SDGP-24 SDT <> RSR Token Loan with Reserve Protocol Core Team


This proposal details a proposed $500k Token Loan between StakeDAO and the Reserve Protocol Core Team denominated in SDT and RSR (Reserve’s Governance Token) following StakeDAO’s launch of the USDC+ RToken on the Reserve Protocol. The objective is to further entrench the StakeDAO<>Reserve Protocol Partnership and ensure long-term alignment between the projects.


The Reserve Protocol (reserve dot org) is a free, permissionless platform on Ethereum mainnet to build, deploy and govern asset-backed currencies referred to as “RTokens.” RTokens are always 1:1 asset-backed, allowing for permissionless minting and redeeming on-chain by users without the need for any middlemen. Overcollateralization is provided by RSR token stakers. Each RToken can have an entirely different governance system and is governed separately by ecosystem stakers. The Reserve Protocol launched on Ethereum mainnet in Oct 2022 and completed its fifth audit in Feb 2023.

StakeDAO has launched the USDC+ RToken as a community-governed and diversified yield-bearing USDC basket. It aims to optimize yield to holders and mitigate default risk with overcollateralization, enabling holders to grow and preserve their wealth. USDC+ is 1:1 asset backed by a basket of other yield bearing USDC. As with all asset-backed currencies created on the Reserve protocol, USDC+ is overcollateralized and with auditable proof of reserves available on-chain 24/7. The distribution of the yield generated by the basket of USDC+ assets is distributed as follows: 80% to RToken holders, 10% to RSR Stakers, 10% to Liquidity Maintenance with the purpose of being perma-locked as sdCRV.

RSR holders who stake on USDC+ can participate in the governance of the RToken and earn a portion of yield that is directed towards stakers.

Reserve is an active participant in the StakeDAO ecosystem:

  • Largest holder of sdCRV with 12,800,594
  • Significant amount of SDT locked with 277,327
  • Currently buying veBOOST - spent 196,206 SDT to accumulate 2,632,944 veBOOST since 9/15/2023.


The SDT-RSR Token Loan will incentivize long term alignment on the USDC+ RToken. StakeDAO will use RSR to participate in governance for USDC+ and earn yield passively while Reserve will max lock SDT to further increase their StakeDAO voting power and boost rewards for the USDC+ and other RToken Curve pools to increase liquidity.

While Reserve Core Team has been buying veBOOST, It is difficult to get max boost with veBOOST given market liquidity.

Adopting this proposal is expected to provide dual benefits of StakeDAO being able to hold significant governance power over their newly launched USDC+ RToken while Reserve can use its voting power to improve the liquidity of USDC+.

Implementation Details:

The Loan will be conducted with $500k worth of SDT and RSR respectively via a shared multisig with a trusted third party. Either party has the option to end the Loan with 30 days notice, after which all funds need to be returned. The same amount of SDT and RSR shall be returned that was initially locked up, regardless of any appreciation or depreciation of the assets, but each staker shall receive any yield from staking the asset they receive in the Loan. In the event of a depeg of USDC+ or other RTokens that StakeDAO chooses to stake upon, and some or all of the RSR being staked by StakeDAO is liquidated, StakeDAO is still responsible for returning the amount of RSR that it received in the temporary swap once the swap is terminated. veSDT will be continually relocked for max voting power. StakeDAO and the Reserve Protocol Core Team both agree not to stake more than 20% each of the total staked RSR on USDC+ and will start at 5m worth of RSR each. StakeDAO can stake additional RSR on RTokens for yield while USDC+ is growing, but shall not exceed the 20% staking threshold.

Both Reserve Protocol Core Team and StakeDAO agree not to sue the third party for any reason.


Human resources: Minimal developer time needed

Treasury resources: TBD

Technical Implementation: StakeDAO and Reserve will each create a 3/5 multisig with the following signers:

  • StakeDAO Multisig
  • StakeDAO Core Team EOA
  • Reserve Core Team Multisig
  • Reserve Core Team EOA
  • Trusted Neutral 3rd Party

Proposal specifications:

Admin: veSDT holders

Community feedback: 2 days minimum

Voting Duration: 5 days

1 Like

Thanks a lot Thomas !
Quick comment and context on this proposal for the community.

  • Reserve is the biggest holder of sdCRV, and the bigger user of Stake DAO. Due to the difficulty to reach a good boost with an 8m sdCRV bag, the last batch of CRV could have gone to Yearn, but Reserve decided to still go with sdCRV, hoping they find a solution to increase their boost. They have been buying millions of veBOOST, but struggle engaging in a 4 year lock. Now the boost market is very shallow, and they need more boost to maintain at least a 1:1 vote ratio.

  • In my personal opinion, Reserve is bringing a lot of value to Stake DAO through their massive support, which justifies going the extra mile for them.

  • Furthermore, we built with Reserve’s help and support, USDC+, a proof of concept of a stable coin managing its own liquidity with Stake DAO liquid lockers. With the votes received thanks to this veSDT token loan, Reserve will vote to support the liquidity of USDC+, and with our RSR collateral, Stake DAO will receive fees from USDC+. Sounds like a win-win. Of course, our RSR collateral is at risk in case of depeg, but since USDC+ is backed by USDC, it cannot depeg from USDC unless one of Curve, Morpho, Aave, Compound or Flux get hacked, so the risk is lower than on other rTokens.

With all this in mind, I support the proposal.

1 Like

Now comes the question of “How?”

The techincality of the loan is fairly simple and has been explained by Thomas. Need to find the trusted 3rd party.
But the main question is where do we find those SDT? The multisig currently has 1.6m SDT so that should do the trick. But we could also decide to mint them, to keep a certain balance of SDT in the multisig. TBD.

1 Like

looks like everyone seems to agree, we will therefore move this topic to voting

Hi everyone!

What is the current state of this huge proposal?

I want to share my thoughts about this topic

Big thanks for the Reserve protocol to join the Herd and be so active in locking CRV in sdCRV, buying veBOOST and lock almost 300k SDT. It really helps pushing StakeDAO to a new level. StakeDAO USDC+ token is a hidden gem with a nice competitive strategy behind. I believe future collaboration is very important and win-win for both DAOs.

But :slightly_smiling_face:

500k USD SDT loan is so huge in current conditions. SDT price is on sale now and it is something about 2m SDT. This lock will have a huge impact on everyone veSDT holder and everyone’s current boosts.

Most of current veSDT holders earned SDT or bought from the market when SDT price cost more then now. veSDT holders understand full power of veSDT and potential fair price of SDT. And it is a little be unfair when someone receive veSDT power in so great conditions and others not able to execute same opportunity.

Maybe it is possible to balance the proposal more to make current (long time) veSDT holders a little bit less sad. veSDT holders happy when fees grows, when SDT price grow, when more sdtokens minted.

Less RSR for StakeDAO and lets say 100k-300k SDT buy from the open market will address the SDT price part.

More CRV in sdCRV from Reserve on a continuous basis will address fees and minting part.

Could this proposal be adjusted and balanced more, please