Reserve

Reserve is a protocol built on Ethereum that enables the creation of asset-backed cryptocurrencies called RTokens. These RTokens are fully redeemable for the underlying collateral assets, which can include various ERC20 tokens. The protocol aims to provide reliable and permissionless access to these stablecoins, as users can mint and redeem them 24/7 on the blockchain without intermediaries.

RTokens are designed to be overcollateralized, meaning there is a pool of additional value to preserve the expected value for token holders if any of the collateral assets default. This overcollateralization is provided by holders of the Reserve Rights (RSR) token, who can stake their tokens on individual RTokens and earn a portion of the revenue generated from the underlying collateral.

The protocol's governance system, called Governor Anastasius, allows RToken creators to define the asset basket backing each RToken and an ordered list of emergency collateral assets. If a primary collateral asset defaults, the protocol can automatically trade to reach the new target basket composition. Governance also determines how revenue is distributed among RToken holders, RSR stakers, and other parties.

In the event of a collateral default, staked RSR can be seized through an automated process based on oracle price feeds, aligning the incentives of RSR stakers with RToken holders to choose safe collateral assets.