What is Resolv and USR?
Resolv is a decentralized protocol that maintains the stability of USR, a synthetic stablecoin natively backed by ETH.
Unlike traditional stablecoins that rely on fiat reserves or algorithmic mechanisms, USR leverages on-chain assets and a delta-neutral strategy to ensure consistent value.
USR can be minted and redeemed by users on a 1:1 basis with liquid collateral such as USDT, USDC and ETH, ensuring immediate redemption for $1 worth of ETH.
While USR holds a consistent value of $1, USR does not inherently bear yield. However, users can stake their USR to mint stUSR, a yield-bearing version that allows them to earn rewards from Resolv’s collateral pool profits.
The current rewards rate for stUSR is 9.85% APR (based on the last 30D average).
The insurance layer, represented by the Resolv Liquidity Pool (RLP), adds an extra layer of security by providing overcollateralization through liquid ETH assets.
The protocol operates on Ethereum but Resolv tokens are also available on Base.
The Role of RLP
The Resolv Liquidity Pool (RLP) is integral to the protocol’s resilience, which is an insurance layer of the protocol ensuring that USR remains over-collateralized at all times by holding excess ETH collateral.
The value of RLP tokens is dynamically priced based on the ETH backing a single unit, and this price may vary according to market conditions. Currently, RLP is backed by 83.6% of ETH assets and 16.4% of stablecoins.
Users can mint and redeem RLP tokens in exchange for collateral such as DAI, USDC, USDE and USDT at the latest price, ensuring transparency and liquidity.
Beyond its insurance function, RLP also offers users a share of the protocol’s profits.
Those who participate in the RLP benefit from higher returns, as a portion of the collateral pool’s profits is allocated to RLP holders as a risk premium.
To back USR, Resolv employs a collateral pool strategy that ensures stability and profitability, consisting primarily of ETH and staked ETH, with a portion allocated to institutional custody as margin for hedging positions.
The protocol maintains a delta-neutral portfolio by hedging ETH price fluctuations with short perpetual futures positions. This approach eliminates exposure to market volatility, creating a stable value in USD terms.
The collateral pool generates profits from staking ETH and managing futures positions.
These profits are distributed daily in three parts: base rewards for stUSR and RLP holders, risk premiums exclusively for RLP holders, and protocol fees allocated to the treasury.
If the protocol incurs losses, such as those from negative funding rates, these are absorbed by the RLP, protecting USR holders from any adverse effects
Market-Neutrality Through Delta-Neutral Portfolios
Resolv’s delta-neutral strategy is a cornerstone of its stability. This trading approach minimizes exposure to price fluctuations by balancing ETH spot holdings with short perpetual futures positions.
The result is a portfolio that remains unaffected by market volatility, ensuring consistent value for USR holders. The use of perpetual futures, which have no expiration date, further enhances this strategy by closely tracking the spot price of ETH through funding mechanisms.
When ETH prices rise, unrealized losses on the short futures positions are mitigated by adding margin, while unrealized gains during price declines can be realized and withdrawn to reduce counterparty risk. This meticulous management of futures contracts ensures the stability and security of the collateral pool.
Profit Distribution
The protocol’s collateral pool accrues profits from staking rewards and futures funding rates, which are then distributed every 24 hours.
The base reward, constituting 70% of the profits, is shared between stUSR and RLP holders.
The remaining 30% is allocated as a risk premium exclusively to RLP holders. In the event of losses, the protocol prioritizes the stability of USR, allocating losses to the RLP layer while temporarily halting reward distributions.
This equitable distribution model ensures that all participants benefit from the protocol’s success while mitigating risks through a robust insurance layer.
$RESOLV token
Resolv’s governance is powered by $RESOLV, which grants holders voting rights on key protocol decisions. These include adjusting protocol metrics, approving new integrations, and allocating grants.
The token also aligns the interests of trading venues, liquidity providers, and other long-term partners with the protocol’s growth and sustainability.
Additionally, $RESOLV tokens may be allocated to community-driven initiatives such as bug bounty programs, fostering a secure and collaborative ecosystem.
Currently, $RESOLV is not live yet, but its points program is currently live, which are rewarded through various activities within Resolv.
Points farming on Resolv
Resolv points farming is currently ongoing. To maximise your boost chances, you should do the following:
Referee Welcome Boost (20%)
Use our referee link for Resolv and get a permanent 20% boost on your points.
Hyperliquid Power User boost (10%)
Deposit at least $10 into Hyperliquid protocol to receive a 10% point boost.
Dinero Power User boost (10%)
Hold at least $2 of Dinero pxETH by swapping on Dinero. You’ll need to be on Ethereum mainnet.
Grand Epoch boost (25%)
Receive a 25% base boost for this season.
Once you’ve done the above, you should get a 65% bonus in points.
To further increase your boosts, you can strive for a Gold dynamic boost based on activity on Resolv’s ecosystem.
Swap USDC for USR on Ethereum mainnet
You can swap for USR using the Resolv app. This will give you +1 activity point.
Swap USDC for RLP on Ethereum mainnet
Similarly, to the same for RLP using the Resolv app. This will give you +1 activity point.
Swap USDC for USR on Base
Do a similar activity on Base by swapping USDC for RSR. However, you’ll need to use Aerodrome for this. This will give you +1 activity point.
Swap USDC for RLP on Base
Similar activity for RLP on Base, use Aerodrome for this swap. This will give you +1 activity point.
Add USR/USDC LP on Base
Add to the USR / USDC LP on Aerodrome. This will give you +1 activity point.
Add USR / RLP LP on Base
Add to the USR / RLP LP on Aerodrome. This will give you +1 activity point.
Supply USDC on Euler’s Resolv Market on mainnet
Supply USDC to Euler’s Resolv market. This will give you +1 activity point.
How to bridge USR and RLP between Ethereum and Base
If you’re looking to bridge between Ethereum and Base for Resolv tokens USR and RLP, you can use Stargate to bridge.
Bridging should take less than 30 seconds.
Risks
While Resolv’s architecture is designed for stability, there are key risks such as counterparty credit risk, market risk, and liquidity risk.
To mitigate these, the protocol diversifies its exposure to trading venues, employs off-exchange custody solutions, and dynamically manages collateral. The RLP layer further absorbs risks, protecting USR holders from adverse market conditions.
For instance, counterparty credit risk is addressed by limiting margin exposure on exchanges and relying on third-party custodians.
Market risks, such as negative funding rates, are mitigated by allocating futures to highly liquid exchanges. Liquidity risks are managed by suspending RLP redemptions if USR collateralization falls below 110%, ensuring protocol stability during periods of high withdrawal activity.