Reserve Adoption Update
613103, Socials, GitHub, Adoption, Lodgecast 5, Staking 101, and more!
The dust is beginning to settle after the UST collapse, but it seems quite a few companies were paying out yield on deposits and then going off to Anchor to make more. Without telling people. I expect there will be a few more skeletons to fall out of cupboards yet. Which leads into our 101 for this week —staking and how sustainable are high yield crypto projects / stablecoins? We’ll get into that later.
First up :
- Memory lane
- Lodgecast #5 — Bakufu Ninja
- Kidney appeal
1 year ago (today actually), a couple of things caught my eye, first up was the partnership with Yummy — a delivery service.
Now of course we know they pay all their staff using the App / RSV. Secondly, and just before our next section, our very own BD manager trying to onboard as many merchants as possible :
So 1500 merchants this time last year and now we’re at 20,500 — over a 13x. Which leads us nicely into…
Lodgecast #5 — Bakufu Ninja
Here is the recording if you haven’t listened to it
Well done to Braden, Chad, Flamingo and of course Bakufu (especially for taking time out at the beach with his family!)
Some key points from a very informative chat are :
- Approx 1000 new merchants every 3 weeks
- Team is now 10 people
- It’s $300 for a point of sales system in Vz — Reserve is free and all you need is a phone — only large shops have POS.
- 70% of merchants come from network effect (referrals)
- The Mercado Libre deal was brought about by Mercado Libre customers asking them to allow Reserve as a payment method — wow — groundswell. Paypal Ebay anyone?
- At Sunset Roll, all 8000 attendees paid for everything with Reserve, and artists and event staff were all paid via Reserve
- Some API interface developments planned in after mainnet will allow Reserve to be used more easily by large companies to plug into their POS systems and perhaps payroll software.
- Q2 strategy is to open up more into other existing LATAM countries like Argentina, Colombia etc
- Planning to work with larger companies in those other LATAM countries
- Goal for EOY is 30k merchants
One final comment from Bakufu here regarding yield bearing RTokens :
This is a man and a team passionate about Reserve — and the best thing — they know this is just the beginning — there is so much more they know they can achieve. This next 12 months is going to be exciting — the groundwork is done now, it’s time to start scaling. Or as Jim Collins (he of Good to Great) would put it — put the flywheel into action. Just as an aside, this is a review of some takeaways from good to great :
Well, well, well.
Ticking (TikToking?) along nicely.
Still a solid 4.2, but new reviews really are pretty good.
You’ll notice the absence of BTC mentioned in that conversation while cryptocurrency was transferred cross-border seamlessly.
613,103 total users, 6455 new users. 185k since New Year.
We clicked another 2% this week toward code freeze.
Getting ever closer. 4% in the last 2 weeks has made that look a bit better. Humans like divisors of 10 so 90% will probably create a minor buzz. Which leads me on to developments this week.
Rather than swathes of new code, this is more ‘tailoring’ and also laying down groundwork for governance and some math / function tweaks. I think testing is now going to be given more focus, rather than building. There will be fixes and enhancements, but I think for the protocol we’re into testing. The first tests always reveal the most bugs, so that can be a bit slow, so I’m not expecting much on the % front next week.
So we’re back again. Because there isn’t a fixed rate of return, it’s worth just putting out as much info as we can and hope some of it lands. I’m going to create an online staking model like this one which isn’t a spreadsheet and you can fill it in online and dream. That’ll be Sunday or Monday as time is pressing at the moment.
Ok — so the days of 20% return on a stablecoin seem to be gone now — I think we can all see, as much as it was lovely, it was completely unsustainable and was some sort of marketing giveaway.
It’s also worth mentioning here that RToken staking is different from what most would consider ‘normal’ staking. There will be no more RSR printed to pay for staking, in fact the reverse — RSR will be bought from the open market to reward stakers. That is in effect a double win. Let’s look again at a couple of popular staked tokens. From https://www.stakingrewards.com/
Solana give you 5.19% reward for staking but are printing new SOL at a rate of 4.27%, so you are effectively only getting 0.92% reward.
