What is Resolv?

Resolv is an innovative protocol in the decentralized finance (DeFi) ecosystem that provides a stable, transparent, and crypto-native financial instrument. At its core is USR (Universal Stablecoin Resolv), a stablecoin pegged to the US Dollar. Unlike traditional stablecoins such as USDT or USDC, which rely on fiat reserves held in centralized institutions, USR operates entirely on-chain and is backed by Ethereum (ETH). This design eliminates the need for legacy systems and ensures decentralization, aligning with the principles of blockchain technology.

The protocol leverages a delta-neutral strategy to maintain USR’s stability. By holding ETH as collateral and simultaneously hedging its price volatility through short positions in perpetual futures, Resolv neutralizes market risks. This approach ensures that USR retains its 1:1 peg to the US Dollar, regardless of fluctuations in ETH’s value. Additionally, Resolv’s operations are fully transparent, allowing users to independently verify collateral levels and the protocol’s health in real-time.

Resolv’s architecture is composable, enabling seamless integration with other decentralized applications (dApps) such as lending platforms, automated market makers (AMMs), and payment systems. This interoperability makes USR a versatile asset within the DeFi ecosystem, serving as a stable store of value and medium of exchange.

Key Features of Resolv

Delta-Neutral Design

At the core of Resolv’s stability mechanism is its delta-neutral design. This strategy uses ETH as collateral while hedging against its inherent price volatility through perpetual futures. By offsetting any gains or losses in ETH’s market value, the protocol ensures that USR consistently maintains its 1:1 peg to the US Dollar. This innovative approach eliminates dependence on fiat-backed reserves or algorithmic models, providing a predictable and robust financial instrument.

Complete On-Chain Transparency

Resolv prioritizes transparency, with all operations—including collateral management, token issuance, and liquidity provisioning—conducted on-chain. Users can verify every aspect of the protocol in real-time, ensuring trust and accountability. This transparency aligns with Resolv’s decentralized ethos and distinguishes it from traditional stablecoins that often lack clarity about their reserves and operations.

Profit Distribution

The Resolv collateral pool maintains stability in USD terms while generating profits from staking Ethereum (ETH) and maintaining futures positions. These profits are distributed every 24 hours across three categories:

• Base Reward: Shared between staked USR (stUSR) holders and the Resolv Liquidity Pool (RLP) participants to incentivize staking and liquidity provision.
• Risk Premium: Exclusively allocated to RLP holders as compensation for absorbing risks like funding rate fluctuations and market volatility.
• Protocol Fees: Directed to the protocol treasury to support development, operations, and ecosystem growth.

In cases of net losses, such as high costs from maintaining futures positions, the losses are borne entirely by RLP holders. During such periods, no distributions are made to stUSR holders or the treasury.

Resolv Liquidity Pool (RLP)

The Resolv Liquidity Pool (RLP) acts as a critical risk-management layer in the protocol. It absorbs risks associated with the delta-neutral strategy, such as fluctuations in funding rates or counterparty risks, ensuring the system’s stability. Participants in the RLP earn competitive returns, creating an incentive for liquidity provision while enhancing the protocol’s resilience.

Capital Efficiency

Resolv’s design emphasizes capital efficiency by allowing users to mint USR or contribute to the RLP with a 1:1 ratio of ETH to token value. This eliminates the need for overcollateralization, which is common in other stablecoin models, making the protocol accessible and economically efficient for users.

Crypto-Native Resilience

By exclusively using ETH and its derivatives as collateral, Resolv is insulated from the risks associated with fiat currencies and centralized systems. This independence ensures that the protocol remains decentralized and resilient against external economic shocks, reinforcing its alignment with DeFi principles.

Seamless Composability

Resolv’s composable architecture enables its integration with a wide range of dApps and DeFi platforms. USR can be used for lending, trading, payments, and yield farming, making it a foundational asset within the decentralized financial infrastructure. This interoperability amplifies its utility and ensures that Resolv contributes to the broader DeFi ecosystem.

Tokenomics: $RESOLV and $RLP

$RESOLV Token

Purpose: $RESOLV is the governance token of the Resolv protocol.

Utility Functions

• Voting Power: Holders can participate in governance proposals, including adjustments of protocol metrics, approval of new integrations, and allocation of grants.
• Alignment of Interests: It aligns the interests of trading venues, liquidity providers, DeFi protocols, and other long-term partners of the protocol.
• Treasury Allocation: Treasury tokens can be allocated to bug bounty programs and other community-sourced protocol support.

Token Generation Event (TGE): The date for the TGE will be announced later.

$RLP Token

Purpose: $RLP represents the Resolv Liquidity Pool, acting as a liquid insurance pool designed to keep USR overcollateralized.

Key Features

• Risk Absorption: RLP absorbs risks associated with the delta-neutral strategy, ensuring the stability of the USR stablecoin.
• Yield Generation: In exchange for absorbing risks, RLP holders receive a higher portion of the profits from the collateral pool.
• Minting and Redemption: Both USR and RLP can be minted and redeemed by users in exchange for collateral deposited on a 1:1 basis.