Reservoir - srUSD
Reservoir is a next-generation stablecoin protocol incubated by Fortunafi that issues rUSD — an overcollateralized stablecoin backed by a diversified mix of digital assets and tokenized Real World Assets (RWAs). By converting rUSD into srUSD (Savings rUSD), users earn yield from the protocol's underlying asset portfolio with no lock-up period.
How Reservoir and rUSD work:
- rUSD is minted 1:1 against USDC, USDT, or USD1 via the Peg Stability Module (PSM)
- The protocol's reserves are deployed across DeFi lending (Morpho, Aave, Pendle) and RWAs (U.S. Treasuries) to generate yield
- Convert rUSD to srUSD (liquid savings) for daily interest accrual — no lock-up, instant redemption
- Or use wsrUSD (wrapped srUSD) for block-by-block interest accrual with zero fees
- A Credit Enforcer smart contract automatically checks liquidity, asset, and capital ratios on every transaction
- The balance sheet is overcollateralized with real-time Proof of Reserves transparency
Basic Information
Fundamentals
TVL
APR
Statistics
| Weekly | Monthly | Quarterly | Yearly | |
|---|---|---|---|---|
| Period Start | N/A | N/A | N/A | N/A |
| Period End (inclusive) | N/A | N/A | N/A | N/A |
| APR | N/A | N/A | N/A | N/A |
| CAGR (APY) | N/A | N/A | N/A | N/A |
| TVL High | N/A | N/A | N/A | N/A |
| TVL Low | N/A | N/A | N/A | N/A |
Liquidity
Not calculated yet
Liquidity analysis will be available soon
Strategy
- Mint rUSD
- Deposit USDC, USDT, or USD1 via the Peg Stability Module at a 1:1 ratio
- rUSD is a non-yield-bearing stablecoin that serves as the base token
- Alternatively, purchase rUSD on secondary markets
- Convert rUSD to srUSD (Savings rUSD)
- Deposit rUSD into the Savings Module to mint srUSD
- srUSD accrues interest daily with no lock-up period
- Alternatively, use wsrUSD (wrapped srUSD) for block-by-block accrual and zero fees
- Earn yield from diversified reserves
- Yield is generated from U.S. Treasuries, DeFi lending (Morpho, Aave, Pendle), and market-neutral crypto strategies
- Interest rate is set by governance based on protocol balance sheet conditions
- No lock-up — mint and redeem at any time
- Redeem anytime
- Convert srUSD back to rUSD at the increased exchange rate
- Redeem rUSD to USDC/USDT/USD1 via the PSM at 1:1 (subject to PSM liquidity)
- srUSD charges a micro burn fee equal to one day's interest; wsrUSD has zero fees
Yield Source
Yield is generated from the protocol's diversified reserve portfolio, which deploys backing assets across multiple yield-generating strategies. The protocol targets consistent returns regardless of market conditions.
Primary yield sources:
- U.S. Treasuries (RWA): Tokenized Treasury exposure provides a base yield floor from risk-free government debt
- DeFi lending: Reserves deployed across Morpho, Aave, and Pendle generate lending interest from borrowers
- Market-neutral crypto strategies: Algorithmic strategies that capture yield without directional market exposure
Yield characteristics:
- srUSD: Interest accrues daily; includes a micro burn fee equal to one day's interest on redemption
- wsrUSD: Interest accrues block-by-block with zero fees — more efficient compounding
- Governance-set rate: The srUSD/wsrUSD interest rate is actively adjusted by governance based on protocol balance sheet health
- Diversified sources: Combining RWA and DeFi yield reduces dependence on any single market condition
The Credit Enforcer smart contract ensures that yield distribution never compromises the protocol's solvency by automatically checking liquidity, asset, and capital ratios during every interaction.
Strategy Limits
Deterministic Constraints
- srUSD redemption incurs a micro burn fee equal to one day's interest (wsrUSD has no fees)
- Redemption depends on PSM (Peg Stability Module) liquidity — if PSM is drained, redemption may be delayed
- Interest rate is set by governance and may change based on balance sheet conditions
- Not available to U.S. residents or sanctioned jurisdictions
Probabilistic Constraints
- Reserve asset performance is not guaranteed — third-party trading strategies carry loss potential
- High redemption volumes could strain PSM liquidity, potentially causing temporary depeg on secondary markets
- RWA component introduces off-chain counterparty risk from fund managers and custodians
- Protocol is still in beta — continued development may introduce changes
Underlying Assets/Allocations
Risk Analysis
Potential Risks
Based on the official Reservoir risk documentation, the following risks are associated with rUSD:
- Insufficient Reserves Risk - No guarantee that reserves will be sufficient for all holders to redeem rUSD at 1:1; fund insolvencies could leave holders unprotected
- Investment Strategy Risk - Third-party asset managers deploy reserves into trading strategies with no success guarantee; high loss potential from derivatives and leverage
- Redemption Cascade Risk - High redemption volumes could trigger feedback loops where liquidating positions depresses secondary market prices, driving further redemptions
- Smart Contract Risk - Contracts may contain vulnerabilities or bugs that could be exploited for asset theft; remediation of deployed contracts is complex
- Depeg Risk - No guarantee that rUSD will always trade at $1 across all platforms; secondary market price may fluctuate
- RWA Counterparty Risk - Tokenized real-world assets introduce off-chain counterparty, custodian, and legal jurisdiction risks
- Governance Risk - DAM token holders make collective decisions with no single party ensuring adequate response to emergencies; governance decisions may negatively impact users
- Regulatory Risk - Not available to U.S. residents; evolving regulations could impair protocol operations or restrict access in additional jurisdictions
Risk Analysis (3rd Parties)
Summary
Reservoir's rUSD offers a diversified stablecoin yield strategy combining U.S. Treasuries, DeFi lending (Morpho, Aave, Pendle), and market-neutral strategies. The Credit Enforcer provides automated solvency checks, and real-time Proof of Reserves ensures transparency. The Halborn audit found issues that were mostly addressed. However, the protocol is still in beta, explicitly disclaims redemption guarantees, and relies on third-party asset managers with no success guarantee. Reserve deployment into derivatives and leveraged strategies carries inherent loss risk. Users should consider the protocol's beta status, geographic restrictions (non-U.S. only), and RWA counterparty exposure when sizing positions.
See the Halborn audit report: "Reservoir Protocol Security Assessment"
Halborn Audit: FortunaFi engaged Halborn for a security assessment of the Reservoir smart contracts. Findings were mostly addressed by the team. The protocol intentionally uses battle-tested older library versions (Chainlink 1.11.0, OpenZeppelin 4.8.1) for reliability over recency.
Credit Enforcer: An automated smart contract enforces financial covenants on every transaction — checking liquidity ratios, asset ratios, and capital ratios. Transactions that would compromise protocol solvency are automatically reverted.
Diversified Reserves: The protocol combines uncorrelated assets — U.S. Treasuries (RWA), DeFi lending yields, and market-neutral strategies — reducing single-asset collapse risk. Real-time Proof of Reserves provides continuous transparency.
No Redemption Guarantee: Per official documentation, "there is no guarantee that the Reserves will be sufficient to enable holders to redeem all Protocol Tokens on a 1:1 basis." High redemption volumes could create liquidity crunches and feedback loops.
Third-Party Asset Manager Risk: Reserves are deployed through third-party asset managers using trading strategies. The protocol explicitly states "no guarantee or representation is made that the Trading Strategies will be successful," and unsecured deposits lack deposit insurance.
Beta Status: The protocol is currently in a beta state and remains subject to further development and modification. There is no assurance it will function as intended. The governance model through DAM tokens is still evolving.