What are RTokens?
Stable asset-backed currencies launched on the Reserve protocol are called “RTokens”.
RTokens are initialized by deploying a configuration to Ethereum where anyone can then create RTokens by depositing a basket of collateral in the form of ERC20 tokens. RTokens are fully redeemable for the underlying collateral at any time.
Reliable, permissionless access
Mint and redeem onchain 24/7.
RTokens are redeemable 1:1 for the assets that back them.
Their collateral assets are held by smart contracts, which
don’t take vacations. You don’t need to wait until Monday or
worry about bank holidays, everything is available 24/7,
when you need it.
Many useful collateral assets are, however, backed by
off-chain assets and come with their own caveats. But the
RTokens themselves and all of their onchain collateral are
visible at all times, so no proof of reserves is needed on
the RToken layer.
RToken governance
RTokens can be governed however their creators choose, but
the Reserve protocol includes a default token-voting-based
option called Governor Anastasius.
Governance defines the asset basket and an ordered list of
emergency collateral that can be adopted in the case of a
primary collateral asset defaulting. When governance updates
a basket or in the case of a default, the protocol makes
onchain trades to reach the new basket composition.
Overcollateralization
for greater stability
RTokens are designed to be overcollateralized, which means that if any of their collateral tokens default, there's meant to be a pool of value to preserve the expected value for RToken holders. RToken overcollateralization is provided by the Reserve Rights (RSR) holders who chose to stake on each RToken, and the amount varies.
An RToken’s collateral can generate revenue, and it can direct a portion of that revenue to RSR stakers. This can incentivize RSR holders to stake, and thus provide overcollateralization.
Programmable revenue sharing
Governance determines how the protocol distributes revenue
generated from the underlying collateral between RToken
holders, RSR stakers, and any arbitrary Ethereum contract or
address.
Some RToken governors may choose to send most of the revenue
to RToken holders, growing the RToken’s value and
incentivizing a higher RToken market cap. Other RToken
governors may choose to pay RSR stakers more in order to
incentivize more overcollateralization.
Even more creative revenue sharing might include chosen
charities, contributing organizations, platforms that
support use of the RToken, or entrepreneurs who launched the
token initially. The system is built with flexibility in
mind.
Collateral default and self-healing
In the rare case that an RToken's collateral defaults,
staked RSR can be seized in a process that is entirely
mechanistic based on oracle price-feeds, which does not
depend on any governance votes or human choices.
Since RSR stakers take the first loss and are typically the
decision makers for what backs an RToken, their incentives
are typically aligned with RToken holders to choose safe
backing.
