Reserve Rights – RSR

Reserve Rights RSR

Reserve Rights – RSR crypto

Reserve is building a stablecoin that can’t be shut down, and a network of decentralized fiat on/off ramps. This is how The Reserve Project briefly describes themselves. They strongly believe anyone should be able to transact with anyone else (in a legitimate way). Where banks and governments have showed they cannot be trusted, Reserve believes their decentralized and stable cryptocurrency is up for the job.

What is Reserve Rights – RSR?

Their mission doesn’t come without challenges. Reserve mentioned their current user base mainly consists of normal people and business owners in Venezuela. For those who have missed what’s going on their, Venezuela is seeing hyperinflation on their local currency, which led to many people converting their fiat to cryptocurrency.

Reserve already offers a fully working product with fiat on/off ramps, their user-base is growing and their vision is to not just provide this in Venezuela, but worldwide. They want to go beyond the basic transactions by offering card payments, and various other features.

The biggest challenge is to convert people to using their product. Now that might sound very straight-forward, but there are various barriers that make this more difficult:

  • Some countries don’t allow for their citizens to access foreign currencies.
  • Reserve writes; ‘’Some countries are seen as too high risk by global financial institutions, so their citizens are either not allowed to have accounts, or they are but accounts are highly limited and frozen so often that it’s hard to just do normal business.’’

The upside here is that The Reserver Project (and RSV currency) is decentralized, making it much harder for governments to prevent their citizens from using their product. Which ultimately makes this all come down to marketing and mass awareness, to further scale the user-base. Which is a phase many project are currently at.

General info about Reserve Rights – RSR

The Reserve Protocol

As often seen with decentralized projects, they don’t initially start fully decentralized. In fact, The Reserve Project and protocol currently operate in a centralized way. This is described as phase one, which will transition into phase two, where Reserve is still stabilised against the US dollar backed by a changing basket of assets. Eventually, this will transition into phase three, where Reserve is no longer stabilised against the US dollar, making Reserve fully independent.

The below image, taken from the Reserve website, offers the best summary of what the Reserve Protocol is and how it works:

  1. When the price of RSV goes above $1 on exchange, the protocol sells newly minted or excess vault RSV for either tokenised assets or RSR, driving the price of RSV on exchanges back down to $1.
  2. When the price of RSV falls below $1 on exchanges, the protocol purchases RSV for tokenised assets, bringing the price of RSV on exchanges back up to $1.
  3. When (as a result of asset appreciation or transactions fees) the vault has accumulated excess RSV, RSR holders can purchase this with their RSR as part of stabilising the price of RSV, which maintains the vault’ ratio of assets and reduces the supply of RSR.
  4. When the vault’s ratio of tokenised assets goes below the target range, the protocol sells RSR for tokenized assets, thereby replenishing the backing for RSV.

Reserve Rights Protocol

So summarized, the protocol uses excess reserve and tokenized assets to back Reserve and to keep RSV at a price of $1, making it a true stablecoin.

Use case of Reserve Rights – RSR

The Tokens (RSV and RSR)

The Reserve Protocol uses two native tokens and also interacts with collateral tokens. We’ve basically covered what RSV is about. RSV is Reserve’s stablecoin, currently pegged against the US dollar while operating in a still centralized way. However, the protocol heavily relies on speculators and arbitrage takers. When the price falls below $1, users are incentivised to purchase RSV and convert it to collateral worth $1 each, whereas when the price is above $1, users can purchase RSV for $1 from the platform and sell it for a profit on the listed exchanges.

RSR however, is something else. RSR is the Reserve Rights Token. RSR is currently rank #77 on CoinGecko and counts a market cap of $189,967,961. It’s trading on top-tier exchanges such as Binance, OKEx, Huobi and Uniswap.

Charlie Smith, the head of Business Development at Reserve, explained the most simple way to see RSR is to compare it to BNB. To use the Reserve Protocol, a small transaction fee is charged which will also generate yield. These funds are used for buybacks and burning RSR through the arbitrage mechanism. Which further decreases supply and increases demand.

RSR is also used as a governance token, to enable token holders to vote on proposals.

That said, there are a lot of different layers to this project and I would highly recommend to browse through their website for 30-60 minutes and really explore in more detail what all of this means.

The Team and partners

The Reserve Project is headquartered in Oakland, California, USA. Their team page gives a good overview of their current team members and their experience. Note: not all team members are shown on this page, some wish to remain anonymous whereas some still have to be added to the page.

I’m mainly interested in their partners and investors. The Reserve Project has gotten huge awareness from people after announcing various investors in the past. Their page gives a complete overview of who currently invested in the project and is basically helping to fund the collateral of the protocol.

Reserve Rights Protocol Team

This includes Coinbase Ventures, one of the top-tier exchanges located in the United States. As well as Peter Thiel, co-founder of PayPal. With recent news about PayPal starting to accept cryptocurrencies, the space was thrilled and various rumours of RSR being included in the supported list of cryptocurrencies on PayPal appeared. This resulted (partially) in RSR increasing in price and more speculators to jump on board. However, such news hasn’t been confirmed and at all and at the current PayPal phase I think this is still unlikely to happen anytime soon.

Where to buy and sell Reserve Rights – RSR?

What do we think about Reserve Rights – RSR?

I think it’s safe to say that The Reserve Project is a very ambitious one. There are over 30 stablecoins listed on CoinGecko, with Tether (USDT), USD Coin (USDC) and DAI (DAI) being used the most at the moment.

I’d see Maker (DAI) as Reserve’s biggest ‘competitor’ of becoming the most adopted decentralized stablecoin. Both have already proven part of their word and it’s all about scaling at this point. Reserve has very interesting backers which might enable them to really go for mass awareness, to eventually bypass DAI. That said, this shows huge upside potential for Reserve and therefore RSR. I strongly believe they could well play in the same league if they maintain and further increase their user-base at a high pace.

Reserve Rights RSR

Conclusion about Reserve Rights – RSR

In an actual bull run one may want to consider to add some RSR to their long-term portfolio. Full transparency, I held RSR a little while ago but sold it for ETH about a week ago. With the current market volatility I’m hoping to pick RSR up again for a partial short-term and a partial long-term play against BTC.

Crypto_Library_logo_512x512_svg

Trading and investing in cryptocurrencies (also called digital or virtual currencies, altcoins) involves a substantial risk of loss and is not suitable for every investor. You are solely responsible for the risk and financial resources you use to trade crypto. The content on this website is primarily for informational purposes and does not constitute financial advice.