We wanted to share an update with the community on the status of USDR liquidations and redemptions back to users. These liquidations are being done in combination with the ongoing buybacks of USDR which we’ve disclosed and discussed with the community in the past to further the goal of redemptions back to users.
Onchain Liquidations
As of today, eight properties have been the subject of onchain liquidations and were minted into Baskets that were sold in the liquidity pool on Pearl. The strategy we’ve been working towards is underway and picking up speed as re.al TVL continues to build.
The pool on Pearl has now hit $1M in liquidity which is the baseline TVL for setting up an Oracle that can be used to leverage Baskets on Stack. We’re working with the Oracle provider and Stack team to move this forward. With leverage available on Baskets, we hope to accelerate the onchain liquidations on re.al.
In the meantime, we plan on continuing to mint properties into Baskets and sell those Basket tokens into the pool.
We’re also working towards meeting whitelist criteria on Aerodrome and Velodrome which will allow us to use existing veVELO/AERO to incentivize liquidity pools on Base and Optimism. wUKRE has been audited and deployed meaning the Baskets assets are ready to move cross-chain when whitelisting criteria is met. We’re working with multiple parties to accelerate this process as best as we can.
Real World Liquidations
Simultaneous to our onchain liquidations, we’re also liquidating assets in the real world. These are separate properties from the assets subject to onchain liquidation detailed above.
The US portfolio is mostly under contract, with two properties that closed in August 2024 and nine more expected in early September 2024. There is one remaining property in the US which is still in the negotiation stage
Given the desire to liquidate in a timely manner, some sales may close at a loss. However, we ultimately believe we will be able to provide for the 90% redemption in stablecoins given the ongoing USDR buybacks which reduce total liabilities.
In addition to the US liquidations, we’re actively exploring offchain liquidations of select UK portfolios. We’ll share updates on this process as they’re available.
Redemption Application
The redemption contracts are in development. Once they’ve been completed and tested, we’ll send them out to a professional 3rd party audit before deployment of the smart contracts and initiation of the redemption process. Here’s an overview of our plan for next steps on the redemption application:
- Complete contracts
- Finalize mock UI
- Integrate UI with smart contracts
- Testing
- Audit + contract remediations
- Deployment
The redemption contracts currently contemplate the following process, which will take place over the course of multiple epochs, each lasting 48 hours. There will be three actions within each redemption epoch.
Step 1: Deposits
24-hours
Tangible will deposit USDC into the redemption contract. During this time, users will not be able to add new USDR to the contract. During this phase, claims from the previous epoch will be ongoing.
Step 2: Allocations
24-hours
Users will allocate their USDR to the redemption contract. The deposits from the previous 24-hours will be distributed equally amongst all USDR in the redemption contract once the allocation period is complete. During this phase, claims from the previous epoch will be ongoing.
Step 3: Claims
48-hours
As noted above, new USDC deposited during the previous epoch and allocated amongst all USDR in the contract will be available to claim once the 48-hour cycle above is complete. Claims will always be ongoing and newly deposited USDC will be available to claim every 48 hours. There’s no need to claim daily; if you’ve allocated your USDR you will continue to receive your share of the new deposits for each epoch that can be withdrawn at any time after an epoch ends. You do not need to allocate your USDR to the contract for each epoch. One time is sufficient.
Example:
- User has 1,000 USDR
- They deposit into the redemption contract and their assets constitute 1% of the total USDR in the contract
- On Monday the team deposits $1,000, after the 48 cycle, that user can claim $10, equal to their share
- On Wednesday the team deposits $100, they now have an additional $1 they can claim on Friday
- However if more users deposit into the contract and their share shrinks down to .5%, the next time $1,000 is added by the team, they will have an incremental $5 to claim
Here’s a rough mock-up of how the redemption process may work for users.
Note, these comps are still in development and just for reference. Features, details and other functionality may change through the development process.
Next Steps
We will continue to work through liquidations, both onchain and offchain. We plan to share updates on major developments to this strategy as progress is made.
Once the redemption contract audits have been finalized, we plan to share a status on redemption application deployment and the first tranche of stables to be added for redemptions. Our goal is to provide as many stables as possible during the initial few epochs.
