REAL USD: DeFi’S Most Powerful RWA-Backed Stablecoin

USDR v2 aka Real USD will deploy in a few weeks. In this article, we’ll share all the key details on the updates and new features to Real USD. Expect future articles to dig into key topics and new benefits with deeper analysis.

The goal of any second deployment is to improve upon the first product. With Real USD, you’ll see key improvements across the following areas:

• Liquidity
• User Experience
• Community benefits
• Yield
• Protocol stability

We believe that Real USD (USDR v2) will accelerate demand for our stablecoin and set Tangible on a path towards long term success, serving as a key building block in our growing platform of products leveraging tokenized real world assets.

So let’s dig in on what’s new in USDR v2.

More and Diversified Liquidity

Real USD includes two major updates to the management of protocol owned liquidity (POL.)

First, the existing USDR-DAI pool on Uni v3 (~15% of market cap) will be moved to Curve and redeployed as USDR-3Crv (3pool.) We see multiple benefits to this move:

1. Curve is the stablecoin nucleus of DeFi. From a product placement perspective, this feels like the best place to build exposure for USDR and the most natural location for liquidity to live moving forward.
2. From a yield perspective, the USDR pair will vastly outperform any other stable pair on Curve, leading to new adoption. The Aave 3pool is Curve’s highest yielding stable pool on Polygon, currently returning 1.4%. At launch, the USDR-3Crv pool will return ~10% APY, the highest yielding pool on Curve. We view this as a major driver to growth.
3. The 3pool itself brings a user experience benefit, allowing DAI, USDC and USDT holders to more easily and cheaply swap to USDR.
4. Curve does not restrict the deployment of rebasing tokens into liquidity pools (see below)

USDR-3Crv yield leaps to the top of this list

Second, 5% of market cap will be used to deploy TNGBL-DAI POL on Uni v3 solving the following issues:

1. Existing liquidity of TNGBL is too thin and small trades result in large movements to the price. This is ultimately destabilizing to the system.
2. More liquidity allows TNGBL to trade freely and better establish a true market value. As a core asset in the USDR ecosystem, there should to be enough liquidity to find an actual market price.
3. Along with the changes to minting USDR with TNGBL (more on this later) larger liquidity will drive demand in TNGBL as swaps will not penalize traders with massive losses due to slippage.

A Natively Rebasing Token for Better User Experience

Real USD will shift the token design from the existing two token system (USDR/sUSDR) to a natively rebasing single-token: USDR. Staking will no longer be required to earn yield.

This change makes it easier for all users to enjoy the native yield from USDR.

The token can move freely throughout the DeFi ecosystem, returning yield to any holder, without the need to return to Tangible to stake/unstake the asset. USDR instantly becomes a better building block to leverage in any DeFi application. It’s also easier to hold as a yield-generating asset in treasury management or other customer yield solutions for DeFi and CeFi builders.

For mainstream personal finance users, “normies,” removing the additional step of token staking makes simplifies the process of onboarding the customers to our ecosystem. Simply mint or swap to earn 8–10% through a native rebase.

1:1 USDR Minting with TNGBL Strengthens the System and Rewards Community

Real USD introduces a massive new system update, the ability to mint USDR at a 1:1 value ratio with TNGBL.

The key limitation placed on this feature is that TNGBL can not mint more than 10% of the total minted amount of USDR (minus) the redeemed USDR.

Minted USDR includes USDR minted from the following sources: DAI, TNGBL, through LPs as well as USDR minted off of system gains (more on this update in the next section.)

Example:

• $1,000,000 of USDR has been minted (from various sources)
• $100,000 has been redeemed
• $50,000 of the $1,000,000 was minted with TNGBL
• This means that a total of $40,000 of USDR can still be minted by TNGBL (1:1), out of the $90,000 possible (10% of $900,000, minted minus redeemed)

1:1 minting allows TNGBL holders to immediately partake in the upside of Tangible and USDR, as newly established liquidity for TNGBL drives demand, providing value for the community and ultimately returning TNGBL to the USDR treasury through minting.

A more established market for TNGBL gives greater stability to the TNGBL backing in the USDR treasury, which is now projected to cap out between 10–15% (including LP). Lastly, 1:1 minting provides a guaranteed off-ramp for TNGBL lockers, minting matured, multiplied TNGBL into a native-yield stablecoin at the end of the vesting period.

TNGBL-USDR Minting Interface

Minting USDR Against System Gains

USDR v2 also deploys a new approach to realizing system gains, using them to immediately bolster the system with new real estate purchases.

Moving forward, any gains to the treasury above 100% collateralization, including gains to TNGBL, will immediately be minted into new USDR and used to purchase real estate through the Tangible marketplace. Having passed 100% collateralization, these gains can be minted to new USDR without risking the peg or a 100% token backing.

In the initial deployment of USDR, real estate assets needed to hit 130% over collateralization for USDR holders to see a boost in yield, minting yield against incremental gains in the property values beyond that point. Rental yield remained the same up to that time as the rental assets grew linearly with market cap.

Moving gains immediately into additional real estate is a greatly optimized approach, benefiting the system in multiple ways:

1. We speed up the timeline to boost the yield above the 8% target rate. In a category where yield is the primary value prop, it is imperative we responsibly maximize yield to drive increased adoption of USDR.
2. With Real USD, every 10% gain in property holdings results in an approximate .8% gain in yield, assuming a 8% yield on the individual property.
3. Moving the gains out of volatile digital assets and into stable, yield-producing RWAs strengthens the system and better insulates it from the cycles of the cryptoeconomy.

Example:

Sample USDR treasury composition:

• 90% RWA + DAI + LP
• 10% TNGBL

The TNGBL price doubles and new USDR is minted against the gains, turned into real estate. The new treasury composition will be:

• 100% RWA + DAI + LP
• 10% TNGBL

With this new approach, we accelerate USDR’s overcollateralization with real world assets, strengthening the system while simultaneously increasing the yield.

These new updates remove the automated burn of TNGBL in the treasury, deployed in v1. In Real USD, TNGBL appreciation is minted against and immediately moved into real estate. Any percentage gain in TNGBL is turned into an equivalent gain in real estate, keeping the allocation of TNGBL in the treasury at approximately 10%.

Conclusion

Along with a cool new name, the second deployment of USDR brings a suite of product features and system optimizations to market. These are necessary updates that:

• Strengthen the system
• Better position the product for growth
• Return greater value back to users and community
• Establish USDR as a DeFi lego that can seamlessly integrate the benefits of RWAs into any stack