Today we’re excited to share an update on the Reserve Roadmap with our community. The TL;DR is:
- Our app is on schedule for Q3 release as planned.
- We have decided to launch RSV earlier than planned! We will be making RSV available to users of our app instead of RSD. RSD is technologically finished and will still be used as a collateral token, but will be made public after RSV.
- As described on the last page of our whitepaper, the RSV launch process will start with centralized operation and become automated and decentralized over time.
Read on for more details!
The Reserve App
The Reserve app is still scheduled for release in Q3. We’ve been working on it actively over the past several weeks, and we have a few more touches we want to add before putting it out in the wild. We’re close!
For Reserve, an app is more than just a bunch of code — there’s a whole story behind the scenes of how liquidity will be provided. As you may have seen on Twitter we have been in Cúcuta, Colombia researching more liquidity provision options so we can ensure our users can trade in and out of Bolivars from the app. In case you haven’t been following how much the Bolivar has devalued, this picture really makes it real — the Bolivar is so worthless they are using it like craft paper:
Three notes on the app release:
- With any new product, it’s important to work out lots of details once you get it into the hands of real users. So we will be advertising the app to small audiences in Caracas first — mostly people who dine and shop at the stores and restaurants that we are working with at the beginning — before focusing on rapid growth.
- Since our initial target market is Venezuela, most of our community members who are outside of Latin America won’t have access to the app upon initial release. We’re keen to release this and other apps world-wide when the time is right, though we don’t have a timeline set for that yet. As these plans take shape, we’ll let the community know.
- Users of the app will have access to RSV from day 1, instead of using RSD. More on this in the next section below.
RSD and RSV
We have an exciting update to share with respect to RSD and RSV.
As you probably know if you’ve been following Reserve, our plan has been to launch two stablecoins: first, RSD (backed by USD in a trust), and then later, RSV (backed by tokenized assets, including RSD). We intended to make RSD available in the app, and then later on, offer users the ability to switch to the (more robust) RSV.
We realized we could do better. The drawback to launching RSD first is that network effects would start to form around one coin, and then switching users over to the next one would take some work and set things back.
So… we’ve decided to launch RSV first! The RSV smart contract is now finished and audited.
The reason we decided to accelerate launching RSV is that we think it’s important to reach decentralization sooner rather than later. Centralized stablecoins are very useful in today’s environment, but we fear that they could receive significant pushback, and so in order to offer users a stable cryptocurrency that can’t be taken away from them, more decentralization is needed.
The Reserve token (RSV) is a decentralized, asset-backed cryptocurrency. “Decentralization” and “asset-backing” often don’t go together, so this may be confusing at first. The beauty of the Reserve protocol is that it turns each asset custodian into just one of many independent points in a network — if any one point is at risk of failing, it can be quickly swapped out for another. You can think of each asset custodian as being something like a “miner” — if there were only one party mining BTC, it would be easy to shut it off, but as soon as you have miners in dozens of countries, it becomes impossible. Reserve applies this same pattern, in a new way.
We will be launching RSV along with our Android app, so users of the Reserve app will be holding RSV, not RSD. As RSV is decentralized over time, users will automatically benefit from the increase in censorship-resistance, instead of having to actively switch over. Developers, exchanges, and others who are excited about our decentralized stablecoin vision can integrate RSV much sooner, and won’t need to transition users from RSD to RSV at a later date. This means that there won’t be any break in building network effects as we transition from centralized to decentralized. We’re excited about this updated approach, which we think will help build the community around RSV sooner!
To be clear, RSV will still be operated in a centralized way at the start, as we have described in our white paper. See below for an excerpt from the paper that describes our “Iterative Automation Approach to Launching Decentralized Software.”
RSV will be backed by a basket of tokenized assets from day 1, similar to how it will operate in its mature form. The initial collateral tokens will be:
- USD Coin (USDC)
- TrueUSD (TUSD)
- Paxos Standard (PAX)
This basket will evolve over time.
