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Snapshot vote for eRSDL Holders here:
From the unFederalReserve lab 🧪 🧫 comes an exciting new development combining Web3 functionality, re-base or emitting tokens and P2P (pool-to-peer) DeFi.
We have been closely monitoring the concept of Protocol Owned Liquidity (POL) and the OHM-type tokenomics/ecosystems. We strongly feel this concept is the next wave of growth and stability for DeFi because it provides the same backbone that the traditional capital markets enjoys. The challenge is the matching of the emission or re-base returns to the actual protocol’s treasury returns; not to mention compliance prevailing securities laws and actual vs paper control issues.
We believe that any project not integrating POL into their new project launches and existing projects would be making a huge execution misstep. If you believe that the “De” in DeFi stands for decentralized, and you do not want to see the same centralized concentrations of wealth (e.g., banks, large-scale private equity, and hedge funds, and deep-pocketed corporations) in traditional markets occupy blockchain-driven markets, then adoption of POL capital sources is critical.
Please note that DAOs and DeFi platforms are in the initial stages of integrating these tokenomics into existing ecosystems, and that partnership could result in tremendous stability and growth for both projects! This is evidence that bonding programs and DeFi are beginning to meld and are already happening.
After looking at our set of products and the product strategy, it was clear that a more profound integration of these tokenomics would provide immediate, additional safety for our users. At the same time, integrating bonding and DeFi will accelerate growth and reduce execution risk for ALL unFederalReserve products.
Therefore, we are proposing the launch of ReserveDAO, the newest unFederalReserve ecosystem component, and its corresponding token, RSRV.
- Buy a U.S. Treasury-chartered bank or a large enough equity interest to have control of the products the bank offers.
- Maintain healthy liquidity, including short-term liquidity needs for ReserveLending, ReserveFunding, and the upcoming, ReserveB2B.
- Provide stronger incentives for unFederalReserve ecosystem participants via attractive eRSDL and RSRV Protocol Owned Liquidity tokenomics.
- Provide more tokenomic options (Protocol Owned Liquidity), market levers, and stability in times of market volatility for our ecosystem.
- Reduce any perceived risk from our TradFi partners via a strong Treasury liquidity budget for each product in times of market volatility or accelerated growth.
- Provide greater liquidity reserves for ReserveLending+, ReserveFunding, and RB2B launch bootstrapping, fostering accelerated growth in 2022.
- We all know a bigger and cost-efficient “war chest” de-risks a start-up’s ability to execute for larger and more traditional finance customers.
We have received tons of feedback in the past few months and we are doing well in those discussions. We need to get to an even stronger position of market growth and expansion to meet the needs of our TradFi customers looking to bridge into DeFi.
We know there are a lot of DAO projects out there. It even appears that some of their goals (optimistically) are to attempt to also be some level of reserve currency for the DeFi ecosystem (or the ETH alternative they deployed on) and directly compete with the current market leaders.
As you can see in our goals above, the goal: “to be a Reserve Currency for DeFi” was never mentioned. Our RSRV token provides stability and liquidity needs for ALL of our products both now (ReserveLending and ReserveFunding) and in 2022 (ReserveLending+ and RB2B). We have an ecosystem of products already, and integrating these POL tokenomics strengthens our ability to execute and accelerate growth.
We will seek to buy a bank, and should the community propose that by holding RSRV, and subject to regulatory requirements, those holders would automatically get banking accounts, credit/debit cards, or other products offered by the bank, then we would support such proposals.
We will NOT be promoting hyper-accelerated RSRV holder growth to the entire DeFi ecosystem at large, but rather a long-term, linear growth of the treasury and holders based on the TVL goals of our unFederalReserve products ONLY. This means we will maintain a healthy and attractive APY for RSRV stakers, but it will be balanced around our ecosystem’s growth and not seek to attract users misaligned with our ecosystem goals due to high x00,000% APYS or higher! We want long-term (3,3) holders around our treasury vision, not short-term yield farmers who would leave at the first sign of trouble or market volatility.
An adequate Treasury to support the DAO’s main goals, listed above, will be due to the enthusiasm from our community, their connections, the prelaunch whitelist incentives, other partnerships that may evolve, and the innovative integration of these tokenomics into an actual, working TradFi to DeFi ecosystem and product vision. The community will be responsible for funding, governing and determining the path the DAO takes.
