The Shift in Capital Patterns and Innovations in the Stablecoin Market

In the current market environment, large funds have found new investment directions, creating more opportunities for small funds. This round of cycles shows three major trends: venture capital, opinion leaders, and stablecoins. Among them, opinion leaders can also be seen as a tokenizable asset.

As the market environment changes, the selection space for venture capital gradually shrinks. They tend to focus on stablecoins and simple investment products and reinvest in projects with issued tokens. These strategies carry relatively low risk and can provide predictable returns.

On April 16, a project named Resolv announced the completion of a $10 million seed round financing for its on-chain Delta neutral earning stablecoin (YBS), led by Maven11. This marks the company's first public financing since its establishment in 2023. Compared to the high-profile promotions of its peers, Resolv has chosen to act low-key, but its innovation is no less than that of its competitors. Resolv's main innovations include: a unique earning model, more on-chain earning sources, and a complex tokenomics design.

The three founders of Resolv, Ivan Kozlov, Fedor Chmilevfa, and Tim Shekikhachev, are all engineering professionals educated in Russia. This financing is likely already completed but has been postponed for certain considerations. YBS projects usually require a certain amount of liquidity to cope with potential extreme situations.

Compared to some peers, Resolv shows a more proactive attitude towards the on-chain ecosystem and competes for market share by offering higher yields. Resolv employs a three-token mechanism, which includes the stablecoin USR, the insurance fund and LP Token RLP, and the governance token $RESOLV. Among them, USR and RLP form a dual-yield token system, where users can mint USR at a 1:1 ratio with USDC/USDT/ETH. Most assets will be stored on-chain protocols or specific platforms to reduce potential asset losses caused by centralized exchange hedging.

RLP tokens are primarily used to cover funds hedged in centralized exchanges and provide higher yields. Theoretically, the annual yield of USR is between 7% and 10%, while RLP is between 20% and 30%, but the actual yields have not yet reached the expected levels.

Compared to some competitors, Resolv is more proactive in embracing the on-chain ecosystem. Its revenue sources include the yield generated from yield-bearing assets like stETH, as well as the transaction fees from centralized exchange contracts for hedging. Although on-chain yields may be higher than those from hedging on centralized exchanges, the liquidity of certain on-chain platforms is still not on par with mainstream centralized exchanges.

Resolv introduces RLP as an insurance mechanism, aiming to minimize the negative impacts of centralized exchanges and certain stablecoins. Theoretically, USR will be fully over-issued by on-chain assets (currently at a 120% ratio, with 40% being on-chain assets), and part of the issued collateral will be used for institutional custody and off-chain hedging.

Although Resolv's capital efficiency may not be as high as some competitors that rely entirely on centralized exchanges for hedging, the design of RLP aims to make up for this revenue gap. This design increases security to a certain extent, ensuring that even if some centralized exchanges encounter issues, USR can guarantee rigid redemption.

However, placing more yields and funds on-chain also means facing the risks brought by more on-chain combinations. In a competitive environment, it is difficult to ensure both security and high returns at the same time. Although Resolv launched around the same time as some competitors, it still has a gap in total locked value and issuance volume.

Nevertheless, the number of projects participating in the YBS market may continue to increase. In the era of low-interest financial management, the startup costs for project parties may be lower than during the previous DeFi boom. As long as new entrants can provide an annualized return higher than 5%, they may attract risk-takers to participate. However, how to stand out among numerous options and demonstrate the advantages of the project to ordinary users will be a question that requires deep contemplation.

The combination of USR and RLP can be seen as a hybrid product of certain on-chain platforms and YBS. This design attempts to surpass existing products through more complex mechanisms. However, the risks are also significantly higher. Any LP Token mechanism may face the dilemma of creating liquidity for the sake of liquidity, and the insurance mechanism of RLP has yet to be tested under extreme market conditions.

For stablecoin projects, undergoing the decoupling test can be seen as a form of growth. I hope Resolv can smoothly get through this critical stage and establish a foothold in the market.