Resolv Stablecoin: How USR Maintains the Dollar Peg
What Is Resolv?
Resolv is a decentralized finance protocol built around a crypto-backed stablecoin called USR. Rather than relying on fiat reserves, USR uses Ether (ETH), staked ETH and Bitcoin (BTC) collateral plus hedging and an insurance layer to keep its value close to one US dollar. For DeFi users and builders this offers an alternative design that prioritizes on-chain collateral, market-neutral risk management and distributed governance.
How USR is Backed and Redeemed
USR can be minted or redeemed against approved crypto collateral at a 1:1 rate. The system relies on on-chain ETH, staked ETH derivatives and BTC to back issued USR. Key features include:
- Full crypto backing: USR is supported by ETH and BTC held on-chain.
- Overcollateralization via insurance: A secondary pool provides extra buffers above the direct backing.
- Yield option: USR holders can stake their tokens to receive stUSR, a yield-bearing variant.
- Peg maintenance: Price alignment is encouraged through redemption mechanics and arbitrage incentives.
Delta-Neutral Hedging: Using Futures to Stabilize Value
To limit exposure to ETH and BTC price swings, Resolv implements a delta‑neutral approach using perpetual futures. The protocol opens short positions so that gains or losses in the spot collateral are offset by opposite moves in the futures positions. This reduces direct USD volatility for USR.
Hedging is executed across multiple trading venues to avoid concentrating risk on any single platform. The system also uses dynamic collateral limits and custodial arrangements to manage counterparty and operational exposure.
The RLP: An Insurance Layer for Market Shocks
The RLP (Resolv Liquidity Pool) functions as a protective layer for USR. It holds surplus ETH and BTC above what’s needed to back USR and is intended to absorb large market losses or counterparty failures.
Important characteristics of RLP:
- It acts as a buffer against extreme volatility and exchange-related risk.
- RLP token holders take on extra systemic risk and are compensated with higher potential yields.
- RLP tokens are mintable and redeemable with supported collateral, and their value can vary with the protocol’s health.
- If the buffer thins, the design seeks to attract more collateral by increasing yields, helping the pool recover.
How Revenue is Generated and Shared
Resolv aims to create steady income through a combination of ETH staking rewards, funding fees earned from perpetual futures positions, and active collateral optimization. These revenue streams are allocated every day across distinct channels:
- Base rewards: Paid to both stUSR holders and RLP participants.
- Risk premium: Additional compensation reserved for RLP holders who accept greater downside exposure.
- Protocol fees: Set aside for ongoing development and operational needs.
Crucially, losses from derivative funding or hedging are designed to be absorbed by RLP rather than by USR, helping preserve the stablecoin’s peg under stress.
RESOLV Token
The native token, RESOLV, provides governance rights and access to protocol rewards. Holders can stake RESOLV to receive stRESOLV, which enables voting on proposals and unlocks reward multipliers. Longer lock-ups typically earn larger boosts to encourage committed participation.
Token supply and distribution highlights:
- Total supply: 1,000,000,000 RESOLV.
- Allocations: 10% reserved for early distribution campaigns, 40.9% for ecosystem incentives, 26.7% for team and contributors (vested), and 22.4% for investors (vested).
The Appeal and The Risks
This model is attractive to users seeking a stablecoin that remains within the crypto asset ecosystem rather than relying on fiat reserves or central issuers. Its layered defenses—collateral backing, derivative hedging and an insurance pool—are intended to reduce peg volatility while offering yield opportunities.
However, the approach introduces complexity and dependencies: effective hedging requires liquidity and proper risk controls, and the system relies on derivative markets and custody arrangements that can carry counterparty or operational risk. Prospective users should weigh these trade-offs and understand how profit and loss are allocated within the protocol.
Conclusion
Resolv offers a unique approach to the stablecoin challenge. By using ETH and BTC as collateral, implementing a market-neutral hedging strategy, and building a dedicated insurance pool, it aims to deliver a stable, decentralized, and transparent alternative for the DeFi ecosystem. Through its USR and RESOLV tokens, the protocol provides a powerful combination of stability, yield, and community governance.