We have 2 out of the 3 products being used by customers NOW. Integrating the tokenomics into these products will make them BETTER and more STABLE; specifically, the added liquidity provided by ReserveDAO and home for excess liquidity can provide management a needed tool to prevent locking up and, possibly, cure payment latency issues. The final product, the RB2B launch, coming in Q4/23Q1, will complete the unFederalReserve vision. We will utilize these tokenomics on launch to accelerate market growth, the timelines for execution, and our vision will then be fully materialized.
Join us in the galley…join us on deck…
What is Protocol Owned Liquidity Tokenomics?
A bond is, generally, the exchange of cash now for cash+interest later. (https://www.investopedia.com/terms/b/bond.asp) … bonds can be foreign currency-denominated. In this case, one pays USD upfront and receives principle + interest in the form of another currency.
We will speak with a WY DAO attorney to discuss the limitations on offering bonds to everyone regardless of nationality or net worth. We are also unsure of the accounting implications of such an offer. Either way, the goal would be to get this bird off the ground and in the hands of RSRV hodlers as quickly as possible.
We will not get into very detailed explanations around RSRV tokenomics here since there are tons of great articles describing the tokenomics that range from simple explanations to the more advanced.
The best place to read on how a re-base token’s tokenomics work is their own documentation at:
And a more concise overview summary can be found here:
Look for a very detailed follow-up article during the prelaunch phase on how the tokenomics will be integrated into the unFederalReserve ecosystem beyond what’s described below.
Note that if you understand re-base tokens, then there is nothing special in how we integrate except in the choices for BONDs and treasury assets during launch and ongoing as well as the reward rate setting that provides APY for RSRV stakers.
ReserveDAO Governance and Why Another Token is Needed
As the diagram outlines, there are main dividing lines in the governance goals of eRSDL and RSRV and the treasuries they have influence over. The knowledge and general interests of a user deciding what token to hold to vote may align with one token or another, or both. eRSDL solely exists as part of the License- as-a-Service (LaaS) model described in other articles.
ReserveDAO Treasury — Roles and Responsibilities
This treasury is the standard re-base tokenomics treasury structure.
- Provide incentive to RSRV stakers for the marketing and sentiment of the unFederalReserve ecosystem.
- Provide the treasury-backed value for RSRV token.
- Absorb short-term illiquidity via bonding unTokens.
- Provide additional market options via the selling of bonds such as eRSDL bonds in times of market volatility or in general.
- Provide additional eRSDL incentives, liquidity, and support by providing a % of the Treasury and Bond revenue directly to the unFederalReserve treasury to be allocated according to eRSDL governance.
This is the current unFederalReserve ecosystem treasury already known by the community and is used to fund the development, marketing, and operations of ReserveLending,
ReserveFunding, ReserveLending+, and the upcoming RB2B product. The entirety of the ReserveLending platform ecosystem consists of suppliers and borrowers with nominal amounts of unFederalReserve balance sheet assets leveraging the platform. There are no other outside sources of capital in place at this time. As a result the liquidity available to borrowers or lenders is solely dependent on the participation of the other.
Revenue Flow of Funds in the ReserveDAO Ecosystem
- Revenue is generated from all five unFederalReserve products ReserveLending, ReserveFunding, ReserveLending+, ReserveDAO and ReserveB2B.
- A portion of that revenue fuels the eRSDL license fee tokenomics. (see also: https://unfederalreserve.medium.com/first-open-market-purchase-completed-9023bb0f871f)
- Revenue from ReserveDAO Bond sales will be used to support liquidity for the other unFederalReserve products and to pay its licensing fee (supporting the eRSDL tokenomics).
Look for a detailed % allocation article and wallet structure based on those allocations during the prelaunch phase.
Role of Governance Tokens
As the diagram outlines, there are main dividing lines in the Governance goals of eRSDL and RSRV and the treasuries they influence. The knowledge and general interests of a user deciding what token to hold in order to vote may align with one token over another or both.
eRSDL will likely end up being a quasi-DAO or bi-cameral DAO that would embody the features of a democratized platform with the controls we feel are required to meet U.S. regulatory guidance.
The goal of RSRV is to turn over treasury and project decisions to the community voting with these tokens; hence, the company would be able to burn the private keys and control those areas of the treasury and product. As we all know a certain level of saturation and expertise and size of the Governance community must hit a critical threshold in order to do this.
We are hoping the ReserveDAO announcement will give new energy to folks interested in participating in these governance votes and providing the expertise they have in order to meet this critical threshold later in 2022.
Governance decisions for eRSDL holders:
- Provide governance around product decisions, for instance:
- ReserveLending decisions around collateral factors, interest rate models and settings, new tokens to add, and other product feature decisions.
