ABC Labs is proposing the formal deprecation of 17 dormant DTFs, and we want to be upfront about why.

Every DTF on this list requires active attention — governance alerts, role monitoring, infrastructure overhead — regardless of whether anyone is actually using it. ABC Labs is the one carrying the ongoing administrative cost of monitoring these products. Deprecating the products that aren’t going anywhere lets us focus that attention on the ones that are.

Our goal is to reduce the surface of what we need to actively monitor, without increasing risk to anyone holding these tokens.

If you currently hold any of these tokens: redemption remains live throughout this process, including RSR unstaking. You can exit for your pro-rata share of underlying assets at any time. This proposal doesn’t change that.

• Yield DTFs to be deprecated: dgnETH, hyUSD (mainnet), hyUSD (Base), MAAT, KNOX, USDC+, BSDX, VAYA, rgUSD
• Index DTFs to be deprecated: mvRWA, mvDEFI, AI, VTF, CLUB, MVDA25, SBR, ZINDEX

The case for formal deprecation comes down to three things:

1. Resource waste. Monitoring infrastructure like Hypernative costs real money and attention. Paying for it on 17 unused products is indefensible.
2. User confusion. Abandoned funds look identical to active ones in the Reserve app. That’s a bad (and misleading) experience.
3. Security risk. Unmonitored contracts still hold live governance roles, which amounts to unnecessary exposure with no upside.

The proposed action is to run deprecateFolio on each index (disabling issuance) and removing admin roles, then tag them as deprecated in the app. Redemption stays live throughout. Holders can exit for their pro-rata share of underlying assets at any time, nothing changes there.

The RFC is open for community feedback before it goes to a formal vote. If you hold any of the affected tokens or have a reason a specific DTF should stay active, we want to hear from you.

Read the full RFC →

Spring cleaning: A proposal to deprecate abandoned DTFs was originally published in Reserve on Medium, where people are continuing the conversation by highlighting and responding to this story.

Summary

A whitehat security researcher GregoAI (@therealgregoAI) / X recently uncovered a vulnerability in the backup auction infrastructure used by Reserve Yield Protocol DTFs. The bug affected the Gnosis EasyAuction contract — a third-party, non-upgradeable contract that the Reserve Yield Protocol used as a fallback trading mechanism, and that had not been used in over two years. If exploited under very specific edge circumstances, it could have permanently locked funds that were actively inside an auction, with no recovery path. However, an attacker would merely have been able to lock funds, not extract them, which made the incentive to attack low.

The relevant trading functions in affected DTFs have already been paused prior to making this announcement, so no meaningful funds are at risk, and the process to deprecate this fallback trading mechanism is underway. The bug was never exploited, merely uncovered by a whitehat security researcher, responsibly disclosed, and addressed. This is a report to share the info for community awareness.

How Reserve Protocol Auctions Worked

When a yield DTF needs to rebalance its collateral or process revenue, it opens a trade. There are two paths for this: Dutch Auctions (the default, recommended method) and Batch Auctions via the Gnosis EasyAuction contract.

Critically, the rebalance() function is public, and anyone can choose which auction type to use. This meant an attacker would have been able to force the protocol down the Batch Auction path at will.

The Bug

The vulnerability was a division-by-zero that could be triggered during auction settlement. Here was how it worked in plain terms:

1. Force the vulnerable path. An attacker calls rebalance() and specified Batch Auction mode, sending up to $1M (current maxTradeVolume on yield DTFs) of DTF into the EasyAuction contract.
2. Place a tiny bid. During the auction window, the attacker places a minimal bid — as little as a fraction of a cent. In order to realize the bug, the full lot on auction CANNOT be filled. If the full lot has been bid, then the bug can not surface in step 3. This means that if other auction participants fills the bid, no funds would be at risk — only remaining inventory that was not sold.
3. Poison the settlement state. After the auction ends, the attacker needs to call a public helper function called precalculateSellAmountSum(). This function was designed to pre-process bids to make settlement cheaper, but when called with carefully chosen parameters, it advances the auction's internal cursor to the very end of the bid list.
4. Settlement permanently reverted. When anyone then tries to settle the auction, the settlement logic picks up where the pre-calculation left off — but there are no more bids to process. Key variables remain at zero, and the code would hit a 0 ÷ 0 operation, which causes an irreversible revert.

Because the EasyAuction contract is non-upgradeable and had no admin rescue function, this is not a temporary freeze. If exploited, the funds would be permanently locked in a contract that could never release them.

What Would Have Been at Stake

The impact is twofold:

• Protocol collateral (up to $1M per auction) can be permanently frozen.
• All third-party bids placed during the auction would also be frozen, since bidders can only reclaim funds after settlement (which could never complete). In a well-attended (but unfilled) auction, this could have meant losses of nearly double the maxTradeVolume of $1M.

Beyond the immediate loss, the protocol’s internal trade counter would have been stuck, blocking all future trades until governance intervened through a multi-day process.

Why This Was Serious

Several factors compounded the severity:

• No access control: Anyone could trigger the vulnerable auction path.
• Low cost to attack: The attacker only needed a negligible bid amount.
• No recovery: The EasyAuction contract could not be upgraded or admin-rescued.
• Collateral damage: Innocent bidders would have lost their deposits too.
• Protocol disruption: All rebalancing would have halted until governance acted.

Why This Was Low Risk

There was no direct incentive to cause this bug to surface, since the funds ended up locked in the auction contract, not in the attacker’s possession.

Additionally, a critical requirement to realizing the bug was for the full lot on auction to not be filled. Batch auctions were priced in a way to incentivize bidders to make money, and bidding was fully permissionless. It is reasonable to assume that every auctioned lot would be filled.

Finally, dutch auctions are the main yield DTF auction method. Batch auctions have not been used in over 2 years. An attacker would have needed to front-run the launch of a dutch auction in order to launch a batch auction, and even then, ABC Labs could have participated in said batch auction, filling the lot and nullifying the attack.

Mitigation

While we considered the execution of this attack to be low risk, ABC Labs treated this bug with the utmost urgency and care.

1. Every yield DTF has a Trade Pauser role that could act in times of emergency. Because there were user funds at risk while batch auctions were still enabled, ABC Labs worked to ensure trading was paused across all active yield DTFs. As of this post, trading for over >99% of TVL in yield DTFs had been paused.
2. Governance proposals have been made to set the batchAuctionLength to 0, disabling the use of batch auctions in any form. stRSR governance takes 8 days to complete, so in just over 1 week batch auctions will be disabled, and trading will be unpaused.

NOTE: Pausing trading did not affect any other DTF functionality. Minting & redeeming are still enabled. stRSR is unable to be unstaked or withdrawn while trading is paused.

Conclusion

A bug was recently found in a 3rd party contract used by Yield DTFs. It was never exploited, the risk has been mitigated, and funds are safe.

We appreciate the hard work of the whitehat GregoAI (@therealgregoAI) / X for submitting their bug report to our Immunefi bug bounty program.

We encourage stRSR holders of any yield DTF to go vote on the pending proposals to disable batch auctions.

Deprecating Yield DTF Batch Auctions: EasyAuction.sol Division-by-Zero was originally published in Reserve on Medium, where people are continuing the conversation by highlighting and responding to this story.

