Summary
This proposal introduces a new savings product, Savings reUSD (sreUSD), alongside updates to Resupply’s interest rate model and fee distribution system. The goals are to grow reUSD demand, reward long-term holders, and improve peg stability through dynamic fee mechanisms.
Key changes:
- Deploy sreUSD as a new ERC-4626 staking vault
- Introduce dynamic rate adjustments based on reUSD’s peg
- Update protocol fee splits to allocate a portion of protocol revenue to sreUSD
Motivation
Resupply is committed to maintaining predictable and sustainable fees while enabling protocol growth. The introduction of sreUSD supports this mission by:
- Incentivizing long-term reUSD holders with yield
- Creating new integration opportunities across DeFi
- Encouraging peg stability through rate-based feedback
- Preserving the integrity and purpose of the Insurance Pool
sreUSD is not a replacement for the Insurance Pool. It is a growth-oriented product built around protocol revenue, designed to attract new demand and integrations.
Specification
1. Deploy sreUSD
- Standard ERC-4626 vault with auto-compounding reUSD yield
- Yield is sourced from total weekly protocol revenue and streamed to vault depositors
- No cooldowns, lockups, or penalties
- No emissions or extra reward tokens
- Native LayerZero bridging support
2. Peg-Based Dynamic Interest Rates
A new interest rate calculator will be deployed across all reUSD pairs. It will include a priceWeight multiplier that adjusts borrowing rates based on how closely reUSD tracks its peg:
- Interest will continue to be calculated based on underlying lending interest, sfrxUSD interest, and a constant 2%
priceWeightis used to determine how much of the underlying interest or sfrxusd interest should be used as fees. Previously, this was a flat 50%. Going forward it will be a range between 50% (on-peg) and 60% (off-peg).- As the reUSD peg approaches 1, interest rates decrease back to the base 50% of underlying/sfrxusd interest rates.
- As the price falls below peg, rates increase to a max of 60% of underlying/sfrxusd interest rates.
- The rate adjustment is bounded by configurable min/max thresholds (ie. How much of the underlying/sfrxusd rates should be charged as fees)
This mechanism increases fees during periods of peg instability. The additional revenue it creates is distributed as yield to sreUSD.
3. Updated Revenue Splits
Revenue splits will have the following “baseline”.
| Recipient | Baseline Split |
|---|---|
| Staked RSUP | 70% |
| sreUSD | 15% |
| Insurance Pool | 10% |
| Treasury | 5% |
Additional revenue generated from the new off-peg mechanic described above will be processed first and sent to sreUSD. The remaining revenue will then be split amongst the various targets and their weightings in the table above.
Note that sreUSD will receive both off-peg fees AND a share of the baseline revenue.
Example:
At the conclusion of epoch X:
- the time-weighted price of reUSD was $0.992
- sfrxUSD yield was 10% and was higher than all underlying lending rates
- 80k reUSD was collected via interest
- 20k reUSD collected via redemptions
This means the effective interest rate during this period was 58% of sfrxUSD, or 5.8% (5% base + 0.8% off-peg). This allows us to compute the following two components:
- base interest fees (5%): ~68.96k
- off-peg fees (0.8%): ~11.03k
Therefore 11.03k reUSD is immediately allocated to sreUSD and the remaining 68.96k interest fees + 20k redemption fees are pooled and split according to the ratios above.
In this example, the final distributions would be as follows
| Destination | Amount |
|---|---|
| Staked RSUP | 62.27k |
| sreUSD | 24.37k (13.34k + 11.03k) |
| Insurance Pool | 8.89k |
| Treasury | 4.44k |
| Total | ~100k (80k interest + 20k redemption) |
Rationale
- Growth without dilution: sreUSD drives new demand and intergrations without emission allocations
- Aligned incentives: Dynamic fees provide incentives for holding reusd and using it across the broader DeFi ecosystem
Next Steps
- Audit and deploy the
sreUSDvault and related contracts - Update Controller with new fee split configuration
- Replace all existing
InterestRateCalculatorcontracts with the the new dynamic version - Coordinate integrations for sreUSD with platforms like Pendle, Spectra, and CurveLend
