Can Reserve kickstart its growth engine with a $20 million investment in the Curve ecosystem?

Can Reserve grow with $20M invested in Curve ecosystem?

Stablecoin developer Reserve announced last week that it will invest $20 million in governance tokens of Curve, Convex, and Stake DAO to increase the liquidity of Reserve’s stablecoin RTokens. Crypto KOL DeFi Made Here analyzed the mechanism and characteristics of RToken and believed that Reserve’s move would help promote the rapid growth of RToken’s market value and quantity.

Reserve is a platform that allows the creation of stablecoins and decentralized assets without permission. These assets are called RToken and are backed by user-defined ERC20 tokens. RToken’s collateral token supports LP yield tokens, receipt tokens, and can be over-collateralized by RSR.

Why did Reserve invest in the Curve ecosystem? RToken cannot become an exchange medium without liquidity. To ensure the wide adoption of RTokens, Reserve decided to invest $20 million to support the deployers of RToken, meaning that a portion of the revenue will be allocated to RSR stakers.

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Limitations of RToken: 1.1:1 asset support design; 2.RToken deployers do not have token emission or ponzinomics to incentivize users to mint RToken. They rely on unique use cases, organic traction, and Curve liquidity incentives from Reserve; 3.Reserve is fully dependent on the liquidity of the Curve ecosystem.

Reference: https://twitter.com/DeFi_Made_Here/status/1673727467503210497

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