At Monetarium, our Dialogs series brings together influential thinkers to explore pressing monetary challenges. In July 2025, we hosted PayPal co-founder and Palantir chairman Peter Thiel for an intimate Washington D.C. discussion on “The Debt, the Dollar, and Our Options From Here” with 50 subject matter experts, including Confusion Capital’s Lead Macroeconomics Research Economist, Dr. Gina Pieters.

In this exchange, Dr. Pieters raises a provocative question: could the dollar maintain reserve currency status through its role as a “global unit of account” even after America loses military superpower status? She suggests this financial dominance could allow U.S. debt to continue in a “weird zombie way” because countries would still need dollars to price goods globally. This disentanglement of financial power from military power represents a “new aspect in this world.”

Thiel responds by focusing on the concrete example of oil pricing in dollars — the petrodollar system. Is this “just a unit of account” where Saudi Arabia could theoretically convert dollars immediately after each sale, or is it “unbelievably profound geopolitically”? He points to the stark example of Saddam Hussein, who switched to pricing Iraqi oil in Euros about a year before the U.S. invasion. The message was clear: the U.S. Dollar and the U.S. military are connected at a foundational level. While Thiel admits uncertainty about separating these dimensions, his intuition leans toward the dollar’s dominance being “linked to all these weird forms of American exceptionalism rather than just a silly accounting convention.”

Monetarium Dialogs is an ongoing series that furthers Reserve’s mission to combat inflation by providing access to better financial products and fostering critical conversations about the future of money. Through intimate gatherings with leading thinkers, we explore the monetary challenges and opportunities that will shape tomorrow’s financial landscape.

This meeting was conducted under Chatham House Rules, and this clip was published with the permission of those quoted in order to provide a small window into the nature of the dialog.

To find out about future Moneterium Dialog events, subscribe here.

About Reserve

Telegram | Discord | 𝕏 (Twitter) | Farcaster | YouTube | Instagram | TikTok | Reserve.org

Peter Thiel on the Dollar’s Global Dominance was originally published in Reserve on Medium, where people are continuing the conversation by highlighting and responding to this story.

As the Reserve community continues to grow, we’re making it easier to understand where to go for what. From now on, our Discord and Telegram channels will each serve a clear purpose. Whether you’re just discovering Reserve or already deep in the ecosystem, this guide will help you know where to plug in.

TL;DR:

• Use Telegram for real-time conversation, community engagement, and open access.
• Use Discord for verified holder discussions, governance, and curated updates.

This update reflects what is already happening. Most day-to-day conversation takes place on Telegram, while more focused and in-depth discussions happen on Discord. We are embracing that behavior and building around it.

What Telegram Is For

Telegram is now the main hub for open conversation about Reserve. It is fast, easy to join, and fits the style of crypto-native communities. Whether you are a new user, a casual holder, or someone curious about Decentralized Token Folios (DTFs), Telegram is where you will find active discussion.

Expect real-time chats about protocol updates, ecosystem moves, and market narratives. Telegram will also be where most onboarding and casual feedback takes place. It is open to everyone, requires no wallet connection, and will be actively supported by the team and community moderators.

What Discord Is For

Discord has been restructured into a focused space for serious participants. It is now the home for RSR holders, governance contributors, and those more deeply involved in the protocol. To improve signal quality, we have removed unused channels and simplified the layout.

The general and governance channels are now token-gated, requiring at least 100 RSR to access. Verification is handled through Guild. This small threshold helps keep spam and low-effort content out, while giving active participants the space to contribute meaningfully.

Inside Discord, you will find official announcements, key links, and governance discussions. If you are involved in protocol decisions or want to track the evolution of RTokens and DTFs closely, this is where to be. It is structured, calm, and focused on long-term engagement.

Why We Are Doing This

This update is about clarity and purpose. Telegram gives us reach, energy, and a wide entry point for new users. Discord offers focus, structure, and a space for high-context conversation.

By clearly separating the roles of each channel, we reduce noise and help everyone get more value from both platforms. Telegram keeps the door open for broad engagement. Discord creates space for governance and contribution.

This is not about dividing the community. It is about helping each part of the community thrive in the environment that best suits it.

Use Telegram if you want to hang out, ask questions, share ideas, or stay in the loop through casual conversation. Use Discord if you are holding RSR, participating in governance, or looking for structured updates and discussions.

Both channels are live, active, and important. Choose the space that matches how you want to engage. We’ll see you there.

About Reserve

Telegram | Discord | 𝕏 (Twitter) | Farcaster | YouTube | Instagram | TikTok | Reserve.org

Community Update: Where To Talk Reserve was originally published in Reserve on Medium, where people are continuing the conversation by highlighting and responding to this story.

At Monetarium, our Dialogs series brings together influential thinkers to explore pressing monetary challenges. In July 2025, we hosted PayPal co-founder and Palantir chairman Peter Thiel for an intimate Washington D.C. discussion on “The Debt, the Dollar, and Our Options From Here” with 50 subject matter experts.

In this exclusive clip, Thiel uses his classic PayPal pitch prop — a $100 bill — to explore what gives money its value. The bill states it’s “legal tender for all debts, public and private,” and Thiel reveals the violence implicit in this seemingly simple phrase. You must use dollars to pay taxes; if you don’t pay, “some people will come after you and if you resist them, they’ll come with guns and they’ll put you in jail.” This coercive backing, protected by military superpower status, is what makes the dollar “the best currency in the world” to foreign creditors.

Thiel identifies a fundamental contradiction at the heart of America’s debt crisis: Americans believe “we’re never gonna pay [the debt] off” and we’ll just “keep borrowing more forever,” while foreigners expect to get repaid in valuable dollars backed by military might. These conflicting expectations cannot both be true. The unspoken question becomes whether military power will ultimately protect the Federal Reserve’s ability to print money — or whether foreign creditors might have the military force to eventually demand “real money” instead of printed dollars. As Thiel notes, this critical tension “is never really articulated” in public discourse.

Monetarium Dialogs is an ongoing series that furthers Reserve’s mission to combat inflation by providing access to better financial products and fostering critical conversations about the future of money. Through intimate gatherings with leading thinkers, we explore the monetary challenges and opportunities that will shape tomorrow’s financial landscape.

This meeting was conducted under Chatham House Rules, and this clip was published with the permission of those quoted in order to provide a small window into the nature of the dialog.

To find out about future Moneterium Dialog events, subscribe here.

About Reserve

Telegram | Discord | 𝕏 (Twitter) | Farcaster | YouTube | Instagram | TikTok | Reserve.org

Peter Thiel on America’s Unspoken Debt Crisis was originally published in Reserve on Medium, where people are continuing the conversation by highlighting and responding to this story.

From index mutual funds in the 1970s to ETFs in the 1990s, traditional finance has spent decades refining diversified baskets. Each evolution lowered costs, tightened tracking error, and expanded market access. But both models were ultimately built for — and constrained by — legacy market rails.

Today, index funds are a $20 trillion‑plus market, broadening access to diversified investing and fueling decades of growth in passive asset management. Yet every share still moves through a gauntlet of custodians, brokers, and clearing houses, embroiling investors in a web of settlement lags, hidden fees, and opaque counterparty risk.

Enter Decentralized Token Folios (DTFs). DTFs take the simplicity and accessibility of index investing to new levels with modern blockchain tech: placing the basket directly in smart contracts, enabling permissionless 24/7 trading, and replacing Wall Street middle‑men with decentralized onchain governance.