ADA gives you 1.1%.
Ok, so on to RSR staking — what are the rules again? Well, you stake on an RToken, which earns yield (from AAVE and Compound, but could be others). That yield can be given to the RToken holders and RSR stakers in any mix between the 2, 50/50, 60/40 etc. That yield on the RSR side is divided among all staked RSR — that’s it. The rest is down to how much you paid and volumes of staking / RTokens.
Lets have a look at a super simple one :
So here we’ve got 1% RToken yield (this might be half of total yield of 2%). We’ve a market cap of 1 million and 100 million staked. Gives us 1% APY if we bought at a cent and the price is now a cent.
So if these ratios remained the same between MCap and stakers, we’re always going to get 1% — e.g. 1 billion MCAP and 100 billion staked — HANG ON — that’s never going to happen as 50% are locked. Interesting….
Scenario 2 — we bump up the MCAP but keep the stakers
Well what do you know — keep the stakers the same and increase RTokens — let’s say an exchange just took them on and a saving app allowed use of RTokens, so 2 million got minted. We’re now at 3% APY — great. Surely no-one will come and stake — they’ll just leave us to our 3% right? Wrong.
Scenario 3 — people stake a lot, and the MCAP is small. They don’t care — they just want more than nothing.
Gaaah — they’ve come in, spoiled the natural beauty that was 3% and taken a chainsaw to it — now we’re at 0.3% — pathetic. Now we need MCAP to go up or stakers to leave. These are both likely.
Scenario 4 — what if price of RSR goes up due to scarcity and the fact it actually earns money if staked? Lets take a look.
Price has gone up to 2c — meaning if you bought then your APY is even lower. Your dollar holding of RSR has now gone up though and you’re still getting the same return because you bought at 1c.
Ok, so gimme a decent MCAP and lets stake half and lets have the price at 5c. so time passes…
We’re at half a billion RTokens and 25 billion staked -is this realistic? I’ll say no — because as the price rises, the return at that price is not very attractive. I think people will wait until it’s a bit better at their buy in price.
So you’ll notice 2% return on buying at 1c but more importantly — a gain of $40,000 in value.
Lets do one last moon projection.
So you bought at 1c, your holding has gone up $190,000 and you’re getting 6.25% on that 1c. New buyers only get 0.31 if RSR is 20c. That’s pretty much all RSR staked (there must be some to buy back!) at only 2.5Bn RTokens — I think we all know in a few years there will be many more.
If you want it explained a different way, let me know.
Quick catch up : I set up a gofundme for Mr Hernandez, who needed a new kidney or he was going to die — his wife reached out to Reserve for help and I thought we could all help. And we did. We have raised so far £5,678, and Mr Hernandez is now in hospital (after a years waiting and tests) ready to get his transplant, which is amazing news.
Mrs Hernandez has been in touch as has asked if the Ranger community can help with the hospital and treatment bills — she is extremely grateful to everyone who has donated and asks if people could give a dollar or 2 towards the upcoming costs. If you can, then great — here is the link :
GoFundMe Sign In
Sign into your GoFundMe account to start a new fundraiser or manage an existing fundraiser to add photos, post update…
First up is another great article by Smeddy — this time a series of quotes from around the Reserve community
Key quotes from the last month: Know your Reserve
“…Long story short, the approach came because their users were asking them to use Reserve.”
A famous Venezuelan comedian did a quick TikTok video for Reserve — just the 11k followers
Nevin did an hour long video on why Terra collapsed, why they knew it would and also a possible way forward for Stablecoin issuers to ensure they are rigorously tested — also if you’re up for it there’s a potential scholarship there.
Mansi’s crypto course starts today!
Well that’s me for another week , thank you as ever for reading — this nearly didn’t happen: after a ‘shared memory realm does not exist’ error on a customers database it was panic mode on. For completeness —
db_recovery_file_dest_size was full. Who knew? Quick extension of it in startup mount and boom. Obvs I crosschecked archives and removed.