During 2019 the crypto space witnesses a growth when it comes to the variety of stable coins. USDT used to be a powerhouse and the only option that the traders considered as a safe haven.
After several controversies with USDT, several other Stablecoins options emerged, trying to cover the flaws of the previous titan. As another answer to the users’ needs, Reserve emerges.
How the Reserve Token is Stabilized
If demand goes down for the Reserve token, prices will fall on secondary markets. What happens then?.
Suppose the redemption price of Reserve is $1.00. If the price of Reserve on the open market is $0.98. Arbitrageurs will be incentivized to buy it up and redeem it with the Reserve smart contract for $1.00 worth of collateral tokens.
They’ll continue buying on open markets until there is no more money to be made, which is when the market price matches the redemption price of $1.00. The same mechanism works in reverse when demand goes up.
If the price of Reserve on the open market is $1.02, arbitrageurs will be incentivized to purchase newly minted Reserve tokens for $1.00 worth of either collateral or Reserve Rights tokens (the latter only if there is an excess pool of Reserve tokens available), and immediately sell them on the open market.
They’ll continue selling on open markets until there is no more money to be made, which is when the market price matches the purchase price of $1.00.
Reserve Protocol Phases
The team explains that the project will go through 3 major phases in order to reach their desired product:
- The centralized phase — where Reserve is backed by a small number of collateral tokens, each of which is a tokenized US dollar.
- The decentralized phase — where Reserve is backed by a changing basket of assets in a decentralized way, but still stabilized in price with respect to the US dollar.
- The independent phase — where Reserve is no longer pegged to the US dollar, with the intent of stabilizing its real purchasing power regardless of fluctuations in the value of the dollar.
The team well knows what current Stablecoins are doing and it seems that they want to kate it to the next level. Having a stable coin attached to the value of an existing currency like the dollar is a double-edged sword.
While it’s true that it gives stability to the current unstable crypto space. It also exposes itself to the country’s possible financial crisis. This is why after reaching the means to stability, detaching from such currency (US Dollar) is a brilliant approach.
The Reserve Protocol team has the goal of being a safe haven cryptocurrency. Facilitating cross-border transactions and to be used as a quick and efficient payment system.
Because of this, they chose Venezuela to be their testing ground for the launch of the payment app.
Their objective is to do their localized launch in countries where inflation and hyperinflation phenomenons exist. In order to grow as a solution that covers and fulfills the needs of the users living in these places.
The RSR team seems to put importance on keeping their community well informed, as they are quite active in a few of the more popular social medias for the cryptocurrency community.
Their strongest point is their own blog, where they have been posting bi-monthly (and in a few cases 1 or 2 more) updates on multiple topics, ranging from informative threads to community updates and Q&As.
Twitter can be said to be the “go-to source” for most crypto-related news, which means it is widely regarded as the most used social media in this space. RSR is well aware of this, as they keep people informed on a frequent basis.
The ones they have forgotten though, seems to be Instagram and Youtube. They seem to have decided to not spend their time on these platforms that are not so well suited in the crypto-world.
Although they are lacking in a few aspects, RSR certainly places a lot of thought and importance on their community. And this is an area where many other projects should look up to them and strive to be this communicative with their investors.
- Market Cap: $17,553,912 USD
- Market Cap ATH: $20,666,839 USD
- Current price: $0.004172 USD
- Price ATH: $0.004914 USD
- Circulating Supply: 4,207,726,273 RSR
- Total Supply: 100,000,000,000 RSR
- Total % of the supply released so far: 4.207%
CO-FOUNDER AND CEO
Nevin oversees strategy, legal, and team coordination at Reserve.
Nevin is an entrepreneur who has co-founded three companies. His mission in life is to solve the coordination problems that are stopping humanity from achieving its potential, and he’s particularly concerned about averting the long-term risks posed by the development of artificial intelligence.
CO-FOUNDER AND CTO
Matt is designing, analyzing and overseeing the Reserve Stabilization Protocol and architecting the Reserve protocol implementation. Previously, he did engineering for Google, Quixey, and the Linux Standard Base(IBM); his graduate research at the University of Wisconsin-Madison was in program analysis
Miguel is overseeing the execution of Reserve’s operational strategies.
Previously, he was an Entrepreneur-in-Residence at Paradigm Academy, working on a startup developing machine-learning SaaS tools for E-Commerce vendors and suppliers on fulfillment platforms such as Amazon, Alibaba, and TaoBao.
Reserve Rights has a large number of highly celebrated investors and entrepreneurs putting their seed into this project. As it looks to be a project with the characteristics to solve certain problems with today’s economy.
Sam is the president of YCombinator, co-founder and co-chairman at OpenAI, and a prominent angel investor. He has invested in Airbnb, Stripe, Reddit, Asana, Pinterest, Zenefits, Instacart, Optimizely, Change.org, among others.
Peter is a co-founder of PayPal, Palantir Technologies, and Founders Fund. He founded and funds the Thiel Foundation, which aims to further breakthrough technologies and improve humanity’s long-term future.
Is a digital currency exchange headquartered in San Francisco and originally incubated by YCombinator. Coinbase Ventures is an early-stage venture fund, focused on investing in blockchain-related companies.
The Reserves Rights team is trying to build another stable coin, but this one is quite different from the others. As usual, the main purpose of stable coins is to provide an alternative to safely secure cryptocurrency without losing value.
In this case, what Reserve Protocol is trying to create is a payment system where you can easily send money cross-borders for minimal fees, or use it as an everyday payment platform.
And for this they are choosing to start their journey on countries with hyperinflation of their currencies, enabling these poor souls to be able to maintain some sense of stability and to comfortably receive economical support from outside the country.
This is an incredible way to approach an oversaturated market, as virtually no one is trying to reach this target audience at this point. And if they manage to actually capture it and be let’s say the main alternative to the rapidly devaluing main currencies, their platform will be valued extremely high.
Together with their outlook on the future of making RSR independent of the USD, and facing the reality that the USD at some point won’t be the world’s reserve currency.
This is certainly a project that holds tremendous value if they manage to not lose their foothold and achieve their goals.