Where mutual funds relied on end‑of‑day NAVs and ETFs added market‑hour liquidity, DTFs deliver real‑time transparency, instant mint‑and‑redeem, and programmable governance and fee flows that anyone can verify on the blockchain. Below, we unpack how DTFs stack up against their TradFi predecessors and how they change what’s possible for diversified investing.

Core advantages of DTFs

DTFs offer the familiar benefits of ETF investing, but with a new degree of openness, accessibility, and innovation through their blockchain-native design. This lets DTFs surpass older index vehicles in three key areas: investibility, accessibility, and flexibility.

Let’s take a closer look at DTFs’ advantages on each dimension:

1. Investibility

• Easy diversification & strategic exposure: From broad-market exposure to targeted narratives, all in a single click
• Fair pricing without middle-men: Dutch auctions & solver networks (CoW Swap) provide deep liquidity without centralized intermediaries
• Fully on‑chain mechanics: Transparent execution & less tracking error

2. Accessibility

• No gatekeepers: No minimum investment, no privileged entities
• Instant mint & redeem: No settlement windows or NAV timing games
• Direct DeFi integration: Tap into deep liquidity for tight spreads and minimal slippage
• Live holdings reporting: Trace any asset or rebalance event in real time
• 24/7 trading: Trade any time on decentralized exchanges

3. Flexibility

• Composability: DTFs can include any token, including AMM LP tokens, tokenized real-world assets, or lending positions
• Permissionless creation: Anyone can launch a new DTF — no custodians or authorized participants required
• Customizable governance: Choose Reserve Rights (RSR), another token, or even NFT‑based voting to steer fees, weights, and rebalancing rules

Why DTFs matter for markets today

DTFs aren’t just a technical upgrade — they reshape how access, innovation, and value creation work in a fully onchain environment. Today, that shift is already changing what’s possible:

1. Less friction, more transparency — Real‑time data and smart‑contract enforcement remove guesswork and settlement risk.
2. Faster access to emerging themes — With permissionless deployment, DTFs can be spun up instantly to track fast-moving narratives for timely, targeted exposure.
3. Global 24/7 liquidity — No need to wait for New York’s opening bell; liquidity follows demand around the clock.
4. Programmable value flows — Creators can route fees to RSR burns, delegate treasury growth, or share revenue directly with holders.
5. Community‑driven innovation — Permissionless launch pads mean the next great thematic index can come from a DAO, not a Wall Street giant.

Join the onchain index revolution

Diversified investing shouldn’t be gated by market hours, minimum balances, or opaque intermediaries. DTFs bring index investing onto open blockchain rails — adding speed, flexibility, and decentralized governance to the playbook. By unlocking instant, permissionless access, DTFs make markets faster, fairer, and open to all.

Ready to join the onchain index revolution?

• Explore live DTFs on app.reserve.org
• Watch our video explainer, What is a DTF?
• Deep dive into the advantages of DTFs at reserve.org/dtf/

Head to app.reserve.org to mint, trade, or govern your first DTF today.

About Reserve

Reserve’s ​​mission is to fight inflation and expand access to better financial products by providing a permissionless platform for anyone to create, own, and govern DTFs (Decentralized Token Folios). DTFs are indexes like ETFs, but in crypto. Because they harness blockchain and smart contract technology, DTFs are always backed 1:1, and allow 24/7 minting and redeeming onchain by users without the need for middlemen.

Discord | 𝕏 (Twitter) | Farcaster | YouTube | Instagram | TikTok | Reserve.org

DTFs vs. ETFs: The onchain index advantage was originally published in Reserve on Medium, where people are continuing the conversation by highlighting and responding to this story.

With the launch of Index DTFs, Reserve now offers a new, powerful way to participate in the ecosystem — vote-locking governance tokens, including Reserve Rights (RSR).

Vote-locking lets token holders steer index operations and, in the process, creates new value streams for vote-lockers & RSR.

Here, we’ll walk through what vote-locking looks like, how it diverges from staking, and why it matters for RSR holders.

What is vote-locking?

Vote-locking commits tokens to a specific Index DTF to gain voting power over how that DTF operates. To prevent abuse, tokens can only be unlocked after a delay, usually one week after initiating withdrawal.

Through token-weighted voting, lockers can weigh in on decisions like:

• Which tokens the index includes
• How tokens are weighted and/or rebalanced
• Which fees are charged
• Who can propose and/or veto changes

By vote-locking, anyone can gain direct influence over these choices — and potentially earn a share of the fees the Index DTF generates.

What tokens can be vote-locked?

Index DTFs can be governed by any token. Often that token is RSR, but it can be any token chosen by the DTF’s creator: an existing governance token, a new token created for the DTF, or any other compliant token on the blockchain.

Regardless of the choice, each Index DTF pays a platform fee that is automatically used to buy and burn RSR. So, no matter what token is used, Index DTF activity still adds fuels to the RSR fire.

Staking vs. vote-locking

With the launch of vote-locking, the Reserve ecosystem now supports two complementary governance models tailored to each type of DTF.

For Yield DTFs, RSR staking earns yield in exchange for governance and security. Stakers pledge RSR as emergency first-loss capital while managing a DTF’s configuration and collateral. Learn how to stake RSR here.

For Index DTFs, vote‑locking grants voting power and, when enabled, a share of minting and TVL‑based fees. Index DTFs are not overcollateralized, so vote‑locking serves purely as a governance commitment.

How to vote-lock

Locking takes seconds on Reserve app page: just select the Index DTF you want to support, scroll to Basket Governance, and hit the Lock button.

For a click-by-click walk-through, watch the video below and vote‑lock with confidence.

Time to lock in

Whether you’re already staking RSR or just exploring the protocol, vote-locking gives you a direct voice in the future of decentralized index design. It’s an opportunity to back the strategies you believe in — and to help shape the way onchain portfolios evolve.

Ready to lock in?

• Visit any Index DTF’s page on app.reserve.org
• Scroll down to Basket Governance to vote-lock tokens
• Check the Governance tab to explore proposals

If you have any questions along the way, drop into the Reserve protocol Discord server — there’s always someone around to help!

About Reserve

Reserve’s ​​mission is to fight inflation and expand access to better financial products by providing a permissionless platform for anyone to create, own, and govern DTFs (Decentralized Token Folios). DTFs are indexes like ETFs, but in crypto. Because they harness blockchain and smart contract technology, DTFs are always backed 1:1, and allow 24/7 minting and redeeming onchain by users without the need for middlemen.

Discord | 𝕏 (Twitter) | Farcaster | YouTube | Instagram | TikTok | Reserve.org

Vote Locking on Reserve was originally published in Reserve on Medium, where people are continuing the conversation by highlighting and responding to this story.

ABC Labs is busy building the Reserve Index Protocol, a new piece of software that will unlock the next phase of Reserve’s evolution toward supporting asset-backed currency.

The Ethereum and Base version of the Index Protocol is already undergoing its first of three code audits. The Solana version is currently scheduled to undergo its first audit in January.

The front end interface for this new protocol (including the “zaps” needed to facilitate minting and redeeming) will probably take the longest to finish before public launch. There’s still a lot more code to write for these.

When will it launch?

The Reserve Index Protocol will live side-by-side with the Reserve Yield Protocol, which is the new name for the software that powers ETH+, USD3, and all the other RTokens live today.

