ResolvPrice

(RESOLV)

Resolv is a decentralized protocol issuing USR, a 'delta-neutral' stablecoin. Unlike fiat-backed stablecoins like USDT or USDC, or over-collateralized ones like DAI, USR is uniquely backed by crypto-native assets such as ETH and BTC. To maintain its stable $1 value, Resolv simultaneously employs a hedging strategy involving short futures positions. This innovative approach aims to provide stability within the volatile cryptocurrency market, offering a distinct alternative for users seeking a decentralized, crypto-backed stable asset.

While both Resolv and other protocols like Ethena utilize delta-neutral strategies for stablecoin generation, Resolv distinguishes itself through several key aspects. It emphasizes a robust multichain approach, aiming for broader accessibility across various blockchain networks. Furthermore, Resolv incorporates a specialized 'Protection Layer,' represented by the RLP token. This layer is specifically designed to absorb the inherent risks associated with funding rate volatility and potential counterparty risks from Centralized Exchanges, acting as a crucial buffer before these risks could impact the core USR stablecoin.

Resolv operates on a triple-token system. USR is the core stablecoin, pegged to $1, designed for payments and DeFi applications, offering a "safe" yield through staking (stUSR). RLP (Resolv Liquidity Pool) acts as the junior tranche or insurance layer. It absorbs market risks, including funding rate fluctuations and potential issues with Centralized Exchanges, in exchange for significantly higher yields, thus buffering the USR stablecoin. Finally, RESOLV is the native utility and governance token, empowering holders to vote on protocol changes, treasury management, and receive a share of protocol rewards when staked.

USR maintains its $1 peg through an innovative delta-neutral strategy. When a user mints USR, for example, by providing $100 worth of ETH, the protocol holds this underlying asset. Simultaneously, it opens an equivalent $100 short position in ETH futures on Centralized Exchanges. This dual approach ensures stability: if the value of the underlying ETH drops by 10%, the short futures position gains a corresponding 10%, effectively neutralizing the price fluctuation and maintaining the total backing value at $100. This mechanism aims to keep USR consistently pegged to the dollar.

Yield within the Resolv ecosystem is primarily generated from two distinct sources. First, a portion of the yield comes from staking rewards derived from the underlying crypto-native assets, such as staked ETH (e.g., from liquid staking protocols). Second, significant yield is generated from the funding rates associated with the short perpetual futures positions that the protocol maintains for its hedging strategy. While funding rates can be volatile, the protocol strategically directs more of this fluctuating yield to RLP holders, helping to keep the yield for USR stakers (stUSR) relatively stable, historically projected between 7%-10% APY.

Utilizing Centralized Exchanges (CEXs) for hedging exposes Resolv to potential counterparty risks, such as exchange insolvency or operational failures. To mitigate these risks, Resolv employs several robust strategies. Firstly, it leverages secure off-exchange custody solutions (e.g., Fireblocks or Ceffu) to safeguard assets, reducing exposure to exchange-specific vulnerabilities. Crucially, the RLP (Resolv Liquidity Pool) acts as a dedicated insurance layer, designed to absorb the initial impact of any such CEX-related failures or extreme market conditions before they can affect the core USR stablecoin's stability.