- ReserveFunding decisions around fund types to have the platform support.
- RB2B decisions around entity types to participate or additional sponsor banks to support.
- Provide governance around unFederalReserve Treasury decisions such as treasury allocations to the ReserveDAO treasury, community incentives, marketing, and partnerships.
- Provide governance around unFederalReserve Company decisions such as partnerships, mergers, and other general eRSDL Ecosystem decisions.
Governance decisions for RSRV holders:
- The specific direction of ReserveDAO in terms of products to support or parameter adjustments
- Provide governance around allocations to the unFederalReserve treasury, community incentives, marketing, and partnerships.
At first, ReserveDAO will operate as a division of Residual Token, Inc. dba unFederalReserve. While operating as a unit within the unFederalReserve enterprise, it will be obligated to pay a licensing fee to the IP division. Once ReserveDAO is independent of Residual Token, Inc., the licensing fee will continue until such time occurs that a) ReserveDAO elects to change its core software provider, and team and b) decides to no longer engage with Residual Token, Inc.
The IPCo will purchase eRSDL out of the market and begin tracking ReserveDAO’s license. The cost of the license will be dependent on several factors that will be discussed once an appropriate rate is determined.
The product is designed to operate without a central authority. It is therefore the goal of management to relinquish control of ReserveDAO to the holders of the RSRV token by:
- Forming a Wyoming DAO (https://unfed.info/3qtn3FR).
- Transferring the entirety of ReserveDAO control to the RSRV token holders at a strength of one RSRV per vote.
We understand that early participants, white-listers or users of the platform that purchase RSRV and (3,3) stake it for some period of time will maintain their relative voting power as the RSRV supply increases. Therefore, control will be disproportionately maintained by early adopters and holders. This is consistent with other projects of similar function.
How eRSDL Tokenomics and RSRV are Integrated in the Ecosystem
The eRSDL token is not compatible “as is” with the OHM bonding protocol (the possible candidate protocol to fork for the DAO). The eRSDL master contract is not controlled by management.
Benefits to eRSDL Holders
The integration of re-base tokenomics into our ecosystem can provide many following benefits for eRSDL holders.
Long-term eRSDL and uneRSDL holders will get automatically added to the ReserveDAO Level 2 whitelist! We have other special prelaunch benefits in the works, so stay tuned. We know how large your diamond hands are and you’re critical to the success of this launch and spreading the word.
These are examples of the potential whitelist criteria. We will compile and put it up for a vote if the project moves forward from here.
If you are not a long-term holder of eRSDL, but own 1,000,000 eRSDL or the equivalent number of uneRSDL tokens then you will be awarded a Level 1 whitelist. If you own 5,000,000 eRSDL/uneRSDL tokens you will get a Level 2 whitelist.
ReserveDAO will pay a licensing fee to the IP division of Residual Token, Inc. The latter will purchase eRSDL out of the market consistent with its application as a license-tracking digital marker (“DM”). Once the license expires, the eRSDL as a DM will be burned, placed in longer-term locked wallets, or subjected to a community vote. All of which should increase the scarcity of tokens.
The Bonding will provide the ReserveDAO treasury the ability to collect eRSDL into its treasury rather than to have it enter the public market. During the Treasury bootstrap event, eRSDL holders who may want to trade their eRSDL for RSRV without a DEX may do so with us directly. The treasury will need to ensure that this asset’s percent allocation is balanced to reduce currency risk and we will adjust and de-risk the treasury allocation of eRSDL as needed after launch.
The strong whitelist prelaunch incentives and innovative tokenomics of ReserveDAO into the unFederalReserve ecosystem will further grow unFederalReserve’s project exposure outside of the eRSDL community in a very effective and organic way. We are very excited at the potential exposure this may generate for unFederalReserve during the prelaunch phase that begins immediately following a passing Snapshot Vote. The vote timing is TBD, but we are thinking of the first week of May 2022.
We welcome even more ideas from our community during the prelaunch phase; specifically, use Discord to ideate ways to improve the prelaunch phase and execution of the project.
Benefits for ReserveLending
Currently, the ReserveLending platform experiences periods of illiquidity that occur typically during extreme market volatility. This has slowed overall TVL growth and daily users in the platform since users are more hesitant to add supply to a platform with periods of illiquidity versus the other DeFi lending alternatives. We need to meet the baseline health and efficiency goals of that platform to:
- Strengthen the efficiency, safety, and growth story of the ReserveLending platform to our customers.
