This would give only auctionLength seconds for people to bid on the auction, making it very possible for the protocol to lose value due to slippage. In a similar way as how anyone can create a new trading pair on Uniswap, anyone can permissionlessly create a new Reserve stablecoin (RToken) by interacting with Reserve Protocol’s smart contracts. The protocol applies a system of factory smart contracts that allows anyone to deploy their own smart contract instance.

  • Traditional financial products often update their holdings on a daily or monthly schedule.
  • So far the protocol has been implemented in Solidity and deployed on Ethereum, Base, and Arbitrum.
  • In a similar way as how anyone can create a new trading pair on Uniswap, anyone can permissionlessly create a new Reserve stablecoin (RToken) by interacting with Reserve Protocol’s smart contracts.
  • We expect that this parameter can be set to zero later on (once a robust market of MEV searchers is established).
  • These tokens should be be wrapped into a compatible ERC20 token to be used within the protocol.

The ecosystem engine powering decentralized onchain indexes

This overview and subsequent documentation describes the intended behavior. All newly minted shares flow first to the platform take-rate, with the remainder split between addresses set by governance. Currently, the platform fee is used to automatically buy and burn RSR.

This document surveys the core mechanics that keep an Index DTF reliable and decentralized, from efficient rebalancing to fee flows and onchain governance. Traditional financial products often update their holdings on a daily or monthly schedule. DTFs improve on this model with real-time, onchain transparency that offers a clear view into each underlying component at any moment. This immediate transparency fosters trust, since anyone can verify how tokens are allocated, how yield is generated, and how frequently DTF rebalancing occurs. One-click exposure to whole crypto markets, sectors, and strategies. Because every step is deterministic and transparent, arbitrageurs quickly remove price discrepancies, keeping the market price close to NAV and limiting tracking error.

When can I exit my DTF position?

Platform fees are currently used to buy RSR on the open market and burn it, permanently removing it from circulation. In the future, RSR holders may vote to direct these flows in other ways. The trading delay parameter may only be needed in the early days – before we get to a point where there is a robust market of MEV searchers. We expect that this parameter can be set to zero later on (once a robust market of MEV searchers is established). Today the protocol is best used for bundling DeFi assets together to create yield-bearing USD stablecoins and other composite assets. All underlying assets and transactions are visible onchain 24/7, reducing uncertainty and offering up-to-date information for investors.

Index DTFs

Auction cadence & duration are adjustable by governance, enabling different index strategies without touching core code. Index DTFs package up to 100+ onchain assets into single ERC‑20 tokens, bringing index investing onchain with a new degree of openness, accessibility, and efficiency. We want money that doesn’t inflate like USD, but isn’t volatile like Bitcoin.

  • Index DTFs package up to 100+ onchain assets into single ERC‑20 tokens, bringing index investing onchain with a new degree of openness, accessibility, and efficiency.
  • DTFs offer strategic exposure at any scale, from broad-market trends to emerging sectors.
  • Today the protocol is best used for bundling DeFi assets together to create yield-bearing USD stablecoins and other composite assets.
  • Platform fees are currently used to buy RSR on the open market and burn it, permanently removing it from circulation.

Who governs DTFs?

DTFs can tap into multiple sources of liquidity & yield to optimize performance and streamline operations. Although DTFs are very different from ETFs and mutual funds, it can be helpful to compare some of their characteristics. DTFs offer strategic exposure at any scale, from broad-market trends to emerging sectors. Anyone can create a new DTF, and anyone can mint or redeem them—no need for exclusive third-party intermediaries or large institutions. Mint or redeem using a one-step zap, exact collateral, or direct contract calls. So far the protocol has been implemented in Solidity and deployed on Ethereum, Base, and Arbitrum.

A key feature of DTFs lies in the permissionless nature of their technology. In legacy systems, only a handful of large entities can create reserve balances noninterest expenses and bank performance in the stress tests new ETF products, and share creation/redemption is often restricted to designated participants. With DTFs, anyone can deploy a new basket of tokens, and anyone with an internet connection can mint or redeem them. This open model empowers smaller innovators and even individuals to launch curated folios around new ideas—or mirror the portfolios of experienced market participants—on a global scale. A collateral asset can instantly default if one of the invariants of the underlying DeFi protocol breaks. If that would happen, and we would not apply a trading delay, the protocol would react instantly by opening an auction.

Permissionless creation, global accessibility

Our approach is to bundle stocks, bonds, gold, real estate, and more into an index, and use that as money. The Reserve Protocol lets anyone deploy a token that is issuable and redeemable for a basket of any other tokens. Every Index DTF channels a portion of its fees back to RSR, permanently.

Index DTFs deliver broad exposure, transparent execution, and flexible governance through a lightweight, fully onchain architecture. Any tokenized position—e.g., liquidity provider or lending tokens—can be included in a DTF. DTFs offer streamlined exposure to specific themes or sectors that could shape crypto’s next wave of growth — like DeFi, gaming, or AI. As many of these parameters concern the Protocol Operations, we advise reading through that section of the documentation first—as it will give the deployer the necessary context to fully understand all parameters. The following types of ERC20s are not supported to be used directly in an RToken system. These tokens should be be wrapped into a compatible ERC20 token to be used within the protocol.

Unlike Yield DTFs, Index DTFs do not rely on yield-bearing collateral for revenue. Instead, two fee streams compensate governance, RSR holders, and governance-chosen addresses. When deploying an RToken, the deployer has the ability to configure many different advanced parameters. The following list goes into detail about what these parameters do and some of the factors the deployer should keep in mind to set them.

Bringing a $20 trillion phenomenon onchain

By harnessing the speed, flexibility, and transparency of decentralized technology, DTFs introduce a new chapter to ETF investing. DTFs offer targeted exposure to the rapidly shifting crypto landscape—all while delivering real-time insights and 24/7 global tradability. As crypto markets continue to evolve, decentralized token folios stand poised to become a key investment tool for digital asset markets, whatever form they may take. Creating an RToken can be done either by interacting directly with the Reserve Protocol’s smart contracts or any user interface that gets built on top of it. The first user interface for these smart contracts will be released by ABC Labs the company that’s leading protocol development. Besides the creation of RTokens, this user interface will also support exploring usage and stats related to RTokens, RToken minting & redeeming, and RSR staking.