DTFs can tap into multiple sources of liquidity & yield to optimize performance and streamline operations. Although DTFs are very different from ETFs and mutual funds, it can be helpful to compare some of their characteristics. Anyone can create a new DTF, and anyone can mint or redeem them—no need for exclusive third-party intermediaries or large institutions.
Thus, as rewards are earned, the exchange rate of staked RSR to RSR increases. By harnessing the speed, flexibility, and transparency of decentralized technology, DTFs introduce a new chapter to ETF investing. DTFs offer targeted exposure to the rapidly shifting crypto landscape—all while delivering real-time insights and 24/7 global tradability.
– How can I estimate my RSR staking or vote‑lock returns?
- The following list goes into detail about what these parameters do and some of the factors the deployer should keep in mind to set them.
- For this reason, the Reserve protocol is entirely permissionless, allowing anyone to deploy a DTF with their preferred collateral basket, governance system, and revenue distribution.
- This is necessary to prevent stakers from withdrawing and re-depositing over and over in order to subvert the withdrawal delay mechanism.
All underlying assets and transactions are visible onchain 24/7, reducing uncertainty and offering up-to-date information for investors. As many of these parameters concern the Protocol Operations, we advise reading through that section of the documentation first—as it will give the deployer the necessary context to fully understand all parameters. In January 2024, organizational changes were announced to the Reserve Ecosystem.
To us, money is not a dirty word…
What if you could earn some money today and set it aside for yourgrandchildren, and when they spent it 100 years from now, they got to buy something just as valuableas what you could have bought right now? That’s not how fiat currencies tend to work, even the bestones like the US dollar. While each DTF can have its own customized governance system, we expect most DTFs to use our default configuration where the amount of RSR tokens a participant stakes or locks serves as the voting weight. The easiest way to stake your RSR is to use a user interface that interacts with the Reserve Protocol smart contracts, such as the Reserve app. If you’re looking for an easy tutorial on how to stake, please refer to this article. DTFs can serve a wide variety of purposes, from stablecoins to diversified investment portfolios.
Un-staking RSR comes with a delay, which is configurable by governance, and predicted to usually be between about 7 and 30 days. This delay is necessary so that in the event of a default, the staked RSR will remain in the staking contract for long enough to allow the Yield DTF to seize any RSR it needs to cover losses. In legacy systems, only a handful of large entities can create new ETF products, and share creation/redemption is often restricted to designated participants.
This governance system is a slightly modified version of OpenZeppelin Governor. Any tokenized position—e.g., liquidity provider or lending tokens—can be included in a DTF. DTFs offer What Is a Stock Index strategic exposure at any scale, from broad-market trends to emerging sectors. The following types of ERC20s are not supported to be used directly in an RToken system.
As part of these changes, Confusion Capital is a new entity who will manage funding for the Reserve Ecosystem, including Best Friend Finance, and ABC Labs (who focuses on core protocol development). The Slower Wallet is a wallet that is administered by Confusion Capital (receiving a portion of funds from the Slow Wallet), which imposes additional withdrawal restrictions. Governor Anastasius allows RSR holders to participate in the decision-making process of the Yield Protocol by proposing, voting on, and executing proposals.
Where to access DTFs
In return for providing this overcollateralization, RSR stakers can expect to receive a portion of the revenue from the specific DTF that they stake on. As a general rule, RSR stakers will receive more revenue as the market cap of the DTF they stake on increases. The way we think this cryptocurrency should be built is by backing it with a diverse andwell-structured basket of many different tokenized assets that will hold its overall value for a longtime. These could include all kinds of precious metals, commodities, debt & equities. We believe that open exploration and competition can surface the most effective basket compositions and governance models—for both resilient money and diversified investment vehicles.
Index DTFs
The Reserve Protocol lets anyone deploy a token that is issuable and redeemable for a basket of any other tokens. This is necessary to prevent stakers from withdrawing and re-depositing over and over in order to subvert the withdrawal delay mechanism. It is possible for users to cancel unstakings at any time to resume staking and earning rewards. When RSR is staked on a DTF, it is deposited into a staking contract specific to that DTF, and the staker receives a corresponding ERC-20 token, representing their staked RSR position on that particular DTF. This token is transferrable and fungible with other staked RSR balances for that DTF, so you can send any portion of the staked position to someone else or trade it, and the new holder can un-stake it if they choose to. Traditional financial products often update their holdings on a daily or monthly schedule.
Vote-locking on Index DTFs
Future RSR emissions are set on a deterministic schedule which emulates the emissions curve of Bitcoin. For more details on this decision, check out this blog post, or visit CoinMarketCap’s Token Unlock page to see the exact RSR unlock timeline. The Slow Wallet is a locked wallet controlled by the Reserve project team, used to fund DTF adoption initiatives. It has a hard-coded 4-week delay after initiating each withdrawal transaction on the blockchain. For Yield DTFs, Governor Anastasius is the protocol’s recommended governor implementation, which is detailed next.
With DTFs, anyone can deploy a new basket of tokens, and anyone with an internet connection can mint or redeem them. This open model empowers smaller innovators and even individuals to launch curated folios around new ideas—or mirror the portfolios of experienced market participants—on a global scale. This is the reason why the Reserve community intends to enable and encourage the creation of asset-backed currencies that aren’t pegged to the US dollar, but to the aggregate value of the global economy. By collateralizing currencies with broad, transparent portfolios (including stocks, bonds, gold, real estate, and more), Reserve aims to enable decentralized, inflation-resistant currency capable of scaling globally. Staked RSR can be seized by the protocol in the event of a collateral token default, in order to cover losses for DTF holders.
Trade themes, not tokens
For this reason, the Reserve protocol is entirely permissionless, allowing anyone to deploy a DTF with their preferred collateral basket, governance system, and revenue distribution. Today the protocol is best used for bundling DeFi assets together to create yield-bearing USD stablecoins and other composite assets. Our approach is to bundle stocks, bonds, gold, real estate, and more into an index, and use that as money.
- DTFs offer targeted exposure to the rapidly shifting crypto landscape—all while delivering real-time insights and 24/7 global tradability.
- As Index adoption grows, a larger and steadier flow of fees is converted into burns, introducing a structural deflationary pressure on the RSR supply.
- Besides the creation of RTokens, this user interface will also support exploring usage and stats related to RTokens, RToken minting & redeeming, and RSR staking.
- It follows a delegation system where RSR holders can delegate their voting power to other addresses.
- For more details on this decision, check out this blog post, or visit CoinMarketCap’s Token Unlock page to see the exact RSR unlock timeline.
- These tokens should be be wrapped into a compatible ERC20 token to be used within the protocol.
A collateral asset can instantly default if one of the invariants of the underlying DeFi protocol breaks. If that would happen, and we would not apply a trading delay, the protocol would react instantly by opening an auction. This would give only auctionLength seconds for people to bid on the auction, making it very possible for the protocol to lose value due to slippage. Creating an RToken can be done either by interacting directly with the Reserve Protocol’s smart contracts or any user interface that gets built on top of it. The first user interface for these smart contracts will be released by ABC Labs the company that’s leading protocol development.
Deflationary sink via protocol fees
These tokens should be be wrapped into a compatible ERC20 token to be used within the protocol. Taking a look at the history of currency reveals that, whenever a major world empire gives way to thenext one, the value of the currency that the empire issued tumbles. Besides this phenomenon havinghappened with currencies such as The Dutch Guilder & The British Pound, recent speculation by Ray Daliostates that “the US dollar is not destined to remain the world’s reserve currency”. So far the protocol has been implemented in Solidity and deployed on Ethereum, Base, and Arbitrum.