Summary
Add the wstUSR-long LlamaLend market with vault address 0x01144442fba7aDccB5C9DC9cF33dd009D50A9e1D, allowing users to mint reUSD and leverage supply to the market.
Set the market with a max 95% LTV, 5% liquidation fee, and 10m reUSD max borrow.
wstUSR Overview
Resolv Labs takes a new approach to the delta-neutral synthetic dollar market by offering a dual-token model. Users can mint USR (senior-tranche stablecoin) or RLP (junior-tranche insurance pool token) from USDT, USDC, DAI, or USDe. USR and RLP differ in their risk profiles. USR is designed to be a low-volatility, stable asset, while RLP acts as an insurance layer for USR and receives a larger share of protocol revenue in return for taking on additional risk.
USR is an ERC-20 token pegged to the US Dollar and collateralized with ETH, ETH LSTs, BTC, and stablecoins. See the protocol dashboard for detailed composition of the reserve backing. Its design involves management of delta-neutral strategies that employ short perpetual future positions to counteract collateral volatility and maintain price stability. Funding rates and staking rewards serve as the primary yield generation for Resolv.
USR can be staked for stUSR, a yield-bearing variant of the stablecoin. The value of each stUSR matches USR, yet the number of stUSR tokens grows over time through rebasing. Alternatively, users can wrap their stUSR to wstUSR. wstUSR is the non-rebasing ERC-4626 token version of stUSR with accumulating value. Unstaking is possible at any point on a one-to-one basis without delay. Whitelisted users can redeem USR for the equivalent USDC, or USDT with up to a 24 hour delay.
RLP absorbs losses related to Resolv’s hedging strategy, such as adverse funding rate movements, and receives a greater proportion of yield for assuming this increased risk. Surplus collateral backs RLP, with each token’s price tied directly to the amount of ETH collateralization. The collateral backing RLP ensures that USR remains overcollateralized.
Resolv promises highly competitive redemption times compared to competing products. Typically delta-hedging synthetic dollars impose a cooldown period on unstaking or redemption to allow a buffer period for positions to be closed. stUSR, by contrast, can be instantly redeemed for USR. USR itself can be redeemed instantly up to $5m per day with a 24 hour redemption period for amounts greater than $5m per day. Factors contributing to the redemption efficiency are higher average overcollateralization than competitors and segregation of risk tranches with the availability of the RLP insurance pool.
Recently a gauge vote was passed to enable CRV emissions for the wstUSR-long Llamalend market. Additionally, Resolv Labs has an incentive program that is currently in season 2. The program uses points to reward users who interact with and utilize Resolv products. Resolv’s token, RESOLV, is the main reward to users and is slated to launch on May 27th, 2025. More information on Resolv Points can be found here.
Resolv enjoyed rapid TVL growth at its inception, but recently declined to $425M upon season 1 ending and as delta-neutral strategies became less profitable in the early part of 2025.
Source: DefiLlama, Date: May 26th, 2025
The average APR for stUSR is 8.74% which remains a competitive rate for yield-bearing stablecoins. stUSR has experienced notable yield volatility ranging from ~19.5% in November 2024 to ~3.5% in March 2025.
Source: Resolv Labs, Date: May 26th, 2025
The USR Collateralization Ratio currently stands at 163% and has stayed steadily above 110%, always ensuring a buffer for USR.
Source: Dune, Date: May 26th, 2025
wstUSR Risks
LlamaRisk has previously published risk assessments of wstUSR and USR on behalf of Aave as part of their collateral onboarding process.
Resolv has also compiled a list of risks involved in using their protocol, available here.
Key risks and mitigations include:
- Counterparty Credit Risk
- Risk: Insolvency of a perpetuals venue could lead to significant losses.
- Mitigation: Use of reputable custodians (CEFFU, Fireblocks), diversification across venues, and the RLP insurance pool. The protocol may still experience losses in unrealized PnL in case of exchange insolvencies.
- Market Risk
- Risk: Negative funding rates for perpetual futures positions may erode capital.
- Mitigation: Use of highly liquid venues, and reliance on RLP to absorb volatility loss. This mitigation involves trust in the Resolv team to properly manage backing assets.
- Liquidity Risk
- Risk: Mass redemptions could lead to insolvency of USR or RLP.
- Mitigation: Protocol enforces a safeguard whereby RLP redemptions are suspended if USR’s collateralization ratio falls below 110%, preserving stability and solvency.
Market Configuration
LlamaRisk has deployed the wstUSR Llamalend market. Given here is our rationale for the market configuration and recommendation on a suitable debt ceiling for the market.
