Bitcoin was created to give the average person a peer-to-peer economic system and asset store that could provide financial autonomy and access to banking services, especially for people living in places where financial services are rare or non-existent.
Over the past five years, several blockchain projects have been implemented to reflect the original mission of Bitcoin, and the growing popularity of stablecoins further highlights the need for alternative financial models. One project that is starting to gain momentum is Reserve Rights (RSR), a dual-token stablecoin platform consisting of an asset-backed Reserve Stablecoin (RSV) and an RSR token that helps keep the price of RSV stable through a system of arbitrage opportunities.
Data from Cryptooshala Markets Pro and trade view shows that while the price of RSR has been lowered along with the broader market over the past few months, the token has recently seen a surge in trading volume, suggesting a possible resurgence.
Three reasons for the increase in demand for the RSR token include the upcoming launch of the Reserve Rights mainnet, the pending token offering, and the ability of RSV to maintain its peg during the recent market volatility.
RSR mainnet launch
The biggest upcoming event for Reserve Rights that has the community excited is the mainnet launch in August.
After the launch of reserve rights on the Ethereum (ETH) mainnet, all protocol features will be enabled, including the ability for anyone to create stablecoins backed by baskets of ERC-20 tokens.
Along with full collateral, protocol stablecoins (RTokens) can be insured as a way to protect against collateral devaluation. RTokens can also generate income for their holders, which is an incentive for RSR holders to stake their RSR on a particular RToken.
The income of token holders comes from transaction fees, revenue sharing with collateral token issuers, and income from lending collateral tokens on-chain.
The launch of the RSR mainnet will also enable token staking. For most staking protocols that exist today, the main function is to lock tokens in a smart contract that prevents the holder from selling, but it does not really have any additional function for the ecosystem.
Once the full reservation protocol is launched on the main Ethereum network, Reserve Rights Holders (RSR) will be able to stake their tokens, thereby insuring and managing the network ⚖️
Let’s walk you through all the details of RSR staking in our latest article. https://t.co/hS8rojPo3z
— Reserve (@reserveprotocol) May 2, 2022
By contrast, betting on a fallback protocol has a practical use for the protocol, as giving RSR tokens to a particular RToken helps to insure that token against concomitant defaults. This means that if any of the collateral tokens defaults, the staked RSR can be confiscated in order for the RToken to retain its peg.
In exchange for this risk, the income from RToken is shared with RSR stakers to ensure sufficient insurance. The income offered by each RToken will depend on a variety of factors, including the market capitalization of the RToken, the income that the token generates, the percentage of income that is shared with RSR members, and the total amount of RSR.
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Growing community and successful stablecoin
The third factor driving RSR’s growth is the continued growth of its community and the ability of its RSV stablecoin to maintain its peg amid recent market volatility.
At the height of volatility in May, when TerraUSD Classic (USTC) collapsed, the lowest price of RSV was $0.9923. This means that RSV has held up better than most stablecoins on the market.
Along with RSV remaining anchored, the Reserve Rights community also recently surpassed 600,000 users on the Reserve app, which now provides access to over 18,000 merchants across Latin America who accept RSV and process over $100 million in monthly volume.
The team behind the protocol is also currently working on adding support for users in Mexico, which could potentially trigger the adoption of a new cohort of RSV users.
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Credit : cointelegraph.com