This release positions Reserve to become the decentralized version of BlackRock — the platform on which thousands of index DTFs can be built by anyone, for anyone.

An “index DTF” is like an index ETF, e.g. the S&P 500 ETF, but in DeFi.

The Reserve Index Protocol lets you bundle together 100+ assets at a time (exact number varies by blockchain), with no need for any oracle price feeds or collateral adapter contracts. This difference is key, as it makes it very easy to create new index DTFs with any token you wish in the basket.

The Index Protocol also adds a powerful new incentive mechanism: creators are given more control over how Index RToken fees are divided up, allowing them to form teams, raise capital, offer liquidity incentives, and so on. I think it’s possible to attract everyone from individual young entrepreneurs up to the largest financial institutions in the world to create and govern DTFs on Reserve technology, and the Index Protocol was designed with this goal in mind.

To ensure that RSR holders are rewarded and incentivized to participate in key ways, Index RTokens collect a platform fee that goes to RSR holders in the form of an RSR burn. (RSR holders ultimately have shared control over this stream of capital; more details below.)

The first half of this post covers the strategy and background for this new phase, and the second half walks through how the new Reserve Index Protocol differs from the current Reserve Yield Protocol.

If you’re more of an auditory person, here’s the community call where I talk through all of the content of this post and answer some questions:

https://www.loom.com/share/2c5fcfa741ff44c7a91fb2b34240f09c

Why asset-backed currency

The Reserve project is based on the premise that access to stable currency should be a human right. Fundamentally, when you do something valuable for society, we believe society should do something of equal value for you in return. That’s not what you get when you save money in an inflationary currency — if your money loses 10% of its value, you’re getting 10% less value back than what you provided to others. And in places like Venezuela where currency has inflated much faster, that effect can be extreme.

In Venezuela we didn’t waste time trying to improve upon the dollar, we offered a USD stablecoin wallet, since it was clear that the dollar was a much better option than the Bolivar at that time. We served about 600k users and 26k merchants who collectively made $5.7 billion in stablecoin transactions on the platform, receiving a special license from the US Department of the Treasury’s Office of Foreign Asset Control covering our operations in Venezuela before having to shut the service down in the face of local regulatory challenges and pressures from Operation Chokepoint 2.0 in the US.

But in the century-long big picture, the US dollar may not always be the answer. The US experienced first-hand the inflationary impacts of monetary policy in recent years, with a peak of 8% annual inflation in 2022, according to BLS.

If the US dollar were to massively devalue (as some think it eventually will), the world could switch to the Euro, Bitcoin, or gold. The Euro has all the same systemic challenges of any large fiat currency, so we might not want it in a world where the dollar has just failed. Bitcoin’s fixed supply means it would have ever-increasing purchasing power in a growing economy, and we’ve seen that it remains highly volatile as it grows in adoption. Gold is perhaps the best option, as its supply can grow in response to growing monetary demand — more gets mined or converted from jewelry when gold value goes up — offering surprisingly stable purchasing power over time.

If you ask open-minded alt monetary economists which of these options is best, they somewhat favor gold, but the final answer you often get is: “let them compete and let the market decide.”

Well the way I see it, when it comes to storing value, the market has already decided. We pretty much all want a diversified portfolio — equities, bonds, real estate, gold, and crypto. You can see this preference in the extreme popularity of index investment products within TradFi.

Reserve’s mission is to fight inflation and expand access to stable currency.

We suspect the solution is asset-backed currency — a diversified portfolio of the world’s assets represented in a single token, so you can store value without inflation over any timespan and transact freely with anyone on the planet.

If we had asset-backed currency alongside bitcoin, gold, and other fiat monies, I believe the market would choose asset-backed currency as its reserve asset if the worst were to happen and the US dollar were to collapse.

Why do I believe this? Well, based on what we already select in order to preserve individual wealth, in some sense the choice has already been made.

How to create asset-backed currency

A central question in creating asset-backed currency is: which assets should back it?

How about we let the market decide. Give everyone access to every combination of assets they might want, and see which combinations bubble to the top.

This experiment has been underway for decades already. In the US, the S&P 500 ETF is the most popular ETF, so we know that people like a broad market index. It performs really well over time, which reinforces its dominance.

But what if we opened up index creation so that anyone in the world could create a new index product, including any financial asset in the world in their index, and then anyone else in the world could put their money into that index if they so chose?

What if each index was a freely transferable token that could be used to settle transactions worldwide in a few seconds?

The market may land on a different choice than the S&P 500 if you give people the ability to use each index in a money-like way and allow indices that span across all borders and asset classes.

And that’s exactly what we are working to do.

The decentralized version of BlackRock

At Monetarium 1 this July I pitched the Reserve ecosystem on a strategy:

1. Build Reserve into the decentralized version of BlackRock — make it the largest index platform in crypto, and eventually the largest in all of finance
2. Let the process of competitive evolution generate the best diversified stores of value
3. Socialize the idea of asset-backed currency more and more as assets on the Reserve platform grow in value over time, so that if the US dollar ever does fall apart, the world is well aware of this option

In the decentralized version of BlackRock, instead of one company creating tons of the biggest index products, an open platform allows thousands of people and companies to create them. In fact, ABC Labs, which writes software to make this possible, has never created an index product itself, and does not intend to.

Note that even if Reserve tokens only become popular index products and are never used as money, ecosystem participants still stand to benefit, so this strategy does not incentivize RSR holders to fight against the US dollar. That’s important to me because the idea here is to build a backstop in case the world needs it, not to do anything that would weaken the current system.

This strategy received full support from everyone who has commented on it, so we all seem to be going full-force ahead. Let’s do it!

DTFs

“DTFs” are like ETFs but in DeFi.

Decentralized token folios.

Like an ETF, each unit is redeemable 1:1 for the basket of underlying assets. The difference is that instead of going to an investment company for redemption, you go to a smart contract, and instead of only market makers being allowed to redeem, anyone can. Since all of the underlying tokens in a DTF are held in a smart contract, no company is in custody, only code. (Some tokenized RWAs still are held by a company that issues the token.)

Another big difference between ETFs and DTFs is that DTFs can have decentralized governance, or no governance at all.

With an ETF, the issuer is the investment company that manages the assets.

With a DTF, you can be the issuer, since anyone can mint or redeem just by interacting with the smart contract, and you can be a governor, since in most decentralized governance approaches anyone can buy governance tokens and participate in guiding the asset selection.

Existing RTokens are DTFs. There are many other projects offering or working on offering DTFs as well. The biggest so far has been the DeFi Pulse Index, which reached a market cap of $236M during the last market cycle, according to CoinGecko.

At this point in time, Reserve is the largest DTF platform by TVL.

ETFs are huge in TradFi. As DeFi grows, I expect that DTFs will be huge as well. This is of course speculation as it hasn’t happened yet, but I don’t see why the same reasons for ETF popularity will not apply.

The initial wedge

For DTF investing to get big, I suspect there will need to be one type of DTF that really takes off and leads the way. So which type might that be?

It may be similar to TradFi — a broad market index, like Coinbase’s COIN50 or CoinDesk’s CD20, implemented onchain for people to buy and hold.

It may be a thematic index, which have also taken off in TradFi.

Maybe it’s baskets of memecoins.

Maybe it’s sector indices — AI, DeFi, DePIN, DeSci, GameFi, etc.

Maybe it’s more complex DeFi positions that generate yield along with their diversification.