As we previously have stated, the smart contract technology and trust company agreements for RSD are complete. However, we’ve chosen to begin by promoting RSV rather than RSD, for the reasons described above. In our prior roadmap, we had contemplated using RSD as the first collateral token to back RSV, but we’ve chosen to wait until later on to add RSD to the RSV basket. We think this will help make the Reserve ecosystem easier to understand as we build out the use-cases for RSV — we want the market to understand that RSV is, by design, not dependent on RSD, just like it’s not dependent on any other single collateral token.
RSV will first be available only through our Android app in Venezuela. We will work with exchanges, DeFi projects, wallets, and dApps to integrate it all throughout the ecosystem after initial launch.
At launch, there will be no transaction fees on RSV transfers, and collateral assets will not include tokens that appreciate in value relative to USD. So at the very beginning, RSV usage will still not lead to any reduction in RSR supply. 😒 But by starting with RSV first, we are that much closer to the point where RSV and RSR begin working together as described in our whitepaper. The sooner RSV adoption begins, the more RSV will be in circulation when we reach the point of the protocol operating fully on-chain. 💪 The point of fully on-chain operation, where RSR and RSV work together as described in our paper, is how we define “mainnet launch,” and is still anticipated in 2020. This initial release of RSV will not prompt any release of team or seed investor tokens.
So… how long will it take to release RSV?
The RSV smart contract is already finished and audited! As soon as we launch the Reserve app, RSV will begin being minted.
An Iterative Automation Approach to Launching Decentralized Software
This is an excerpt from the final pages of our existing whitepaper, edited slightly for context, which sheds some light on our approach to launching the Reserve protocol:
Decentralized software development comes along with some very significant challenges. Among others, two challenges during initial development are:
- It’s hard to write software without introducing a single bug, and in this field, a single bug can be catastrophic.
- Software that interfaces with markets or other complicated phenomena will require iteration and calibration.
Writing a series of smart contracts that don’t permit editing and then launching them all at once, even with a security audit, is not a responsible way to develop this kind of software.
Before implementing complex functionality in smart contracts, the functionality of a contract should be performed manually off-chain, then automated off-chain, then programmed into a smart contract. This allows for iteration and automation of actual system behavior in a production environment before network functionality is substantially codified and iteration cycles are dramatically slowed down.
When initially launching smart contracts, developers should maintain full control of the code for some period of time. This permits fixing bugs quickly in a production environment. Many users are clearly willing to participate in centralized systems, and users who are not can wait for control to be reduced to join the network. This is the approach we are taking in launching Reserve. In addition to the fully smart contract powered alpha already running on a public testnet, we will follow this sequence when releasing the production version:
- Initially, on-chain functionality will be as simple as possible.
- The team will manually experiment with different parameterizations for the components of the Reserve Protocol.
- When the team is confident that a particular procedure is the right approach, the development team will automate that portion of the overall protocol on a private, centralized server.
- When an automated component has been running long enough in a private execution environment that the team is confident in its design, the development team will program it in smart contract form, and add that smart contract to the on-chain protocol, maintaining full control of that on-chain code.
- When a smart contract has performed as expected and been subject to sufficient incentives for subversion for a sufficient period of time for the team to be confident that it is without catastrophic bugs, the development team will transition its governance to require voting of the token holders for any change to occur.
- Eventually, the entire protocol will be automated on-chain, and the core development team will retain no privileged control of any kind.
Thus, we intend for the release of the Reserve protocol to happen in three phases:
- Q3 2019: The centralized phase — where Reserve is backed by a small number of collateral tokens, each of which is a tokenized US dollar.
- 2020: 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.
- Post-2020: 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.
We’re excited to be able to start the journey towards the decentralized Reserve stablecoin even sooner than planned. But as we saw with Facebook’s recent design choices, getting minor details in decentralization wrong can potentially lead to major issues (see the “Power Dynamics” section of our post on Libra). So it’s very important to take the time to do things the right way, and we will never rush the delivery of the protocol if it means putting the long-term vision at risk. This is part of why we generally avoid stating specific launch dates in advance. Remember that roadmaps can (and probably will) change as we go.
If you’re reading this, welcome to the Reserve Republic. It’s still just the very beginning. To get involved, consider becoming a Reserve Citizen ✊