- Promoting a stronger TVL for ReserveLending whose liquidity would provide flexibility for the company in terms of liquidity in times of market volatility (aka bank runs) or even better yet in times of opportunity that would warrant an additional spike of resources. Once Ethereum-based TVL is meeting a yet-to-be-determined healthy baseline for a healthy platform and more treasury revenue is established, we will be ready for applying resources in early Q1 for the first EVM-compatible ETH alternative (Avax of Fantom). ReserveFunding and RB2B products are always a priority from a resource standpoint, however.
The Bonding tokenomics may include unToken bonds of unDAI, unUSDT, unUSDC on Day 1 of launch. The user will have to hold eRSDL in their wallet from which the bonding funds are provided. A user who has currently supplied their corresponding USDC, DAI, or USDT can immediately extract their value by buying a corresponding bond to get RSRV at a discount and thereafter decide to get their USDC, DAI, or USDT back right away via a market sell or opt to stake that RSRV to accumulate more RSRV.
For more information about what are unTokens please review the following:
These bond discounts may also promote more TVL supply being added from short-term Bond arbitrage users, increasing stablecoin TVL and other partners’ token supply TVL in the future.
In case of market volatility and potential bank runs, we can then more aggressively sell unToken bonds to absorb the supply into the Treasury temporarily and allow a user immediate access to their supply liquidity until the market scenario is gone or stabilizes. After that, a governance vote will determine what the treasury would like to do with their additional supply of unTokens over time if needed.
Benefits for ReserveFunding
We have learned from our first vault, Atipana Series 1, that even with the application of advanced blockchain technology, streamlined identity and money data, that latency still plagues certain single-point failure moments throughout the process. For instance, the wiring of fiat for those electing that option over funding with their crypto takes more time than the instantaneous record-keeping that comes with a pure blockchain, purely money information, system. The ReserveDAO treasury can be used to advance cash payment, either directly or via third-party, registered affiliate, and eliminate that latency, establishing the most superior payment rails in the industry and rivaling our fiat-only competitors.
This is one of the various liquidity requirements for participating in certain funds. Some funds will have shorter-term liquidity needs and for others, there will be a lock-up period. We want to iterate and move fast in providing the best-balanced liquidity needs for fund suppliers and the larger the treasury, the more options are available to us. It will also promote the safety of these liquidity requirements in case of extreme market conditions and unknown risks so we can always ensure our fund suppliers that they can get their money back according to those terms.
The prelaunch and exposure from an innovative tokenomics integration also will increase the number of ReserveFunding signups and rich conversations with our potential fund partners.
This additional exposure will start NOW that we have announced our ReserveDAO launch!
Benefits for RB2B
This platform is a short-term cash management maker/taker loan marketplace for our TradFi customer segments. Whenever you launch a multi-sided marketplace such as this you may get into a chicken and egg problem where there may be more of one side of the marketplace on launch than the other. This constrains growth since this market-place may have an imbalanced set of cash providers or takers. With a strong treasury at our disposal, a short-term and governance-voted allocation to have the treasury participate on one side of this marketplace will keep both sides balanced and therefore attract more customers on either side. Once the marketplace and demand are sufficient enough then the Treasury can step back and let the fully- efficient RB2B marketplace run on its own.
The Prelaunch and exposure from an innovative tokenomics integration also will increase the number of rich conversations with our Potential RB2B launch partners as it will for ReserveFunding. This will happen NOW that we have announced our ReserveDAO launch!
Pre-Launch including the Treasury Bootstrapping Phase
Goals for the Prelaunch:
- Utilize the community to spread the word about the innovative tokenomics and upcoming Treasury bootstrapping event.
- Build a strong governance community around RSRV, building knowledge and a path forward on the Launch Bonds and equivalent tokenomics settings to ensure safety, the success of the Treasury Bootstrapping event, and continued growth of RSRV holders.
- Increase exposure and sentiment around the unFederalReserve ecosystem and suite of products both from the DeFi and TradFi communities both on and offline.
A healthy Treasury on launch to sustain a baseline TBV (treasury- backed value) and to bootstrap the bonding mechanism is needed. The Treasury Bootstrapping event will occur 30 to 45 days from the time of the next vote passage.
The current plan is that various tokens will be sacrificed to a wallet/smart contract for a highly-discounted number of RSRV tokens that will be airdropped on launch shortly thereafter. Once you receive your tokens, you can then decide to stake them as a true HODLer (3,3) of RSRV and for taking that RSRV off the market you will get a sizable number of additional RSRV tokens every X hours as well as a very attractive APY accordingly.
