Decentralized stablecoin protocol Reserve has launched on Coinbase’s incubated Layer 2 network Base, its first implementation outside the Ethereum mainnet, a statement said. The protocol has a total value of $24 million on Ethereum.
This move allows users to create their own “RTokens” – decentralized stablecoins, flatcoins (tied to the cost of living), or tokenized indices – using Reserve’s Asset Backed Currency Factory on the lower-cost Layer 2 network. These assets are backed by over-collateralized baskets of Ethereum-compatible ERC-20 tokens.
Reserve’s collateral options on Ethereum and Base include major stablecoins, ether and wrapped bitcoin, on their own or in yield-bearing form from protocols such as Compound, MakerDAO, Aave, Convex, Curve, Morpho and Flux Finance, the project said.
“DeFi should expand well beyond a few thousand power users,” Reserve told The Block via email. “Base’s lower fees will allow people interested in using stable coins that yield returns to actually use them without all the benefits being offset by gas costs.”
Reserve Expands RTokens to Basic
The first RToken on Ethereum, Electronic Dollar (eUSD), was introduced in February by global payment app Moby for private transactions.
During Silicon Valley Bank’s tumultuous 2023 run, eUSD was severely tested when Circle’s USDC stablecoin reserves, housed at the bank, plummeted from $1 to 88 cents. The decentralized “self-healing” mechanism of eUSD kicked in, recapitalized autonomously and returned to the $1 peg without relying on regulators or bank guarantees. This self-healing feature is inherent to all RTokens, Reserve said.
According to the team, the first RToken implementers on Base are expected to launch in the coming weeks.
Reserve joins a series of protocols deployed on Base since its public launch in August, including Uniswap, SushiSwap, Compound and Chainlink.
Last week, real-world asset project Backed released a tokenized security product on Base that tracks a short-term iShares US Treasury Bond ETF.