Proposal to add rgUSD Gauges (7 total) [(eUSD, USDC), crvUSD, mkUSD, alUSD, DOLA, sFRAX, fxUSD]

Gauge Proposals
#1

References/Useful links:

rgUSD link: Reserve Register - Reserve Protocol Interface

Etherscan: https://etherscan.io/token/0x78da5799CF427Fee11e9996982F4150eCe7a99A7

Reserve website + documentation: https://reserve.org/

Reserve’s Discord: Discord

Protocol Github: GitHub - reserve-protocol/protocol: Permissionless asset-backed, yield-bearing & overcollateralized stablecoins on Ethereum

Reserve Protocol Twitter: https://twitter.com/reserveprotocol

rgUSD Description:

Revenue Generating USD (rgUSD) is an overcollateralized stablecoin launched on Reserve Protocol that acts as a collective point for DeFi users to negotiate with stablecoin yield providers for the best returns.

Governance of rgUSD is focused on two pillars:

  • finding safe high yield venues to deploy principle
  • fairly distributing underlying revenue to rgUSD holders who deploy their capital to markets.

rgUSD will isolate all yield earned by the underlying positions and redirect it to the distributor. Instead of distributing yield directly to rgUSD, diverging its price from target peg of $1, the RToken will distribute yield to registered rewards contracts based on time weighted balances of rgUSD in the pool. This enables rgUSD holders to direct where the yield is distributed based on where they position their balance.

rgUSD is backed by stablecoins in yield earning positions managed by governance. It is currently backed by only DAI lent on AAVE in order to minimize gas costs of mints while bootstrapping liquidity. As it scales, there will be votes to diversify the backing.

Reasons to support pairs w/ rgUSD

  • It’s a stable asset, so its price is reliable.
    • No need to worry about adapting native yield
    • stableNG pools work great!
  • It earns competitive market rates under the hood and pays its share in co-incentives.
    • Time weighted rgUSD balance informs yield distribution.
    • Yield delivered as rgUSD to registered incentive contract at end of each epoch.
  • It scales to meet your needs.
    • rgUSD’s multi position oriented structure ensures it can distribute its underlyings impact on yield rates and maintain a rewards flow inline with the market rate.
  • Its permissionless mint and redeem ensures a permissionless entry and exit that won’t leave LP’s stranded
    • I.e. no waiting for borrowers to want to repay their loans.
  • It’s built on Reserve protocol, that has extensively audited contracts

Gauges Proposed

  • rgUSD/eUSD/USDC (stableng)

  • rgUSD / crvUSD (stableng)

  • rgUSD / mkUSD (stableng)

  • rgUSD / alUSD (stableng)

  • rgUSD / DOLA (stableng)

  • rgUSD / fxUSD (stableng)

  • rgUSD / sFRAX (volatile v2)

About Reserve

Reserve Protocol is a free, permissionless platform on Ethereum mainnet (and Base L2) to build, deploy and govern asset-backed currencies referred to as “RTokens.” RTokens are always 1:1 asset-backed, allowing for permissionless minting and redemptions onchain. To cultivate RToken growth, Reserve’s core team invested $20 million in the Curve governance ecosystem to incentivize deeper onchain liquidity.

Relevant to this document is the RToken electronic USD (eUSD), a safety-first stablecoin (backed by Aave and Compound deposits) that brings together diversified, highly liquid backing with anti-bank run overcollateralization, recently proving itself during the run on Silicon Valley Bank.

Motivation for Gauges:

To deepen rgUSD liquidity onchain and create a reliable / self-sustaining co-incentive partner for stablecoins on decentralized exchanges.

Specifications:

  1. Governance: RSR holders who choose to stake RSR on rgUSD can propose changes to the basket or revenue split. The mandate of rgUSD governors is:
  • Hold $1 USD peg, and deploy collateral to generate safe, on-chain yield to incentivize liquidity for itself and partners.
  1. Oracles: rgUSD uses ChainLink price oracles in order to monitor prices of collateral assets.
  2. Audits: Audits have been performed by multiple top tier audit agencies.
  3. Centralization vectors of:
  • Gnosis Safe multi-sigs have several emergency powers described here.
    The holders of these roles can be found here
    1. Pauser
    2. Freezer
  • Gnosis Safe multi-sigs have yield distribution powers
    1. Revenue Distribution - rgUSD Revenue directed to Liquidity Incentives will be sent to an m/n multisig controlled by a collective of the RToken Deployer and partner protocols that have paired liquidity with rgUSD.
    2. DAO Liquidity - rgUSD Revenue directed to Liquidity Incentives will be sent to an m/n multisig controlled by a collective of the RToken Deployer and partner protocols that have paired liquidity with rgUSD.
  • The protocol will have automated operations to monitor and manage collateral for various RTokens. Examples include auctioning off backstop insurance collateral (i.e. RSR) and auctioning off collateral revenue to buy RSR or RTokens.
    1. starting an auction is permisionless and the transactor benefits in no way
    2. bidding in a started auction is permisionless and confers no advantage to the auction starter.
  1. Market History: The RSR token has been actively trading since May 2019. Price movements are correlated to the overall crypto market cycles. RSR currently trades on 40+ exchanges including Binance, KuCoin, OKX, XT.com, LATOKEN, Uniswap V3, and Curve with a current Market Cap of $292m. RSR currently trades on Curve in a RSR+eUSD+ETH+ pool. If the Reserve platform continues to grow with many large RTokens governed by RSR, we believe this gauge may bring consistent volume and fees to Curve.
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