Hey, all you #RSR holders! Don't let the new protocol FUD scare you: it's the best thing it could have happened to RSR holders. Let me explain it:

In the old protocol, if RSV was trading below $1, for example, $0.99, you bought it and redeemed the collateral. You now have $1 for the price of $0.99, effectively getting 1 cent for doing nothing.

If RSV was trading above $1 for example, $1.02, you, as an #RSR holder, had the right to purchase RSV from the protocol at 1 dollar.

You give the protocol 1 dollar worth of RSR, the RSR is burned and the protocol gives you 1 RSV. You inmediately sell that RSV for $1.019

Of course, this meant that RSR was burned. Was RSR deflationary under the old protocol? Yes, but no. Let me explain.

In the event of a collateral default, AKA one of the backings of RSV goes to $0 or near $0, the protocol would mint RSR out of thin air. But, remember...

... that when the protocol sold RSR, it wouldn't have sold all of the RSR at the same price, but it would have sold it lower each time to fill the bids. This is the same that happens when a whale makes a huge market sell.

So, now the price of RSR is on the floor and you hold less % of the whole RSR supply because the protocol minted new RSR out of nothing. This could have possibly negated the effect of years of burning, putting us back to square one.

This is where the new protocol comes in.

In the new protocol, if RSV is trading below $1, you do the same as in the previous protocol. You buy it, redeem the collateral and get free money. Easy. But, it changes when RSV is trading above $1.

When RSV is trading above $1, the protocol takes the profits and mints new RSV, but instead of giving RSR holders the rights to buy them, it gives the profit directly to stakers.

But what is staking in this new protocol?

Staking means insuring RSV in the case of a collateral default in RSV backing, in exchange of the revenue of RSV. If a collateral goes to 0, a portion of RSR is grabbed from the stakers and that RSR is sold to buy another collateral so RSV remains, well, stable in value.

Another thing is that this new version of the protocol introduces the RToken ecosystem.
That means that anyone can create a stablecoin, and pay RSR stakers a percentage of that RToken revenue. Every RSV in this thread could be replaced by another RToken of your choice!

You can decide in which stablecoin you want to stake your RSR. Maybe a well established, low risk stablecoin with average yield or a riskier stablecoin with great yield. That's up to you.

Now, in what currency do you get paid in staking? That would be up to you, too.

If you stake your RSR in RSV, well, you could get paid in RSV if you wish. But, if you wanted to be paid in RSR, the protocol would buy RSR with the RToken profits you got, effectively meaning that there would be a constant buy pressure in RSR.

And, not only that, but the more RSR is staked, the less liquid RSR supply becomes, i.e. RSR becomes scarcer. And you know what a scarcer RSR means...

I hope this thread helped you understand the new protocol, and if you have any questions, let me know!


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