An additional Reserve protocol

In order to serve this use case, we’re launching a new protocol.

Going forward, there will no longer be just one Reserve protocol, there will be two:

• The Reserve Yield Protocol (which exists today)
• The Reserve Index Protocol (launching soon)

These two protocols both allow for the permissionless creation of DTFs, but they have different strengths and weaknesses, since they are built for different purposes.

We’re purpose-building the Reserve Index Protocol for what we think is the next phase of DTFs in crypto: volatile index baskets that can include everything from Bitcoin to memecoins you deployed an hour ago.

The Reserve Index Protocol does not replace the Reserve Yield protocol.

Think of them like two models of car produced by one car brand. A pickup truck is good for hauling and a sports car is good for tight turns; the car brand offers them year after year to different market segments

The two protocol models will co-exist to support index DTFs and yield DTFs. For example, USD3 and ETH+ are both yield DTFs that will continue to run on the Reserve Yield Protocol.

The Index Protocol will be deployed on Base and Ethereum first, with a Solana implementation soon after. It may be deployed elsewhere in the future.

The differences between the two protocols are explained below!

An update on terminology

We have a lot of new terminology in play to make all of this clear and easy to talk about. We’re changing the language within Reserve as well as overall in the industry.

Main definitions:

• DTF — Decentralized Token Folio — any token that is redeemable 1:1 for a basket of other tokens, regardless of which protocol or project created it. Not specific to Reserve. “Like an ETF but in DeFi.”
• Yield DTF — a DTF that is designed to capture yield, e.g. ETH+ or USD3. Not specific to Reserve; e.g. “USD+” from Overnight Finance is also a yield DTF.
• Index DTF — a DTF that is designed for broad, diversified token exposure. The DeFi Pulse Index (DPI) from Index Coop + Set Protocol was the most successful index DTF last cycle, for example.
• Reserve — when referring generically to the technology behind Reserve, you can just say “Reserve.” For example, “that DTF runs on Reserve.” It no longer makes sense to say the Reserve protocol, as there is not only one.

Technical term definitions:

• Reserve Yield Protocol — the existing protocol that ETH+, USD3, and other existing RTokens run on.
• Reserve Index Protocol — the new protocol model we are introducing in this blog post and launching soon.
• Yield RToken — a yield DTF built on the Reserve Yield Protocol. This is a bit of a technical term that may not get used all that much; within the main Reserve interface I expect they’ll just be called “yield DTFs.”
• Index RToken — an index DTF built on Reserve. This is a bit of a technical term that may not get used all that much; within the main Reserve interface I expect they’ll just be called “index DTFs.”

How the Reserve Index Protocol differs from the Reserve Yield Protocol

Note: this description is for Reserve project members who are already familiar with the current Reserve protocol. When the Index Protocol is released, it will be accompanied by documentation for folks who know nothing about Reserve.

In a nutshell, the Reserve Index Protocol:

1. lets you bundle together any tokens, with no need for collateral plugins specifically written for each token in the basket
2. allows for very large baskets of tokens (50+ on Ethereum, and about 100+ on Base)
3. distributes one portion of the fee income to governance token holders and the other portion of the fee income to RSR holders, via burning RSR or RSR LP tokens (and in the future, may distribute a portion to an RSR-governed DAO treasury, should RSR holders choose)
4. charges fees to RToken holders as a percentage of TVL of the RToken instead of a percentage of yield generated on the collateral
5. lets you use any token for decentralized governance, including but not limited to RSR; you can govern with RSR, create a brand new governance token, or bring an existing token and give it governance rights — read below for the motivations behind this incentive design
6. does not include RSR overcollateralization

You can start to get an idea of the differences in this simple diagram:

Let’s walk through these design choices one by one in detail.

1. Adding a platform fee which goes to burning RSR

Of the fees charged to holders of Index RTokens, a portion is taken off the top by the protocol itself and goes to burning RSR.

Yes, we are bringing back the RSR burn 🔥🔥🔥

A platform fee schedule will be released at launch.

RSR holders will ultimately have control of where the platform fee revenue goes. The main options are:

• Direct burn: 100% of fees go to RSR burn
• LP burn: fees are converted to DEX liquidity tokens for RSR, which are burned — the reasons to potentially prefer burning LP tokens instead of RSR directly are nuanced and this warrants community discussion to decide what we prefer
• RSR treasury: fees are stored in a treasury controlled by RSR holders

As you digest the design choices below, you’ll see why we reached this conclusion. A platform fee guarantees that RSR holders would benefit from Index RToken growth and usage, should that occur. I’ll cover the governance roles RSR holders are expected to play below.

2. Allowing Index RToken creators to use any token to govern an Index RToken

Yield RTokens have so far all been governed by staked RSR.

(Technically speaking, a Yield RToken’s governor can be any smart contract you specify, so someone could create one that was governed by some other token, but so far nobody has been enterprising enough to do that. It would require technical sophistication.)

Index RTokens, by contrast, will make it easy for their creators to select any token they want, including a brand new token they’ve just created, as the governance token.

An Index RToken’s governance token will be able to charge a governance fee to RToken holders, so the bigger the RToken gets, the more revenue the governance token will generate.

The reason to allow this, in short, is to create an extremely powerful incentive to attract all the best DTF creators and distributors in the next decade to build on Reserve.

Imagine for a minute that Ethereum required that every app built on top of it could only use Ether as its governance token, and that all value from each app would thus have to accrue to ETH.

On one hand, if all apps on Ethereum suddenly paid out all their value to ETH, that would make ETH even more valuable than it is today.

On the other hand, if it had worked this way from the start, way fewer teams would have ever built apps. Only existing large ETH holders would have had the incentive to do so. It would have been extremely difficult to raise new capital and incentivize new teams to build new projects.

I think if Ethereum had worked that way it would have quickly been eclipsed by competitors that allowed builders to make their own tokens.

I believe this same logic will apply to the universe of DTFs.

Imagine this: you have a great idea for a new DTF. You can create it pretty much for free, and when you do, you mint a brand new governance token along with it. That governance token is yours to hand out to team members, partners, or investors in order to supercharge the launch of your DTF. You can stream it to DTF users as an incentive to get early users, or offer it to AMM liquidity providers to bootstrap liquidity for your DTF. And over time, your DTF develops a committed group of governance token holders who have an affinity for that particular DTF. They want more people to use that DTF, because the bigger it gets, the more valuable their governance token is. So what do they do? They do what every crypto community does: they shill! They talk not only about their own governance token and why it’s great, but about the DTF it’s connected to, and why that’s great. Now you have crypto’s decentralized marketing machine working for your DTF. And it may not even really be your DTF by this point. Maybe you created it on a lazy summer afternoon and put some energy in for a few months, then decided to sell your portion of the gov token and move on. It doesn’t need you — it has a whole thriving base of gov token holders who are incentivized to make it great and grow it.

Or imagine this: TradFiGiant, Inc. decides they want to get into the DTF game. They assign a team to study all the existing tech and conduct a “build or buy” analysis, to determine whether to make their own competing protocol or build on top of existing tech stacks. The team looks at Reserve first since it’s the biggest DTF protocol (true today, and hopefully indefinitely!). They see that they can create DTFs on Reserve and retain a good share of the fees for themselves via holding their own governance token. They work out a plan to launch TradFiGiant Token (TFGT) and use it as the gov token for all the DTFs they deploy on Reserve. They are happy to build on the industry leading tech stack instead of creating something from scratch, and the Reserve ecosystem is happy to host them and collect the platform fee as their DTFs grow. The more TradFiGiant markets their DTFs to their existing customer base, the more platform fees RSR holders get to direct, as described in section 1.