Parameters
| Parameter | Value |
|---|---|
| A | 300 |
| AMM Swap Fee | 0.2% |
| Liquidation Discount | 1% |
| Loan Discount | 1.3% |
| Max LTV | 98% |
The market has been instantiated with the same market parameters as the sUSDS-long market in prod. USR is a relatively new product with a short history available to refine specific attributes of this asset. However, given wstUSR has favorable redemption efficiency compared to other delta-hedging synthetic dollar protocols, the assumption of stable peg performance in normal protocol operation is reasonable.
For reference, we have run an optimization analysis for USR, which can be found below. The analysis suggests that the market can support more aggressive parameterization based on its market history. However, borrower losses are well contained at A=300 and we add additional buffer to the liquidation discount (1% instead of 0.5%) to allow for arbitrage in case of peg instability.
Monetary Policy
| Parameter | Value |
|---|---|
| Min Rate | 0.1% |
| Max Rate | 35% |
The market uses Semilog Monetary Policy, the current standard for LlamaLend Markets. This policy uses a polynomial curve based on the market utilization and the min/max rates set by governance. The parameter config has been set with a somewhat higher max rate compared to other yieldbearing stable markets (35% instead of 25%) and is intended to exceed the expected yield on the underlying, thereby protecting lenders against market illiquidity. While the all-time average staking APR is 8.68%, it has historically high yield volatility, at times reaching over 20%.
Oracle
The oracle used in LlamaLend markets is a critical dependency and typically employs one or more Curve pool price oracles to derive a market price for the underlying. The wstUSR oracle contract can be found here.
The oracle for wstUSR was deployed with a proxy, allowing the Curve DAO to set a new oracle implementation.
The underlying pools and contracts used in the oracle include:
- USR/USDC: $3.5m TVL
- USDC/crvUSD: $19.5m TVL
- wstUSR vault
- crvUSD price aggregator
Resolv have indicated an intention to maintain the USR/USDC pool as a primary liquidity venue so that it will be a reliable oracle source for the foreseeable future. Note that this oracle configuration assumes that wstUSR maintains a peg to USR- this is considered a reasonable assumption because wstUSR can be instantly unstaked. In case an unstaking cooldown is introduced, this assumption would not hold true and may necessitate switching the market’s oracle source.
The use of aggregated price of crvUSD improves the resiliency of the market to instances of transient crvUSD depeg in the constituent pools. This reduces the probability that users can be liquidated as a result of crvUSD price deviations. Older LlamaLend markets do not include aggregated price of crvUSD, but it is now a standard for all future markets deployments
Debt Ceiling
"market": wstUSR-long
"liquidation_discount": 10000000000000000, # i.e. 1%
"loan_discount": 13000000000000000, # i.e. 1.3%
"amm_a": 300,
The most conservative quote here would be answering the following question:
How much wstUSR needs to be sold into crvUSD to realise a price impact of 1%
As of 02:30 UTC May 30 2025, the liquidity was increased and estimated as the following:
5,000,000 wstUSR needs to be sold against USDC to realise a price impact of 1%
Since the unstaking is instant, USR can also be considered. Note that the introduction of an unstaking cooldown would break our assumption of a safe debt ceiling.
As of 02:30 UTC May 30 2025, the liquidity for USR against USDC is estimated as the following:
6,000,000 USR needs to be sold against USDC to realise a price impact of 1%
Total usable liquidity results in ~11,400,000 crvUSD @ 1.0849 wstUSR<>USR exchange rate and @ 1 USR<>crvUSD exchange rate.
The max LTV range comes out as 90.37%-98.33%. Considering an average aggressive overcollateralization of 106%, the debt ceiling comes out as 11,400,000/1.06 = 10,755,000 crvUSD.
With the above debt ceiling, the market will be able to absorb 100% of debt positions all at once, even at a 100% debt ceiling utilization. 100% market utilization is never seen, and it is a conservative assumption.
If we assume a target utilization of 80%, the debt ceiling can be increased to ~13,400,000 crvUSD.
With the LLAMMA soft-liquidation mechanism in place, collateral will gradually be swapped into crvUSD, reducing the overall collateral getting released in the market due to liquidation. This means that, in reality, the market is likely to tolerate higher debt levels. The initial conservative quote allows for a scaled onboarding to observe borrower behaviors in the market.
As USR is a less mature asset compared to previous collateral types onboarded to Resupply, we suggest applying a handicap to this value and consider increasing the ceiling after observing stability and healthy liquidity trends for some time. Therefore we recommend an initial debt ceiling of 10m reUSD.
Disclaimer: LlamaRisk has not received any compensation for this proposal and we present it to Resupply in our capacity of providing integrations support for Curve DAO. As with any onboarding, Resupply stakeholders are encouraged to conduct their own due diligence.