FAQ
Which collateral backs USR and RLP?
USR and RLP are at all times 100% backed by a combination of ETH and staked ETH, with a prevailing portion of collateral directly on-chain. A portion of ETH tokens is used to deploy into institutional crypto custodians as collateral for the hedging positions.
Protocol metrics are calibrated to achieve a situation that at all times USR is fully backed solely by on-chain ETH and stETH, while RLP fully absorbs exposure to centralized parties.
Does Resolv use CEXes for hedging? What about centralization risks?
Resolv operates on CEXes due to higher liquidity in the current market environment, with further diversification to DEXes. Centralization risks are handled by:
dynamic collateral management, which limits CEX exposure
off-exchange custody solutions
and, most importantly:
Protection Layer
How stable will the yield be?
Historical data shows that ETH delta neutral strategy yield is consistent. Median annual performance across multiple simulations is 8.4%, with 99% results lying in the range of 7 - 10% p.a.
Treasury profits are allocated to two instruments - staked USR and RLP. Most of the yield volatility is absorbed by the Protection Layer, while staked USR enjoys more stable yield.
More information on the yields can be found here:
What happens if there is not enough Protection Layer?
It is important to stress that Protection Layer is not a part of stablecoin backing, so even if it reaches zero, it means no loss of value of the stablecoin (still can be redeemed for USD 1.00 equivalent). Lack of Protection Layer means that exposure to centralized exchanges and yield volatility is not fully covered.
Protection Layer is a self-balancing mechanism - the thinner it is, the higher the yield it provides, attracting more liquidity.
When are you going live?
Resolv will launch publicly in Summer 2024, currently running gated beta.
Where can I learn more?
See litepaper for a deeper dive into Resolv architecture.
For more updates, follow Resolv Labs in X (Twitter) and Medium.
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