rEarn
Yield RENA with Stables
rEarn = Erc20 Token
(0.01 RENA + 1 USDC) Deposited, Mints (1 rEarn)
(1 rEarn) Deposited, Redeems (0.01 RENA + 1 USDC)
All USDC used to mint rEarn is added to rFund
All RENA used to mint rEarn is locked (DAO decide utility later)
rFund = rEarn’s Yield Vault
rFund uses all the USDC that was used to mint rEarn to earn yield.
The yield from the rFund goes towards buying RENA and distributing it to rEarn staking pools.
The cost of minting rEarn will fluctuate depending on the demand for RENA. Because the yield goes entirely towards buying RENA, the demand for RENA should increase if more rEarn is minted.
The Theory
Higher yields, by default
The rFund can be jump-started by removing the team-held RENA/ETH liquidity, this would allow the DAO to create a strategy with roughly $1-2m USD value in ETH to seed the rFund. The yield from this would be buying RENA and sending it to the rEarn staking pool. Meaning that this staking pool should consistently offer higher yields than other yield aggregators (yearn, curve, cream, etc.)
On top of this, all yield generated from the rFund buys RENA from Uniswap and then rewards it to rEarn stakers. This means that the volume of RENA will increase, and in turn, so will its scarcity, as RENA is designed to perpetuate volume and become more scarce when demand is high.
If the cost of RENA increases, so will rEarn as its value is pegged to 1 USDC + 0.01RENA.
This means that users staking rEarn utility tokens will be both, earning a growingly scarce asset (RENA) whilst only being exposed to the price of USDC + RENA (rEarn), without the risk of impermanent loss, (as its a single asset staking pool).
The rFund growth
Because rEarn is essentially pegged to 1 USDC + 0.01 RENA, its value will change in relation to RENA’s value. This means that as the system gets rolling, minting rEarn will become more expensive over time to reflect the possible market conditions of the RENA utility token.
The APY for rEarn should remain higher than other stable yield farms unless the DAO votes to remove the initial seed assets and use them elsewhere.
More rEarn minted = more volume and demand for RENA
Minting (1 rEarn) deposits (1 USDC) into the rFund directly increasing its total yield, while also temporarily removing (0.01 RENA) from circulation. This means that as rEarn continues to be minted, the rFund and its generated yield will grow proportionally.
This creates a circulatory effect:
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