Cryptocurrency and stablecoin protocol Reserve is investing $20 million in governance tokens of yield farming apps Curve (CRV), Convex (CVX), and Stake DAO (SDT), according to an announcement on June 20. The investment aims to increase the liquidity of Reserve’s stablecoins, called RTokens. It will also increase Reserve’s voting power within the governance systems of these applications. Here are the details…
Reserve will invest in these cryptocurrencies
Reserve is a stablecoin protocol that allows users to create their own coins backed by any asset they want. Electronic USD (eUSD), High-Yield USD (hyUSD), Reserve (RSV), Reserve Dollar (RSD), and ETH+ are a few examples of stablecoins created through Reserve. Prior to the announcement, Reserve was the seventh largest Convex token holder after Mochi, Redacted, JPGd, Badger, Clever and FRAX. The protocol earned these tokens by using Convex extensively to generate returns for its users.
The Reserve team noted that this new $20 million investment could enable new features for RTokens, such as “collateralized loans, wallet products, tokenization of real-world assets, and more transparent fintech systems.” The protocol’s highest market value coin, eUSD, is backed by the dollar derivatives of Compound and Aave. It has a market cap of over $20 million and a daily trading volume of around $500 million. The team claims that eUSD has traded over $5.7 billion in cumulative volume due to its use in RPay, the Android and iOS payment app often used for remittance, shopping and payroll in Latin America.
High-Yield USD, the protocol’s second highest market cap coin, is backed by a basket of dollar derivatives through Convex and Flex Finance. The $20 million investment could be good news for CRV token holders, as CRV hit a one-year low on June 15. The new low was partly attributed to the controversy over Aave loans allegedly taken by Curve’s founder.
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