Reserve Adoption Update

648,061 users, Adoption, GitHub, Audit, On-chain assets, Circulating supply — option 1.

Welcome again to the unofficial weekly round up of things Reserve related. This week I’m going to focus on a couple of new areas — one being the emergence of traditional financial assets to DeFi and a general look around at real-world crypto themes, the other is the mysterious circulating supply, unlocks or ‘custody transfers’ as we might call them and something about 3%. This and of course all the old favourites.

  • Memory lane
  • Socials
  • Adoption
  • GitHub / Audit
  • RWA
  • Circulating supply / option 1
  • AOB

Yes, exactly one year ago today, users were getting 2 invites each for the App.

I can’t decide if it’s a long year or a short one
Basically — best app, best support, best supporting actor…

And an update on Chadia!

From today Chadia no longer works for us
OH! The little tinkers
Why you little…

This week the number is : 648,061

5,712 new users — and during next week we’ll hit another ‘milestone’ : 650,000 users. We just keep on truckin’. All of this and KYC / lost or dropped payment issues seem to have really dried up. Hopefully ready for the big influx for Mexico. Wen Mexico? Don’t know, but there’s a lot of form-filling going on, which is the unglamorous yet essential part of building the foundations. Once it launches, we’ll get Victoria on the Lodgecast to tell us about the journey.

Well, Monday came and went… then all of a sudden — 92%

What’s been going on?

1 merge and…. taken today :

Whaaat? Project ded?

So not a lot of coding. Testing testing testing — that’s what. And you don’t get to see that on GitHub — only the tests to integrate new code and deployment.

As we can see from the major tasks — testing. 8 weeks to code freeze? Maybe. But what’s that at 4%? Audit tasks? And also, on the greater breakdown of tasks what is #RC2 and #RC3?

To put this in context, a while back there was a sneaky RC1 release, which Taylor mentioned in the Lodgecast — this, it appears was audited by one of the big cheeses and that is what both delayed the 92% and also must have taken up time going through the results.

We don’t know the details yet, but an audit has been carried out and the results have obviously had an effect on the path of development — there are some post-audit tasks (the 4% in the pie chart) and also it looks like some milestone development releases : #RC2 (current) and #RC3 (probably final). Pure conjecture on my part but it might be to make final audit a bit easier by compartmentalising functionality.

The thing the mainnet dashboard can’t show, of course, is the length of time afterwards for audits — I think it fair to assume whatever that was before this audit, it is now shorter. So the 100% might not come any sooner but the subsequent audit process will be shorter. I had in my head 4 weeks. Might revise that down to 3. 8 weeks from now is end of August — testing can be a blessing or a curse though — find an unknown unknown and it can cause consternation, but I think now an audit has been carried out, the road should be fairly well mapped.

Things are happening off the back of that as well :

You say review, I say audit — no one says potaato

But that was all a bit dour : WE’VE COMPLETED AN EXTERNAL AUDIT!! YAY!

Ok, enough with the TWAs. Real world assets to you and me. What? Obviously as opposed to virtual-world assets. Or maybe moon assets.

Anyway, it’s the bridge from crypto to ‘the real world’, where you can use Traditional Finance in crypto. I’ve had a look round the internet and a few developments are creeping in.

Relevance : Reserve eventually, in it’s fully decentralised state, will look to use a basket of real-world assets as backing for an RToken in order not to be tied directly to the fate of the dollar. Like an ETF or mutual fund or similar — enough anti-correlated assets to perform regardless of market conditions. This is all predicated on being able to access those assets as both liquidity and an oracle source. So, preamble done — off we go….

First up Centrifuge

Some other details

Basically — starting to expose traditional assets to crypto.

Next up — a proposal to MakerDao to issuing tokenised securities by Backed Finance AG

And a couple of crypto projections from Tascha Che (Taschalabs)

A snippet :

Well who’d have thought? For crypto to truly become useful, it has to make the journey into the real world (even I’m doing it now) and, I suspect, not even be known as crypto. I’m going to come up with the phrase “soft-crypto “ — you heard it here first, and if anyone else uses it, it’s mine!

