Proposal to add USD3/rgUSD to the Gauge Controller

Gauge Proposals
#1

Summary:

Proposal to add USD3/rgUSD to the Gauge Controller

References/Useful links:

Link to:
• Curve Gauge Vote: https://dao.curve.fi/vote/ownership/707
• Snapshot Convex vote: Snapshot
• Github Page: GitHub - reserve-protocol/protocol: Permissionless asset-backed, yield-bearing & overcollateralized stablecoins on Ethereum
• USD3 (Reserve): Discord: Discord
• USD3 Twitter: twitter.com/USD_3

Web 3 Dollar Description:

The Web 3 Dollar (USD3), is a decentralized USD stablecoin initially pegged to $1 USD that prioritizes safety and stability while balancing a competitive yield offering.

USD3 is 1:1 asset backed by a basket of yield-bearing tokens. Given the unique design and current market conditions, it is estimated to yield up to 10% APY from the most reputable protocols using the most established assets. USD3(deployed on the Reserve Protocol) is overcollateralized with auditable proof of reserves available on-chain 24/7.

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:

To deepen on-chain USD3 liquidity, to ensure more efficient swaps and to further grow demand for the token.

Specifications:

  1. Governance: RSR holders who choose to stake RSR on USD3 can propose changes to the basket or revenue split. The mandate of USD3 is a decentralized flatcoin that provides convenient access to DeFi yields, enabling holders to earn passive income on their capital. Governance should aim to take low to moderate risk to return high DeFi yields in order to mitigate against inflation.

  2. Oracles: USD3 uses ChainLink price oracles in order to monitor prices of collateral assets.

  3. Audits: Audits have been performed by multiple top tier audit agencies.

  4. Centralization vectors:
    1.Gnosis Safe multi-sig
    2.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.

  5. 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 and Huobi with an average daily volume of $50M to $200M over the last 90 days. RSR currently trades on Curve in a TriRSR (eUSD/ETH+/RSR) pool. If the Reserve platform becomes successful with many RTokens governed by RSR, we believe this gauge may bring consistent volume and fees to Curve.