So you can see: in this vision, RSR remains the central asset in the Reserve ecosystem, just like ETH is the central asset in the Ethereum ecosystem. And by letting Index DTF creators bring their own tokens to the table, we invite WAY MORE people and companies to build on Reserve, just as Ethereum did from the start.

There are TONS of possibilities here.

• Existing memecoin communities can use their memecoin to govern DTFs.
• Existing DeFi projects can use their governance token to govern DTFs.
• Accelerators can form to incubate DTFs in exchange for 7% of their governance token.
• Every DTF with a brand new gov token can choose whether to have a bonding curve, a dutch auction, an airdrop, farming rewards, a private round, vesting schedules, etc.

Just as the giant mess of projects deployed on Ethereum have brought us some great tokens and some crappy ones, not every DTF gov token on Reserve will be something you’ll want to hold. But, in my vision of it, some really will be.

The obvious tradeoff is that any fees that go to some other governance token are not going to RSR holders. But I’m betting that gives us RSR holders a smaller slice of a much larger pie.

The near-term goal is, after all, to become the decentralized version of BlackRock. To be far and away the number 1 DTF platform. To be the Ethereum of DTFs.

Note that it is uncertain whether this will come to pass. We can design the software to create incentives, but many broad market forces have a lot of influence over the eventual outcome. As an ecosystem participant, you are the one with the power to create and participate in great DTFs and impact how this all turns out!

3. RSR’s role in governing within the Reserve ecosystem

RSR has three governance roles to play in the Reserve ecosystem:

1. Continuing to overcollateralize and govern Yield RTokens
2. Governing Index RTokens deployed by RSR holders
3. Meta-level governance within the Reserve ecosystem

Let’s break these down one at a time.

1. RSR will still be used to overcollateralize and govern Yield RTokens. This is pretty straightforward — nothing’s changing with the Yield Protocol, so as long as Yield RTokens in their current form keep seeing demand, RSR holders will continue to stake on them, govern, and earn staking rewards.

2. Like any other token, RSR can be used to govern any Index RToken. For existing RSR holders, deploying new DTFs with RSR as the governance token is a way to bring even more value to RSR. Such DTFs will benefit from an engaged and savvy community of governors, and may naturally receive the most support from people and companies that hold a lot of RSR. So we may see many Index RTokens deployed with RSR as the governance token. It’s worth noting that even Index RTokens that are not governed by RSR still generate platform fees that go to burning RSR or other uses as elected by RSR holders.

3. Although this plan is still in the discussion stage (publicly and within ABC Labs), there is an intention in the ecosystem to create a meta-level RSR DAO. Key likely responsibilities of this meta-level DAO include: directing protocol fees to burning RSR or other uses, governing which smart contracts existing RToken governors are allowed to update to (for greater system-wide security), governing the use of RSR emissions, and governing platform fees that are charged to Index RTokens.

I started by covering the design choices that most directly interface with RSR holders since RSR holders will read this article most closely. But let’s now turn to some of the choices that will be most relevant to making Index DTFs on Reserve a great product for users!

4. Allowing any token with no collateral adapter needed

For Yield RTokens, the protocol needs to know the price of each collateral asset at any point in time, because it needs to be able to tell when collateral has appreciated or defaulted.

Say you have an RToken with cUSDT (USDT lent out on Compound) as backing. The protocol has to be able to tell that the cUSDT gained in value via the yield that’s accruing to that position in order to calculate how to distribute the value of that underlying yield.

Similarly, if USDT were to de-peg, the protocol has to know this somehow in order to respond by trading out into other collateral and auctioning the right amount of staked RSR to make up the difference.

Requiring pricing info means that each collateral asset must have an oracle price feed. But oracles cost money to maintain and only exist for a small minority of tokens out there, given how quickly new tokens are being created these days.

Requiring a price oracle, in a world with different oracle providers, means that each collateral asset requires a collateral plugin smart contract that defines its oracle price feed so the protocol can understand it. This means a nontechnical person can’t add a new collateral asset to an RToken until a dev has taken the time to write this (simple, but still technical) new contract.

This means that the Reserve Yield Protocol has a more limited universe of potential collateral tokens. That’s fine for its main purpose, but when building index DTFs in DeFi it’s much better if creators and governors can easily add any token out there to the basket.

Thus, in order to allow any token to be easily usable as collateral, the Reserve Index Protocol was designed to operate without needing to know any prices of any collateral assets.

This choice is the central defining premise of the Index Protocol, around which all other design choices were made.

The Index Protocol initially will be deployed on Ethereum, Base, and Solana. You’ll be able to bundle tokens within each blockchain. That can include tokens that are bridged from other blockchains, but Reserve will not have any additional bridging capability to offer.

Now let’s explore some of the resulting features that follow from this premise:

5. Removing RSR staking and overcollateralization

Without pricing info on collateral assets, it’s not possible for the protocol to detect defaults, since those are defined in terms of price deviations.

However, for the near-term index DTF use case, we’re betting that overcollateralization is less important, for two reasons:

Reason 1: many of the collateral assets included in an index DTF in today’s market will be native tokens, which have no risk of default. Take for example a memecoin you just created — it’s just a token, not pegged to anything else, so one token is always one token, period. Its price does not relate to or depend on any other asset, so there is no way for it to “de-peg.”

Reason 2: prospective index DTF users say in product interviews that they are fine taking the risk of bridged or wrapped assets.

The main tokens in index DTFs that could de-peg are bridged or wrapped assets, e.g. WBTC or bridged Bonk on Base. People told us they didn’t mind the “bridge risk” for the convenience of being able to hold a DTF that bundled many assets across chains.

And this makes sense. In the case of a yield DTF like USD3 or ETH+, the whole point is to hold a token that is “up only” with respect to its reference asset (in this case USD or ETH). Any case of loss relative to that asset would be really painful. And as we saw with the USDC de-peg early on in the life of eUSD, the default response mechanism worked really well!

For index DTFs, users are more interested in overall gains, irrespective of any specific reference asset. So the low risk that a wrapped collateral asset may de-peg at some point in the case of a bridge hack seems like a low-priority issue.

This choice means that there is no need for RSR to be staked on Index RTokens.

(In principle, an Index RToken could implement overcollateralization for the more established collateral assets that have oracle price feeds and are bridged or wrapped, such as WBTC. So if there is demand for this feature, a future version could bring the best of both worlds. However, it would have added a lot of code complexity and taken a lot longer to build, so didn’t seem like the right tradeoff to include at this point.)

6. Charging governance fees as a percentage of TVL

Like most index ETFs, it makes sense for index DTFs to charge a fee to users as a percentage of holdings.

If you hold $100 in an Index RToken and it charges holders an annual 1% fee, you will pay $1 per year in fees.

If it appreciated 20% in that year, your $100 would have turned into $120, and $1.20 would be deducted, leaving you with $118.80. (Technically it would happen continuously and the math would be ever so slightly different, but you get the idea.)

In contrast, Yield RTokens charge fees as a percentage of yield generated. This makes sense, given that their main value prop is yield.