So what is soft-crypto? It’s a bit like a mullet — business at the front, party at the back. Meaning the end user has no real knowledge they are using crypto (why should ‘real world’ people care?), but the back end is crypto. Think McDonalds happy tokens as rewards, which are just branded RTokens and the more you interact with McDonalds, the more happy tokens you get. McDonalds get some yield on the float and users get some value as well — and here’s the kicker — it’s not a walled garden, so your McDonalds happy token can be redeemed and used elsewhere. As Tascha explains, the added engagement for the universality of fungible tokens pushes the whole user demand up to compensate for that.

This does away with people needing crypto wallets and all that annoying stuff — just cheap back end and flexible blockchain plugged into the real world. What you can build on that basic premise is basically limitless.

So, it looks like at last, the real world is coming and the use-case of crypto is not naval gazing, but being useful — and more importantly, being sustainable through small fees.

Heavy going? Apologies… Advance warning — maths is coming!

If you didn’t already know, circulating supply is 18.5Bn. Option 1 is here :

So the majority of investors / team members etc signed up for option 1 to show their intentions fairly clearly through the ability to sell. Ok lets unpack this because, as ever with Reserve, it’s nuanced.

First off, in late January, 27.9Bn RSR were unlocked. What I hear you say — but coinmarketcap didn’t change so they weren’t were they? Well, yes they were, HOWEVER — there was a caveat.

You could sell — but you had to do it through an OTC desk — everyone had to go through the same desk. This desk was limited to 3% of daily volume.

So we have ‘custody’ and ‘unlock’ — so only the sold RSR were added to the circulating supply.

So — 3% per day volume could be sold, so you could ask the desk to sell and they would.

Ok — enough of the terminology — where’s this going. Well, if you were to keep an eye on that circulating supply, say every time it got changed weekly for example, you’d have a volume of data against which you could analyse the trading volume of RSR and find out if it was 3% all that time (max selling) or not. still with me? Weekly sold amount of RSR vs weekly traded volume. High = bad, low = good, right? In the most simplistic terms, probably.

Ok — so we need to calibrate first — lets take a high selling week and set it against reality.

WTF — too many numbers! It’s Friday.

Ok — apologies for the layout, but I’ll explain what’s going on as the rest look like this as well.

Here we have the volume on coinmarketcap for RSR in dollars — so a total of $204,980,920 worth of RSR traded. We look at the weekly change in sold RSR and (ok I admit) take an average of the closing price and multiply sold RSR by that to get OTC sales in $$, which is $6,198,117. I think this is the highest week sold figure and it comes in at pretty much 3%. So we assume the numbers work — as anything over 3% would mean there was a rabbit away, but I think we’re ok with this method.

Ok so what happened since then?

Lets look at the last 3 weeks shall we?

Promising — 0.19% out of a possible 3%

0.34% — higher but still pretty small in the grand scheme of things.

Last week — 0.26% of total trading.

Here’s a chart of selling in value and volume over time

What this shows I think (all my own opinions — I do not claim to be ‘right’) is that there was a fair amount of admitted selling, but I think the trend now is down — almost nothing in the grand scheme.

Ok, so what happens at the end of July? Well, coinmarketcap is going to post a BIG number. Circulating supply will jump to about 40Bn. The tokens will be ‘unlocked’, but I hope I’ve explained here that there’s nuance here — the ability to sell has been there for 6 months.

Will they all sell at once? I don’t know, I don’t think anyone can say, but I think the evidence is that it’s unlikely. Still — you buys your token and you places your bet. What is the potential downside if dump vs potential upside if no dump? I think that’s the real area of gain here — if you can game that and place suitable counter-bets then good on you.

*Disclaimer* All I’ve done is write down some numbers and apply some logic — I may have got it all wrong, I may not, but I’m just putting this out into the community, because I think it’s valuable.

I’ve run out of time so I’ll just finish off with a very quick AOB..

If you’ve properly read all that then have a nice cup of tea — or a stiff Gin! You’ve earned it.

Thank you as ever — enjoy the weekend (it’s my birthday tomorrow :-)).

Standard!

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Adoption Manager — Reserve Lodge

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