A VERY IMPORTANT note is that during this event the Team/Company distribution are targeting only being able to participate up to 20% of the total value of the Treasury sacrifices and not increase to ever more than 20% of RSRV. We do not want a saturation of company (or even potential VC) holdings to ever be too high. It’s fun being a TradFi to DeFi company but still maintaining the spirit of a DeFi user community and their concerns as it relates to large institutional holdings!
We are going for simplicity here, not overblown rules and smart contract interactions.
We are being overly conservative here in the timeframe estimate since we also want to get feedback from the community and the new community members who have experience in re-base tokenomics to provide feedback and then integrate any additions/changes into the final preLaunch and launch plans.
If you have experience in re-base token policy governance, please participate and make our ecosystem safer and help facilitate ways we can partner with re-base tokens to make BOTH ecosystems stronger. Imagine a world where we provide the TradFi to DeFi expertise and introduce these TradFi partners to great DeFi projects as new partners.
As part of the Prelaunch phase we may do one or more of the following to cover expenses related to ReserveDAO and other initiatives:
- Migrate liquidity from existing exchanges to Treasury
- Time-to-time treasury token sales, or
- Supply and/or borrow on ReserveLending
Ongoing DeFi Ecosystem Discussions
We are having a longer than normal Prelaunch and whitelist phase to take feedback from the community and new members and most importantly folks interested in re-base token policy governance. Our discussion forum and Discord chat will be heavily used during this phase and may evolve to having governance votes as the community around RSRV governance and policy grows. Look in the specific channels in Discord and forum topics around RSRV and feel free to create your topics.
We have code working in the Ethereum Rinkeby testnet now and are testing various prelaunch bond settings, and overall system settings now. We have confidently executed a fork for the ReserveLending platform and those core Smart Contract devs are driving this development process forward already.
Date of launch: A few weeks after the Prelaunch phase ends at the most.
Assume there will be a very standard/known UI for Staking, Bonding, and most importantly, full transparency via Dune Analytics on all treasury and revenue movements and allocations.
We are NOT pushing the boundary by updating the existing re-base token smart contracts. We do not intend on introducing code changes to the smart contracts. The baseline tried and true code is all that we need. We are bridging TradFi to DeFi. TradFi customers require conservative and very methodical approaches to handling funds and just as Compound did, we will not be introducing code changes.
We are not innovating around the baseline re-base tokenomics. We are innovating on how to integrate bonding and treasury revenue into an already existing unFederalReserve ecosystem.
We will also be reaching out to other re-base token communities around proper bond policy and reward rate settings. We have compiled onchain data since the other re-base token launches on these settings as well for reference. We are being very methodical and cautious and asking for experienced help in our community (we will reward with a special prelaunch whitelist) to ensure all settings are valid and cover economic safety for our users.
Look for a detailed safety article to come out before the launch outlining what we are doing to verify the validity of all settings and Bonding parameters.
Initial Bond Assets
- USDC: While we love MIM, we are working with USA-based stablecoin partners.
- unUSDC/unDAI/unUSDT (these represent ACTUAL stable coin-backed value at approximately a 50 to 1 ratio).
- Partners TBD. Let us know what you think!
We are looking to maintain a high-launch reward rate APY, and then scale down over time. As we move forward in collecting community feedback, we may adjust slightly during the first few weeks of launch but it’s important to note we will NOT be providing larger APY numbers, we want moderate growth to sustain our unFederalReserve goals only, and we want to support long term holders, not farmers.
The Reward Rate APY is MUCH easier to monitor and control via bonding and reward rate parameters rather than other APY calculations such as for ReserveLending.
What’s coming in the following weeks IF voting passes
Sample Timeline (Subject to Change)
RECRUITMENT PERIOD: Week 1–2
- Detailed Article on Whitelist program and structure. The whitelist program begins now however
- A detailed article on Treasury Bootstrapping events including use of funds allocation percentages. Tokens beyond USDC allowed.
- Detailed Article on Treasury revenue flows in between ReserveDAO treasury and Company treasury and governance mechanics.
- Wallet to collect USDC
- RSRV token distribution
- Live staking and bonding
- Forked wrapped and launch wrapped RSRV (wRSRV)
- Claim and autostake
There you have it folks. Take a look and after you’ve had a chance to absorb, and participate in the vote!
Any questions? Please visit our forum: https://forum.unfederalreserve.com/t/reservedao-general-discussion/392
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