Michaël van de Poppe - 08 July 2022
Reserve Protocol´s Increasing Adoption
In the last few months, there has been awful news for stablecoins. First, the UST collapse was the biggest problem because it was unexpected and too big. The collapse was too fast and effective, creating impressive fear in all cryptocurrency markets and other stablecoins. The fear even caused the depeg of USDT, the biggest stablecoin, for a while. On the other hand, some stablecoin are getting impressive adoption from the community, like RSV. Today, we will talk about The Reserve protocol, its stablecoin RSV, its governance token RSR, and the opportunity its increased adoption brings to the investors.
Reserve Protocol, RSV & RSR
The Reserve Protocol was built to be secure and provide a viable alternative to the centralized fiat currencies today. They've deployed a basic stablecoin on Ethereum, RSV, which wraps existing fiat backed USD stablecoins. Right now, it's supported by 1/3 USDC, 1/3 TUSD, and 1/3 PAX. This simple stablecoin exists as a hedge in case any of its underlying collateral assets gets shut down or has troubles, as they can be swapped out for other stablecoins. Reserve Rights (RSR) is an ERC-20 token that will serve two primary purposes for the protocol; ensuring reserve stablecoins through staking and governing them through proposing & voting.
The Reserve App allows people to save, spend, and receive money in a stable currency without needing a foreign bank account. The app facilitates local currency conversion into Reserve dollars (RSV), so users can move money freely between their local banks and the most popular online payment platforms and cryptocurrencies. These transactions are carried out by third party entities verified and authorized by the Reserve team to perform this function.
Stablecoin RSV is currently accepted at 18,000+ merchants across Latin America through the Reserve app. Reserve is currently active in Venezuela, Argentina, Colombia, Panama & Peru and expects to expand into Mexico. The app has a monthly volume of $100m+, 640k+ registered users and ~100k weekly active users. The $100m+ volume is all consumer transactions used in real life when buying or selling a product or service.
RToken is the generic name for a stablecoin that gets created on top of the Reserve Protocol. The core team is releasing two RTokens upon the initial protocol launch which is expected to happen soon. The first is a pure USD coin, backed only by USD stablecoins, much like RSV. It will be stable against USD and not generate revenue. The second is a yield-bearing USD coin, backed by DeFi USD tokens, such as cUSDC, aUSDC, and cDAI. That feature is essential because these tokens can be lent to large platforms like Aave and Curve for revenue generation. Eventually, RToken holders and RSR stakers will benefit from the yield generation process of the RTokens through the guidance of RToken issuers.
Reserve Right stablecoin RSV has been working effectively for more than 2 years. The Reserve App adoption is massive in Latin America because it solves the problem of inaccessible banking services and hyperinflation of local currencies. The app is currently active in Venezuela, Argentina, Colombia, Panama & Peru. Additionally, it will launch in Mexico soon which means more adoption and users.
The date of the mainnet launch is not announced yet. However, 92% of the process is completed. RToken launch is the most characteristic feature of Reserve Protocol because of its staking opportunities for RSR token. It is extremely beneficial to have a stablecoin that offers yield, especially in poorer countries that battle inflation like Latin America. Adoption of Reserve App, mainnet launch, and RToken launch gives bullish signals fundamentally because all that means increased usage, more revenue, and higher staking rewards. Despite the bear market, it would likely be a good idea to follow news on Reserve Protocol for possible profit opportunities.