We are excited to announce that Reserve has enabled Flux Finance’s fUSDC and fDAI to be used as collateral as backing for its RTokens!
Background on The Reserve Protocol & RTokens
The Reserve Protocol enables the creation of RTokens, a form of programmable decentralized money backed by a basket of stable (and preferably yield-bearing) currencies. RTokens can be created permissionlessly, which allows for the customization of a stablecoin’s collateral basket and governance structure.
Reserve Rights (RSR) token holders can stake on an RToken of their choosing, which provides governance and acts as the first-loss capital in the event of a collateral default. In return, stakers receive a portion of the revenue generated by the RToken through its yield-bearing collateral. This dynamic proved resilient during the recent market turmoil that de-pegged USDC as low as 87 cents.
Background on Flux Finance & fTokens
Flux Finance connects the on-chain and off-chain worlds by supporting permissionless assets like stablecoins as well as permissioned assets like tokenized securities. Lenders can supply stablecoins to earn yield, while borrowers can pledge tokenized US treasuries as collateral. Stablecoin lenders receive the corresponding fToken, representing their right to reclaim the underlying stablecoin plus accrued interest, and which can be freely transferred. As tokenized loans against US Treasuries, fTokens serve as building blocks for other protocols.
Anyone can integrate fTokens freely, but if you are building a protocol or platform and want to discuss, you can reach out to the Flux Finance team at firstname.lastname@example.org.
How fTokens benefit RTokens
Flux’s additional functionality to support permissioned assets offers RTokens a new source of non-speculative yield, backed by safe and stable collateral in the form of Short-Term US Government Bond Fund (OUSG) tokens by Ondo Finance. OUSG is invested entirely into Blackrock’s SHV ETF, with a small portion of USD and USDC for liquidity purposes.
US Treasury yield now exceeds equivalent DeFi yields, enabling fUSDC and fDAI to offer arguably the best risk-adjusted permissionless yield available in DeFi, being collateralized by OUSG. At the target utilization rate of 90%, both assets currently yield 3.73% APY. By Enabling fUSDC and fDAI, RTokens can now benefit from exposure to the 'risk-free' rate alongside other diversified sources of DeFi yield, while being packaged into an overcollateralized stablecoin.
The deployed plugin can be found here: https://etherscan.io/address/0x7697aE4dEf3C3Cd52493Ba3a6F57fc6d8c59108a
Start building with fTokens via The RToken Register: https://register.app/#/
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