Once large funds have made their choices, the market for smaller funds opens up.

In this cycle, the three major trends are VC, KOLs, and stablecoins, with KOLs themselves also being a tokenizable asset.

VC’s choices are becoming increasingly narrow, focusing on stablecoins and “simple investment” products, and reinvesting in projects that have already issued tokens. These are lower-risk options with more predictable returns.

On April 16, the on-chain Delta-neutral yield stablecoin (YBS) project Resolv completed a $10 million seed round led by Maven11, marking its first public fundraising since its establishment in 2023.

Compared to Ethena’s high-profile approach, Resolv remains relatively low-key, but its innovations are on par with any competitor. In summary, it can be broken down into: a more unique revenue model, on-chain revenue sources, and more complex token economics.

The American Gold Rush Dream of Russian Geeks

A gesture of goodwill from Trump led to the restoration of Russian citizenship.

The lead investor Maven11 is based in the Netherlands, with participating funds like Robot Ventures mostly from U.S. investors, while Resolv’s three founders—Ivan Kozlov, Fedor Chmilevfa, and Tim Shekikhachev—are all science majors educated in Russia.

There is reason to suspect that this funding round had already been completed but was not disclosed to avoid suspicion. Similar to how Ethena needed support from exchange VCs, the YBS project likely needed at least some liquidity to handle black swan events.

Image Caption: Resolv Founding Team Social Engineering Diagram
Image Source: @zuoyeweb3

Is on-chain feasible? Ethena believes it’s not, while Arthur Hayes thinks forming a strategic alliance with CEXs is necessary to stabilize the liquidity of USDe. ENA is thus exchanged with various exchange VCs in exchange for relinquishing minting rights to ensure the long-term stability of the protocol.

In contrast, Resolv, unlike Ethena’s compromise stance, fully embraces the on-chain ecosystem and shows a strong determination to capture the market with higher yields.

More Complex Tokenomics

Unlike Ethena’s dual-token mechanism with a stablecoin and governance token, Resolv actually has three tokens: the stablecoin USR, the insurance fund and LP token RLP, and the governance token $RESOLV.

Image Caption: Resolv Token Economics
Image Source: @zuoyeweb3

It’s important to note that Resolv’s governance token does not serve the special purpose of forming a strategic alliance like ENA in Ethena. ENA in Ethena essentially represents the proportion of AP (Authorized Issuers), and in extreme cases, ENA has limited impact on retail users but is crucial for the protocol’s operation.

The focus of Resolv is the dual-revenue token system formed by USR and RLP. Users who deposit USDC/USDT/ETH can theoretically mint USR at a 1:1 ratio, and these assets are mostly stored on the on-chain protocol or Hyperliquid to minimize asset loss caused by CEX hedging.

In a creative move, Resolv introduced the RLP token, primarily used to cover funds hedged on CEXs. Additionally, it offers higher yields, with USR’s annual return ranging between 7%-10%, while RLP yields are between 20%-30%, though this is theoretical, and current results have yet to reach the expected values.

More On-Chain Revenue Sources

Compared with Ethena, Resolv is more actively embracing the on-chain ecology. From the perspective of income, YBS is divided into interest-bearing assets such as stETH and other self-generated income, as well as CEX contract hedging fees.

On-chain returns may be higher than CEX hedging, but the outstanding problem is that the liquidity of Hyperliquid is obviously not as good as that of competitors such as Binance. Currently, the ratio of Binance and Hyperliquid for hedging contract opening is about 7:3, so the value of RLP lies in this.

RLP is a leveraged income token that uses less capital to maintain a higher rate of return. For example, the current RLP TVL is only $63 million, less than 20% of USR, which is suitable for users with high risk preferences to participate.

To complain, due to the price trend of ETH, YBS’s assumption that most ETH longs will pay shorts will likely not be true for a period of time. The current RLP income is negative.

More Unique Revenue Model

The difference between USR and USDe is minimal, with the main distinction being that Resolv introduces RLP as an insurance mechanism. Since Resolv cannot fully eliminate the involvement of off-chain CEX and USDC, it aims to minimize their negative impact.

Image Caption: Resolv Data
Image Source: @ResolvLabs

In theory, USR will be fully over-issued by on-chain assets (currently at a 120% ratio, with 40% being on-chain assets), and a portion of the issued collateral will be used for institutional custody and off-chain CEX hedging.

At this point, Resolv’s capital efficiency is clearly not as good as Ethena’s fully off-chain CEX hedging. Resolv’s RLP needs to “make up” for this portion of the revenue, at least to break even with Ethena.

YBS Future Outlook

Ethena merely opened the door to YBS, but this doesn’t mark the end.

The yield rate for USR is between 7% and 10%, while RLP offers a yield rate of 20% to 30%, with risk isolation. For example, for 1.2U of ETH, the collateral used to mint 1USR is hedged on-chain and with Hyperliquid, while 0.2U is used to mint RLP and hedge on Binance.

Even if Binance crashes, USR can still guarantee rigid redemption. In practice, the theoretical risk exposure for RLP is 8%. The innovation here is that Ethena completely relies on Perp CEX for capital efficiency and security, taking one step forward.

However, one could also see it as a step backward. In Ethena’s mechanism, as long as CEX doesn’t maliciously attack, there is essentially no possibility of a death spiral. In the most extreme case, Ethena’s protocol can stabilize the market through negotiations with large holders and its own funds, similar to what Curve’s founders did during extreme market conditions by using OTC deals to stabilize the coin price.

On the other hand, Resolv places more funds and yields on-chain, and therefore must face the various impacts of on-chain portfolios. Binance may not target ENA, but it doesn’t mean it will spare Hyperliquid. For reference, Hyperliquid: 9% on Binance, 78% centralized.

In the end, in a competitive environment, it’s often impossible to guarantee a balance between safety and yield. Resolv launched roughly at the same time as Ethena, but its current TVL and issuance are far behind Ethena. The choices available to later participants will only decrease.

However, more ships will set sail on the YBS journey, and with the low-interest financial era, project startup costs will be lower than during DeFi Summer.

This is somewhat counterintuitive. During the DeFi Summer era, any product prototype could attract capital influx. But remember, the farming return requirements were often above 20%, with UST being a clear example, while Ethena’s benchmark sUSDE remains below 5%.

In other words, as long as the APY for new YBS participants exceeds 5%, adventurers will join in, opening the possibility for retention and a flywheel effect. However, how YBS projects will present themselves to uninformed retail investors is not something that can be easily solved by finding KOLs or VC endorsements.

Conclusion

The combination of USR and RLP is essentially a hybrid product of Hyperliquid and Ethena, an LP Token + YBS. I refer to it as the Sonic/Berachainization of the YBS ecosystem, aiming to surpass existing products through more complex mechanism designs.

At the same time, the risks are significantly higher. Any LP Token mechanism inherently faces the dilemma of creating liquidity for liquidity’s sake, and the insurance mechanism for RLP has yet to be tested by extreme market conditions. USDe, on the other hand, has already gone through a de-pegging event.

De-pegging is the rite of passage for stablecoins, and I hope Resolv can overcome this step.

Disclaimer:

1. This article is reproduced from [zuoye Waiboshan], and the copyright belongs to the original author [zuoye Waiboshan]. If you have any objections to the reprint, please contact the Gate Learn, and the team will handle it as soon as possible according to relevant procedures.

2. Disclaimer: The views and opinions expressed in this article represent only the author’s personal views and do not constitute any investment advice.

3. Other language versions of the article are translated by the Gate Learn team and are not mentioned in Gate.io, the translated article may not be reproduced, distributed or plagiarized.