RSR Analysis Sunday — Edition 18
The Future Is DAO
Happy Sunday Rangers! Sit back, and take a few minutes to imagine…
Your alarm chimes softly, but you were awake hours ago. Dawn is breaking on a brisk March morning, at least by equatorial standards. Waves crash below your balcony a few hundred meters away, their periods matching your calm breathing. Vendors can be heard jockeying outside for position along the small beach town’s main drag. Your location hasn’t been disclosed broadly, but most of the community knows your general stomping grounds by now — this time of year it’d be around the Carribean —Ecuador, Cartagena, El Salvador, and maybe Puerto Rico or Miami on occasion. As summer comes you plan to head back to the northern hemisphere — probably Europe. After a few months it’ll be off to Asia for the dry season — a winter in Thailand, maybe a small island in Indonesia for a few months.
But you aren’t planning the next city today — today is special. Today is March 16th, 2024, and bitcoin is about to experience its fourth halving, and just a few more blocks to go. Like the last halvings, everyone still says this one is priced in, but you know better.
You pop open your RSR SDR Dashboard to view the latest RSV accruals from your RSR delegation. There is a long list of proposals below the sleek UI that have been passed since the protocol went live on Mainnet almost three years ago, back in 2021. Your mind flashes briefly to your past life as a cubicle jockey, a time before realizing that financial freedom was possible by simply skirting the big corporations and building crypto networks instead.
You flip to another tab check the latest basket of collateral underlying the RSV token and opt to withdraw some of your RSV from a yield pool into your Reserve App Wallet for this week’s expenses. You’ve been arbing (known colloquially as “RSR-Bing” because of the sound that the RSV deposits make when they are distributed twice daily at 6:00 UTC and 18:00 UTC) steadily for 18 months now and the income is enough for you to live a modest but fully independent lifestyle. You’re a trusted member of the community, having been around for several years — since late 2020. And you’re about to put the finishing touches on your third proposal, to be voted on by the Reserve DAO. This would increase the bitcoin collateral allocation (via wBTC) from 3% to 5%. You re-read all the materials you’ve compiled — historical volatility, institutional backing, ETFs, Stock-to-Flow modeling, hashrate swap derivative advancements, global FX implications, and more — and feel like you have a solid proposal to put forth. Sure, this means a proportional reduction of the market cap weighted Global FX Basket of USD, EUR, GBP, JPY, SGD, and CHF from 53% down to 51%, but you feel like the community is ready, and the arbitrage opportunities that this change will afford if the S2F model continues to play out will be significant. Out of habit, you select “Show in USD” under the RSV Distribution Dashboard to show the global value of circulating RSV in US Dollars —and the sleek UI transforms to display $19,206,416,284 in circulation. It’s definitely time, you think to yourself. You tenderly click “submit” on Reserve Improvement Proposal 84 (RIP-0084) — A Proposal to Increase the Overall Bitcoin Allocation as a Percentage of the Underlying RSV Collateral Pool, and head out to do some work at the local coffee shop before catching some afternoon surf.
As you pay for your coffee with the RSV from your wallet, you think how incredible it is that just a few years ago, the team had to limit invites to get the app working steadily in just a handful of geographies, and that now Reserve is used by over 100 million people in 40 countries, with no plans to slow down its growth this year. You sit down outside, reopen your laptop, and click the link to bring you to the Decentraland halving party (first making sure your new Fuzzy Reserve 2024 cap is loaded for your avatar, of course). With some of the world’s best coffee coursing through your veins, you’re ready to lobby for your proposal’s passing before hitting the beach.
Decentralized Autonomous Organizations (DAOs)
Described above is a hypothetical future, where our anonymous protagonist contributes to Reserve as one of many key members. In this future state, the Reserve ecosystem can’t be shut down — it has achieved crypto nirvana — in that the original core team has become fully distributed and the protocol fully decentralized. This will become the hallmark of a successful crypto network in the future. No one can shut it down, since it doesn’t really exist anywhere in the legacy world of joint-stock corporations and monolithic office buildings (though in a limited legal sense it does still exist in certain friendly jurisdictions, but only for operational purposes).
For example, compare a traditional organization:
To a decentralized one:
To realize the full value proposition of crypto networks, and build something that can’t be shut down, the network needs to function without a single entity or individual as its figurehead or leader. In the short-term, during initial development, the Reserve Team is doing a great job deploying the app, beta testing the ecosystem, developing the smart contracts and many other crucial steps that must happen before the ecosystem can be “set free” to operate autonomously. Generating a strong community and group of contributors that can carry the torch of development beyond what the core team has done leading up to main net this year is at once one of the strongest benefits that crypto offers, and its greatest challenge.
