even more.
- Dynamic basket management by RSR stakers, who are incentivized to manage it properly.
- This means that governors can continue improving the collateral assets as we see fit to continuously adapt to market conditions.
- RSR overcollateralization shielding up to a certain amount.
- In case any of the underlying assets default, RSR will be sold off to ensure that USD3 holders remain whole.
Why will people use USD3?
- Stability: USD3 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 USD3 in their wallet.
- RSR Staking Protection: RSR tokens that have been staked on USD3, 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 Plan
What is the initial strategy to grow USD3?
The strategy is outlined in 4 key components and how we plan to achieve success for USD3.
1) Strategic Liquidity Partners
The goal is to attract quality Strategic Liquidity Partners, ranging from whales, hedge funds and yield farmers who are seeking safe, stable and market outperforming yield in a permissionless store of value. Strategic Liquidity Partners or SLP’s are an important bedrock for bootstrapping a stablecoin.
2) DeFi/CeFi Integrations
The goal is to be highly liquid and usable within DeFi, this will allow USD3 to be brought to the masses. The strategy is simple: first we launch on DEXs, then integrate with lending markets, CDPs and leverage apps, and then move into fintech apps and potentially CEXs.
The Dex’s we believe would be good candidates are:
-Curve
-Uniswap
The Lending Markets we believe would be good candidates are:
-Curvance
-Compound
-Silo
-Euler
3) DAO Treasuries
The goal is to attract DAO Treasuries, a next step in the strategy, onboarding more users into USD3. Treasuries need to see sustainable performance and liquidity before moving into an asset. The value proposition to them is that USD3 is a better alternative to USDC and will provide more yield then bond exposure and the DeFi savings rate. It is a better alternative than USDC because it is diversified and overcollateralized by RSR stakers. In case any of the underlying assets default, the staked RSR will be sold off to ensure that USD3 holders remain whole. This safety mechanism was already market stress tested in the eUSD RToken during the Mar 2023 USDC depeg event. Through eUSD’s decentralized ‘self-healing’ capability, eUSD was able to autonomously recapitalize and return to $1 peg without the need for regulator or bank backstops.
Example DAO Treasuries that could be good candidates for USD3 are:
-Gitcoin
-1inch
-Covid Relief India
-Uniswap
4) Content and Community
The goal here is to develop a content calendar that can support and highlight all the accomplishments along the way. Telling a story and bringing in believers into the brand, and growing a community.
Community members are invited to create novel strategies and tactics to raise awareness for USD3 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?
Success can be measured in TVL and within the first 180 days, a goal of $30m TVL would be a force multiplier for growth. We believe this is a good benchmark of initial success.
Branding
Why was this RToken name chosen?
It’s short and direct, and it speaks to the goal we are trying to achieve—a safe dollar for a Web 3 world.
What does the token monogram look like?
Why was this logo chosen?
The 3 of Web 3 is meant to be a play on the dollar symbol with the line going through it.
It is tilted to play off of the Bitcoin logo tilt. And it’s green to represent money.
What does the brand represent?
The brand is the native Web 3 currency. And the goal would be to bring that representation into fruition.
About Reserve Protocol
Reserve is a free, permissionless platform on Ethereum mainnet Base to build, deploy and govern asset-backed currencies referred to as “RTokens.” RTokens are always 1:1 asset-backed, allowing for permissionless minting and redeeming onchain. Over 6 RTokens have been created on the reserve protocol accounting for $100 million in TVL as of April 2024.
- 8 audits: Reserve Protocol Docs | Security
- $5M bug bounty: Reserve Bug Bounties | Immunefi
- Revelo Intel April 2024 report
Call To Action
What is expected from the USD3 governors?
I invite RToken governors to see USD3’s vision and align themselves with its continued success — governing with safety in mind while mindful of conservative yield opportunities.
Follow USD3 on Twitter/X
Join the Discord
What can the community do to make USD3 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.