For reference, TradFi fees, also called “expense ratios”, vary a lot according to research conducted by the Investment Company Institute (ICI):

Governance fees can vary depending on the DTF. A large-cap crypto index that rarely changes or rebalances may charge a very low fee. In contrast, a memecoin index with frequent basket changes hunting for the newest meta may charge 5% or even more, and that may be totally worth it. For the DTF holders searching for 10–100x opportunities, a high-fee, high-variance DTF may achieve that outcome.

Part of the fee charged to RToken holders goes to the platform (i.e. RSR holders) and part goes to the RToken’s governors. These are called the platform fee and the governance fee. Governors cannot remove the platform fee.

Because a fee that’s a flat percentage of all of the tokens in the basket can be calculated in terms of number of tokens regardless of their market price, no collateral pricing info (and hence no oracle price feeds) are required for these fees.

7. Allowing for very large collateral baskets

The Yield Protocol contains quite a lot of code to do the fancy accounting necessary to track yield, monitor tokens for default, make use of staked RSR in defaults, and so on. The Index Protocol is comparatively simple.

• The Yield Protocol is 10,052 lines of code.
• The Index Protocol is only 1,053 lines of code!

(both numbers for the Ethereum versions)

The reduction in lines of code means lower gas usage and fees on minting and redeeming. This means you can have much more diverse collateral baskets.

On Ethereum L1:

• Yield RTokens can handle about 10 collateral tokens before they become too computationally expensive
• Index RTokens will be able to handle 50+ collateral tokens before they become too computationally expensive

On Base:

• Yield RTokens can handle about 20 collateral tokens before they become too computationally expensive
• Index RTokens will be able to handle 100+ collateral tokens before they become too computationally expensive

On Solana:

• As development is still underway, this number is not known yet.

8. Deploying the Index Protocol on Solana

We believe the crypto space is ready for Index DTFs, and clearly there is a lot of action on Solana, so it made sense to deploy the Reserve Index Protocol there.

For now there is not a near-term plan to deploy the Yield Protocol on Solana. It’s complex enough that this would be quite a lot of additional development work.

Timelines

As I said in the introduction:

The Ethereum and Base version of the Index Protocol is already undergoing its first of three code audits. The Solana version is currently scheduled to undergo its first audit in January.

The front end interface for this new protocol (including the “zaps” needed to facilitate minting and redeeming) will probably take the longest to finish before public launch. There’s still a lot more code to write for these.

When will it launch?

𝕏 (formerly Twitter) | Farcaster | YouTube | Reserve.org

Introducing the Reserve Index Protocol was originally published in Reserve on Medium, where people are continuing the conversation by highlighting and responding to this story.

Decentralized finance (DeFi) unlocks financial freedom for everyone. No gatekeepers. No middlemen. Just direct access to raw financial innovation, supercharged by radical transparency and composability.

The promise is nothing short of revolutionary. Banking the unbanked, cutting remittance costs, and democratizing finance, all while streamlining global markets and even inventing new, better forms of money.

Still, for most, DeFi is largely unusable. Users just don’t have time to navigate the convoluted, ever-changing landscape of apps, terminology, and evolving risk/reward.

DeFi deserves to be used by the whole world, not just early adopters and true believers.

So, how do we get there?

Breaking down barriers

To realize its promise, DeFi needs to be less like a full time job and more like a long-term investment — just set it and forget it, no matter who you are, no arcane knowledge needed.

The Reserve protocol enables this vision by breaking down three key barriers to entry into DeFi:

1. DeFi is daunting. Information overload makes DeFi unapproachable. Everyday investors don’t have time to keep up with “flavor of the week” apps and incentives, scour social media for alpha, or monitor for hacks, depegs, or rug-pulls. Investing should be dead simple.
2. DeFi is disjointed. Too often, DeFi feels like a piecemeal hodgepodge of apps and services: on-ramps, chains, wallets, and dApps, each with their own unique interfaces and idiosyncrasies. A unified user experience is sorely needed.
3. DeFi is dangerous. Despite major progress in risk monitoring and audits, DeFi is still riddled with scams, hacks, and depegs. Beyond the tough-to-swallow tail risk, threat monitoring can be an enormous time sink.

By pushing unnecessary complications to the back-end, the Reserve protocol isolates these pain points and offloads them away from the end user.

Easy, safe, effective DeFi.

RTokens: a single interface to all of DeFi

RTokens act like a standardized interface to all of DeFi — a single point of entry to top opportunities, with yield-chasing and depeg risk offloaded to Reserve Rights (RSR) stakers on the back end.

Instead of mastering the ins and outs of multiple DeFi platforms, RTokens let users pick their favorite flavor of DeFi — stablecoin lending, market-making, liquid staking — and earn diversified yield with a single click.

From there, the pains of position management are delegated to RSR stakers. Stakers earn a portion of an RToken’s yield in exchange for governance and security — pledging their RSR as emergency first-loss capital while managing the RToken’s configuration and collateral.

This separation of concerns unlocks two RToken “superpowers” that enable “set it and forget it” DeFi investment:

RTokens are shape-shifting

RSR stakers manage the collateral composition of RTokens, and can sub in better yielding, more liquid, or safer assets whenever necessary. This takes yield chasing and position management out of the hands of RToken holders, who just hold a single token while stakers handle the rest.

RTokens are self-healing

Staked RSR also acts as an emergency backstop — sold off to cover losses if collateral depegs. This mitigates potential losses for RToken holders, and incentivizes RSR stakers to maintain safe collateral. Since stakers are the first ones “on the hook” if collateral defaults, they’re incentivized to monitor risks proactively — one less thing for RToken holders to worry about.

RTokens offer a single, simple interface to all of DeFi: one-click access to safer, sustainable yield. But what about users who aren’t quite ready to dive into DeFi?

Easy access through fintech app integrations

Fintech app integrations allows users to earn RToken yield without interacting with the blockchain. No wallet, no chain explorer, no dApps — just DeFi yield wrapped in a familiar app format.

Reserve Protocol shares revenue with RToken integrators, who can then share it with their users. On-chain interactions all happen behind the scenes, giving users low-friction access to RToken yield through a simple app interface.

DTFs: Just buy the haystack

“Don’t look for the needle in the haystack. Just buy the haystack!”

John C. Bogle, Vanguard Founder

As crypto markets grow increasingly complex, zeroing in on particular investment theses grows increasingly difficult. Today, over 4 million crypto tokens are traded on DEXs — up over 200% this year — with at least 3,500 tokens boasting a $1M+ market cap (source: GeckoTerminal, CoinGecko).

Clearly, no one person can keep track of them all.

Enter Decentralized Token Folios, or DTFs, a new crypto index platform coming soon from the Reserve Protocol. DTFs allow anyone to create a tradeable portfolio of tokens — like TradFi index funds — that tracks any theme, trend, or market sector with a single token.

So, instead of scouring social media, whitepapers, or DEXscreener for concentrated bets on particular theses, investors can just choose from thematic DTFs that target their preferred narrative— memecoins, AI, DePIN, DeFi, GameFi, DeSci, etc.

DTFs let users focus on the narratives they care about, offloading the tedium to portfolio curators.

Meet Reserve, wherever you’re at

Whether it’s yield farming, saving, or trading you’re after, the Reserve protocol offers straightforward access to all that DeFi has to offer.

Interested in learning more?