To get a sense of how this might come to fruition with Reserve, it is worth examining a few successful DAOs and how they operate. There are many examples we can explore in the future, but let’s take a look at a few prominent ones to start:
- The Bitcoin Network — Bitcoin Improvement Proposals (BIPs) are utilized by the community to activate improvements including hard and soft forks of the protocol, such as the latest Taproot soft fork (BIP-0341). Once discussed and approved in community forums, contributors will often build tools to monitor as well as explain them.
- The Ethereum Network — developed by Vitalik Buterin, Ethereum needs no introduction as the second largest cryptocurrency; it is a fully distributed and decentralized global supercomputer on which much of the crypto ecosystem operates. Ethereum Improvement Proposals (EIP) are put forth to make changes to the network. ERC-721 standards that came from EIP-721 for example, have spurred the world of NFTs, creating value and novelty today that couldn’t have been imagined when it was introduced several years ago.
- The MakerDAO Network —as examined by Reserve nearly three years ago, MakerDAO is the first prominent dual-token stablecoin system, comprised of MKR (governance) and DAI (stablecoin). The Maker Foundation is part of the Maker Community, and consists of the core MakerDAO team. MKR was airdropped to community members to bootstrap the system initially, and has become arguably the most prominent DAO aside from Bitcoin and Ethereum. Similar to our surferbum protagonist above, MKR governance token holders can vote on proposals to adjust variables in the underlying protocol, or oracle feeds that are used as a reference to them.
Decentralized governance is perhaps the single most important difficult aspect of a crypto network, and one that will be necessary for the Reserve ecosystem to realize its full potential. DAO governance is arguably in its infancy, and needs improvement in certain areas. But the ability to achieve decentralization is the core of what makes these networks valuable. Apps will be built upon it, businesses will thrive because of it, and individuals will find freedom through it, without middlemen taking a cut. It’s important throughout this paradigm-shifting journey to not only examine successful crypto networks that have already started on this bumpy path, but also to think from first principles on what is best for the ecosystem — users, developers, core team, and other community members. It will be a fun ride, and one that every Ranger should feel privileged to have the opportunity to shape.
Technical Analysis — Week of May 2nd
Monthly Timeframe — USDT Pair
We continue on track with forward progress and a fourth green monthly candle. As mentioned last week, a monthly close over $0.10 would have been ideal, but given historical patterns after a consolidation like this (see blue arrows below) I do expect May to be quite the banger.
Weekly Timeframe — USDT Pair
We’ve continued consolidating and forging steel on the weekly charts around the $0.075 — $0.10 mark. The price action looks similar to the November timeframe before we received long-expected news that Paypal was enabling access to crypto for their users (remember that?!). I believe we’re going to experience a similar liftoff this month when we break above $0.10 on the weekly, likely this week or next.
Daily Timeframe — USDT Pair
The growth pattern shown last week implies a $0.12 — $0.18 price by the end of May; coupled with the likelihood we receive some positive news from the team within the next couple weeks, I feel confident we’ll repeat the pattern below. Consolidation as expected last week, as we’ve seen a push into the $0.09 range with a bit of cool down. I believe we’re now primed for liftoff.
We have a MACD crossover and are holding strong above EMA with some consolidation looking to resolve itself in the next 24–48 hours. Would assign a roughly 75% probability (strong confidence) to a breakout higher into the $0.10 range, likely retesting highs at $0.12 in the coming week.
Daily Timeframe — BTC Pair
We continue to hold strong above the 130 sat mark as well as last week’s adjusted trend line. I do expect some resolution higher vs. the bitcoin pair this week or early next, and for us to retest the 185 sat level this week with a potential break higher next. Certainly I would prefer some steady growth here vs. the volatile movements we have seen so that we can have a few strong closes higher. Will continue to monitor this one as bitcoin completed its first red month in nearly half a year, so I do expect some strong performance in bitcoin this month as well as RSR.
Previous Editions of RSR Analysis Sunday
Edition 17 — April 25th, 2021
The Age of Crypto
Edition 16 — April 18th, 2021
What the FUD? | Thoughts on RSV
Edition 15 — April 11th, 2021
Reserve & Network Valuations
Edition 14 — April 4th, 2021
Reserve, Bitcoin, & Time Scarcity
Edición Especial de Abril — April 1st, 2021
FruityChain Implementation
Edition 13 — March 28th, 2021
Successes from Marzo (App Rollout)
Edition 12 — March 21st, 2021
Scaling The Team & The Importance of User Experience
Edition 11 — March 14th, 2021
Reserve Adoption — It’s Happening
Edition 10 — March 7th, 2021
Welcome to Medium
February 2021
All Reports from February (originally shared in Telegram)
January 2021
All Reports from January (originally shared in Telegram)
DISCLAIMER: “RSR Analysis Sunday” is for entertainment and informational purposes only and is not meant to be construed as financial advice of any kind. All investments carry risks.
“RSR Analysis Sunday” is not endorsed or supported by the Reserve Team, or any of its affiliates.
