Reserve Rights was launched in May 2019. Nevin Freeman, co-founder of the platform has launched quite successful tech startups such as Paradigm Academy, Metamed, and RIABiz. In addition, the platform has received backing from investors such as Coinbase Ventures, co-founder of PayPal.
The Reserve Rights (RSR) token has several objectives, but the main one is to provide a mechanism to preserve the dollar value of the RSV stablecoin. The Reserve protocol was created to scale supply based on demand, thus maintaining all the collateral on the blockchain. In addition, it was also built to provide security and serve as an alternative to the centralized currencies currently in use. Therefore, cryptocurrencies managed by smart contracts are used in order to preserve their value.
What problems does Reserve Rights (RSR) solve?
The main problem that RSR seeks to address is the volatility of cryptocurrencies, as this has caused the market to expand as a medium of exchange. Traders have been reluctant to accept cryptocurrencies due to concerns that they could lose their profits during market crashes. The Reserve Protocol provides the market with a stable store of value, a medium of exchange, and a deferred payment standard.
Another problem that the creators of the Reserve Protocol wanted to solve was the service to the unbanked. Thousands of people do not have access to basic financial services. In many cases, the lack of infrastructure has made it impossible for traditional banking institutions to reach these people. Reserve Protocol aims to provide a reliable and robust trading ecosystem to these areas, with a focus on developing countries.
How reserve rights work (RSR)
The Reserve Protocol introduces an innovative way to preserve the value of your stablecoins. Specifically, when the Reserve is above its target price plus a stability margin, the system automatically auctions tokens. This lowers the supply of tokens, reducing the price. Conversely, the system buys RSV if the value falls below the target price plus a spread to increase demand.