• Check out our new user guide — no experience necessary!
• Explore top RTokens and yield opportunities on Reserve Register
• Follow Reserve on 𝕏 (formerly Twitter) and Farcaster, or join the Reserve Discord server for more in-depth discussion

About Reserve

​​Reserve is a free, permissionless platform to build, deploy, and govern asset-backed currencies called “RTokens.” RTokens are always backed 1:1, are overcollateralized, and allow permissionless minting and redeeming onchain by users without the need for middlemen. Overcollateralization is provided by RSR governance token stakers. Each RToken can have an entirely different governance system and is governed separately by ecosystem stakers. Thus far the Reserve protocol has launched on Ethereum mainnet, Base, and Arbitrum One, and completed its ninth audit in April 2024.

Discord | 𝕏 (formerly Twitter) | Farcaster | YouTube | Reserve.org

How Reserve Helps DeFi Meet Users Where They’re At was originally published in Reserve on Medium, where people are continuing the conversation by highlighting and responding to this story.

Money is always losing value. From 2020 to 2024, consumer prices rose 20–30% in most developed countries, and at least three national currencies — the Turkish Lira, Argentine Peso, and Venezulean Bolivar — crashed over 80%.

Those building the Reserve protocol believe we can do better. By bundling assets and using them as money, Reserve enables a new type of inflation-resistant money: asset-backed currencies, or “RTokens”.

Today, over $200M in RTokens have been minted on Reserve, and anyone is free to use them. So, how do you get started?

This guide explains how to start using savings-like RTokens and, if you’re interested, how to earn more with Reserve. The guide is divided into 3 tiers:

• Beginner: Depositing via fintech app
• Intermediate: Minting RTokens on the blockchain
• Advanced: Staking RSR to secure RTokens and earn more

Beginner: Deposit via fintech app

Currently, the easiest way to earn RToken yield is to use the UGLYCASH app. UGLYCASH is a banking and payment app that allows users to earn RToken yields through their UGLYCASH Earn feature. If it’s available where you live (U.S. and Latin America¹), you can get started with just a few steps.

For U.S. users:

1. Download the app from your device’s app store (Apple App Store, Google Play).
2. Create an account. Verify with your phone, click “Start banking now!”, and follow the prompts to choose a username, register your email address, and verify your identity and location.
3. Add funds. Click “Add funds” to transfer money into your Ugly Cash checking account.
4. Connect your bank account. Follow the prompts to connect your account using Plaid.
5. Deposit into UGLYCASH Earn. Click “Add money” under the UGLYCASH Earn tab to start earning interest using RTokens under the hood.

For Users in Latin America:

1. Download the app from your device’s app store.
2. Create an account. Verify with your phone, click “Submit your info now,” and follow the prompts to choose a username, register your e-mail address, and verify your identity and location.
3. Add funds. Click “Add funds,” choose how you’d like to deposit, and follow the prompts. Currently, there are 4 deposit options:
   – Deposit stablecoins from Tron (USDT), Ethereum (USDC or DAI) or Base (eUSD, hyUSD or USD3)
   – Deposit via local bank transfer (only in MX)
   – Receive money from LATAM or some US states via P2P or Sobrecito (Transfer Link).
   – Open a virtual account to receive ACH/wire transfers from the US. Click “US Bank” in the home screen and follow the prompts ($5 minimum deposit required).
4. Earn yield automatically once your funds are received.

Congrats! You’re now officially preserving your purchasing power with asset-backed currencies. You can always retrieve your funds by withdrawing from UGLYCASH Earn and into your bank account with the “Withdraw” button.

Intermediate: Mint RTokens on the blockchain

You can also mint RTokens directly on the blockchain using Ethereum, Base, or Arbitrum. This route requires some setup (see DeFi Rate’s new user guide), but opens up more possibilities, like selecting specific RTokens and using them throughout DeFi.

RTokens can be minted on Ethereum mainnet, Base, or Arbitrum by following the steps below:

1. Connect to Reserve Register Dapp. Connect your wallet at https://app.reserve.org/
2. Choose an RToken. Click “Browse” to compare or the “RToken” dropdown to choose directly. If you choose an RToken on another chain, your wallet should prompt you to switch networks. To earn interest on dollar stablecoins, check out USD3 or hyUSD (mainnet, Base).
3. Navigate to the “Mint” page using the vertical menu to the left.
4. Mint the RToken. Choose an asset to pay with in the “You use:” box. Enter an amount to pay, and check how many RTokens you’ll receive in the “You receive:” box. If you’re satisfied, click the “Zap Mint” button.
5. Approve and execute the transaction using your wallet. Once the transaction is confirmed, the minted RTokens will be available in your wallet.

Done! RTokens in your wallet will automatically accrue interest and can be used throughout DeFi to earn more. To withdraw, you can exchange for common assets using the “Redeem” tab on the “Mint” page.

Advanced: Stake RSR to secure RTokens & earn more

Reserve Rights (RSR) is the Reserve protocol’s governance token. It can be staked on individual RTokens to earn yield in exchange for governing RTokens and providing first-loss capital in case of depeg. Whenever you unstake, there is an unstaking delay (typically 2 weeks) to prevent potential abuse.

Staking RSR can help you preserve purchasing power through additional yield and direct input into RToken governance decisions (e.g., which collaterals to on- or off-board). Staking RSR gives you a stake in an RToken’s future. RSR can be staked on any RToken as follows:

1. Purchase RSR from your preferred exchange (see all markets on CoinMarketCap).
2. Connect to Reserve Register Dapp. Connect your wallet at https://app.reserve.org/
3. Choose an RToken. Click “Browse” to compare or the “RToken” dropdown to choose directly. If you choose an RToken on another chain, your wallet should prompt you to switch networks. Your RSR will have to be on the same network, so be sure to purchase or bridge it there.
4. Navigate to the “Stake” page using the vertical menu to the left.
5. Stake your RSR. Choose how much RSR you’d like to stake in the “You stake:” box. Check how much staked RSR you’ll receive in the “You receive:” box. If you’re satisfied, click the “Stake RSR” button.
6. Approve and execute the transaction using your wallet. Once the transaction is confirmed, the staked RSR will be available in your wallet.

Congrats! You’ve now delved one step deeper into the Reserve ecosystem. Staking interest will automatically accrue to your staked RSR, and you can initiate unstaking on the “Stake” page. You can monitor governance proposals on the Reserve Forum and vote or create proposals under “Governance” on each RToken’s page.

About Reserve

​​Reserve is a free, permissionless platform to build, deploy, and govern asset-backed currencies called “RTokens.” RTokens are always backed 1:1, are overcollateralized, and allow permissionless minting and redeeming onchain by users without the need for middlemen. Overcollateralization is provided by RSR governance token stakers. Each RToken can have an entirely different governance system and is governed separately by ecosystem stakers. Thus far the Reserve protocol has launched on Ethereum mainnet, Base, and Arbitrum One, and completed its ninth audit in April 2024.

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¹ UGLYCASH Earn is currently available in Argentina, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Panama, Paraguay, Peru, Uruguay, Venezuela, and the following U.S. states: CO, CA, DE, IL, IN, KS, KY, MA, MO, MS MT, NE, ND, NH, NJ, PA, SC, TN, TX, VA, VT, WI, & WY

Preserve Your Purchasing Power with Asset-Backed Currencies was originally published in Reserve on Medium, where people are continuing the conversation by highlighting and responding to this story.