Volatility, inflation, low adoption rates, and lack of trust among merchants have hindered the widespread acceptance of the cryptocurrency industry. Reserve Rights Token aims to change this by offering a dual-token system.
RSR is designed to facilitate low-friction transactions for users worldwide. Moreover, it adopts a peer-to-peer approach, eliminating regulatory issues associated with traditional financial systems.
So, what exactly is Reserve Rights Token (RSR)? What is the Reserve team doing to attract more users to its ecosystem?
Understanding Reserve Rights Token (RSR)
The Reserve protocol was launched via an IEO on Huobi Prime in May 2019. The team created a dual-token stablecoin platform with the goal of promoting global adoption of cryptocurrencies.
According to the Reserve protocol whitepaper, "the volatility of existing cryptocurrencies significantly reduces their utility," whereas stablecoins can be more widely used as "a store of value, a medium of exchange, and a standard for deferred payments." The Reserve protocol is supported by three tokens: the Reserve stablecoin RSV Dollar (RSV), the Reserve Rights Token (RSR), and collateral tokens, which are other assets held by Reserve's smart contracts to back the value of RSV.
RSV was introduced in 2019 and is backed by a basket of tokenized real-world assets (RWA), maintaining a peg to the US dollar, meaning 1 RSV equals 1 USD. RSV aims to provide a reliable ecosystem for developing countries and reduce remittance costs.
RSR is a utility token that enables holders to vote on governance proposals within the Reserve platform. Unlike RSV, RSR is volatile and is used to stabilize the value of RSV. 👉 Check the latest RSR price and key metrics
How Does Reserve Rights Token (RSR) Work?
Reserve Rights Token operates on the Ethereum blockchain. The goal of the Reserve protocol is to provide users with an innovative method to maintain stablecoin value. Since the RSV stablecoin is pegged to the US dollar, its value must be kept at 1 USD.
If the RSV stablecoin falls below 1 USD, the Reserve protocol will buy more RSV to bring its price back to 1 USD. If the target value exceeds 1 USD, the protocol will sell newly minted or excess RSV to push the price back to 1 USD.
The role of RSR is to reinject liquidity into the market when the assets held by the Reserve protocol decline and can no longer guarantee the required reserves for existing RSV. Therefore, when the supply of RSV increases, the quantity of RSR decreases.
Who Are the Founders of RSR?
RSR was launched in 2019 by Nevin Freeman, who is also the CEO of the project. He is a successful entrepreneur and has co-founded three companies.
Another co-founder of the RSR project is Matt Elder, the CTO, who has previously worked at Google, the app search engine Quixey, and Linux Standard Base.
Since the IEO, the Reserve protocol team has expanded significantly and now includes over 24 members, including developers, engineers, and legal compliance personnel.
The RSR project has also gained support from prominent investors such as Coinbase Ventures, Sam Altman (President of Y Combinator), and Peter Thiel (Co-founder of PayPal).
What Makes RSR Unique?
The uniqueness of the Reserve protocol lies in the fact that its stablecoin is backed by a basket of cryptocurrencies managed by smart contracts. This contrasts with other stablecoins, which are typically backed by fiat currencies like USD and managed via bank accounts controlled by the stablecoin issuer.
The cryptocurrencies backing the stablecoin include ETH, USD Coin (USDC), True USD (TUSD), and Paxos Standard (PAX). Reserve also plans to support more collateral tokens to diversify its asset reserves, including fiat currencies and securities.
Another distinctive feature of the Reserve protocol is its arbitrage mechanism, which uses RSR to boost or suppress the stablecoin's price if its value falls below or rises above 1 USD.
What Gives RSR Its Value?
RSR serves three main purposes: eliminating hyperinflation, creating a robust ecosystem, and providing a stablecoin.
RSR and the RSV stablecoin are interconnected through arbitrage minting and stability processes, making them ideal solutions to combat inflation and hyperinflation. Stablecoins like RSV are ushering in a new era free from inflation. Thanks to diversified asset backing, RSV is also less susceptible to government regulations.
What Is the Circulating Supply of RSR?
The maximum supply of RSR is 100 billion tokens, with a current circulating supply of 53,291,915,404 RSR. Although the total supply is set at 100 billion, the Reserve team has indicated that this figure may be subject to change.
RSR was launched with a circulating supply of 6.85 billion tokens, of which 3 billion were allocated to users participating in the Huobi Prime IEO. An additional 2.85 billion were released as project tokens, and 1 billion RSR were allocated to private investors.
Other Technical Details About RSR
According to the RSR website, the Reserve protocol will initially operate in a centralized manner. The Reserve team notes that as the network grows, the protocol will gradually migrate on-chain, and control will be progressively released. Eventually, the Reserve network will become fully decentralized.
To achieve this, Reserve has planned three phases:
- Centralized Phase: The project is backed by a small number of collateral tokens, each tokenized to represent USD.
- Decentralized Phase: A basket of assets serves as reserves in a decentralized manner, but the peg to USD is maintained.
- Independent Phase: The stablecoin is no longer pegged to USD but remains stable regardless of changes in the value of the US dollar.
Frequently Asked Questions
What is the main purpose of the Reserve Rights Token (RSR)?
RSR is primarily used to stabilize the value of the RSV stablecoin through arbitrage mechanisms and governance voting. It also serves as a utility token within the Reserve ecosystem, allowing holders to participate in key decisions.
How does the Reserve protocol maintain the stability of RSV?
The protocol uses smart contracts to automatically buy or sell RSV based on market conditions. If the price deviates from $1, the system engages in arbitrage to restore the peg, often involving RSR tokens to balance supply and demand.
Is RSR a good investment?
Like all cryptocurrencies, RSR carries investment risks. Its value is tied to the adoption and performance of the Reserve ecosystem. Potential investors should conduct thorough research and consider market conditions before investing.
Can RSR be used for payments?
While RSR itself is not designed for direct payments, it supports the RSV stablecoin, which is ideal for transactions due to its stable value. Users can utilize RSV for everyday purchases and remittances.
What makes RSV different from other stablecoins?
RSV is backed by a diversified basket of cryptocurrencies and real-world assets, managed via smart contracts. This contrasts with many stablecoins that rely solely on fiat reserves held in bank accounts.
How can I acquire RSR tokens?
RSR tokens are available on various cryptocurrency exchanges. You can purchase them through trading pairs such as RSR/USDT or RSR/BTC, depending on the platform. 👉 Explore trading options and market strategies