Introduction to the Reserve protocol¶
We've deployed a basic stablecoin on Ethereum, RSV, which wraps existing fiat-backed USD tokens. Right now it's backed 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. The core team currently controls the RSV contracts with a multipass.
We've also deployed a governance token, RSR, which currently has no functionality, but will perform crucial functions in the future.
In 2018, we released a planned protocol design, but didn't implement it in full. Instead, we released the simple stablecoin referenced above, and then proceeded to spend all our time building a consumer platform for actually using stablecoins as normal money – the Reserve app.
Now that the app is picking up momentum, we've returned to protocol design and development.
We're not building and releasing the protocol exactly as described in our original white paper, because we've had several new ideas since then, and the Ethereum dev community has produced several defi primitives (e.g. AMMs and lending markets) which allow us to go further than we'd planned.
Purpose of the protocol¶
The eventual goal is to offer an alternative to fiat money. Basically, what cryptocurrency was originally conceived to do, albeit through different means than bitcoin.
The idea is that by aggregating together baskets of tokenized assets, we can create currencies that are stable in purchasing power without being dependent on state-issued currencies. We do not have any specific basket picked out, but we imagine the right baskets will include commodities, debt, and perhaps equities. Regulation may constrain which assets are tokenized and available. The protocol will need to facilitate evolution in the baskets over time, since the right basket today likely is not the right one next year.
If this works as conceived, the outcome will be a decentralized currency with stable purchasing power that cannot easily be debased.