Overview
Resupply, which was developed jointly as a new SubDAO of Convex Finance and Yearn Finance, is a decentralized stablecoin protocol that introduces reUSD, a groundbreaking stablecoin backed by collateralized debt positions (CDPs) and powered by the liquidity and stability of lending market vault tokens. What makes reUSD unique is its foundation: it’s a stablecoin backed by yield-bearing lending pool tokens. These tokens are essentially stablecoins that generate fees from different lending markets.
With Resupply, users can lend their stablecoins, earn underlying lending fees, and borrow reUSD to explore other DeFi strategies or manage everyday expenses. Alternatively, they can use their borrowed reUSD to supply more stablecoins into their chosen lending markets, leveraging their position with minimal liquidation risk. This low risk is again achieved through the use of stable lending vault tokens as collateral for reUSD.
The borrow rate for reUSD will be very predictable and always remain relatively low. The rate for reUSD will be determined as the greater of the following three options: half the underlying lending fee rate, half the “risk-free rate,” or 2%, whichever is greater. The “risk-free rate” will be defined by using the current APY of sfrxUSD.
Thanks to the inherent stability of the collateral, Resupply can offer a higher-than-average loan-to-value (LTV) ratio for borrowing reUSD. This combination of high LTV, low borrow rates, and yield-generating collateral makes Resupply an ideal platform for executing effective leverage strategies.
Resupply will offer a built-in leverage looping feature right into the protocol, allowing users to select a desired lending market and a target leverage amount. This leverage mechanism is designed to boost yields significantly, providing an efficient and powerful way to maximize returns on stablecoin positions while maintaining stability and minimizing liquidation risk.
Which Lending Markets will Resupply Support?
At launch, Resupply will support lending pool tokens from Curve Lend (LlamaLend) and FraxLend. LlamaLend tokens will be automatically staked on Convex Finance, earning users additional boosted rewards in the form of CRV and CVX tokens. In the future, Resupply can expand its support to other lending markets, with these new additions determined via a governance vote.
RSUP Token distribution
The RSUP governance token has no maximum supply and has a planned inflation schedule. RSUP emissions will be directed towards three main categories: Vote Incentives, the Insurance Pool, and the CDPs (Borrowers). The distribution percentages are adjustable via governance vote, with the initial split being 50% for vote incentives, 25% for the Insurance Pool, and 25% for the CDPs.
The emissions allocated to CDPs are directly correlated to the revenue each lending pool generates in borrow fees. Lending pools that contribute more fees to Resupply will receive a larger share of the CDP emissions allocation. This is all handled algorithmically and designed to reward lending pools that generate more fees to Resupply.
Vote Incentives
As stated above, a portion of RSUP emissions will be allocated towards voting platforms such as Votium and yBribes, to encourage on-chain liquidity for reUSD and RSUP tokens. The team will strategically direct these incentives toward liquidity pools that provide the greatest benefit to Resupply’s liquidity.
Revenue Generation
Resupply generates revenue through redemption fees and borrow rate fees. These protocol fees are distributed to RSUP stakers, the Insurance Pool, and the Resupply Treasury, with the fee split being adjustable via a governance vote.
Convex & Yearn Finance will permanently stake their share of RSUP tokens for voting rights and protocol revenue.
Staking RSUP Tokens
By staking RSUP tokens, users can earn platform fees in the form of reUSD and gain voting power in Resupply governance. Withdrawals from staking can be initiated at any time, but they are subject to a 7-day delay before RSUP tokens become available for withdrawal.
Prisma Finance
Prisma Finance was originally integrated into the Convex Finance and Yearn ecosystems. However, following the hack of the Prisma Finance migration contract, the protocol never truly recovered. As such, a proposal will be submitted to shut down Prisma Finance and invite the Prisma community to join us at Resupply.
To show our appreciation for the Prisma community, Prisma Finance token holders will be eligible to claim RSUP tokens. The claim process will be outlined in more detail later, but you don’t have to worry about a snapshot date for an airdrop. Prisma, cvxPrisma, and yPrisma tokens are directly convertible for a vesting allocation of RSUP tokens, and there is no deadline or time limit for doing so. For those with locked vePrisma, there is a penalty enforced when locks are broken. To encourage users to break their locks, an airdrop will be created to award users with the amount of RSUP corresponding to the lock break penalty they incurred. To qualify, the lock break must be performed during the snapshot period starting 18 December 2024 at 00:00 UTC until 1 week after the official launch of the protocol.
Conclusion
Resupply’s CDP-based architecture is a key innovation that differentiates Resupply from other stablecoin projects. The RSUP token emissions and revenue distribution mechanisms are designed to incentivize participation and align stakeholder interests. To learn more about Resupply’s upcoming launch, visit our official website or explore our recently published documentation here. You can also stay updated by following us on X at @ResupplyFi and Discord.