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The Reserve stablecoin protocol is investing $20 million in Curve (CRV), Convex (CVX), and Stake DAO (SDT) harvest application management tokens, according to a June 20 announcement. The investment is intended to increase the liquidity of Reserve’s stablecoins, called RTokens. It will also increase the Reserve’s voting rights in the management systems of these applications.
Reserve is a stablecoin protocol that allows users to create their own coins backed by any asset they desire. Electronic US dollar (eUSD), high yield US dollar (hyUSD), reserve (RSV), reserve dollar (RSD) and ETH+ are some examples of stablecoins created with the reserve.
Prior to the announcement, Reserve was already the seventh largest holder of Convex tokens, behind only Mochi, Redacted, JPGd, Badger, Clever, and FRAX. The protocol obtained these tokens through the widespread use of Convex to generate income for its users.
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The reserve team said this $20 million new investment could enable new features for RToken, including “secured loans, wallet products, real asset tokenization, and more transparent fintech systems.”
The protocol’s highest market cap coin, eUSD, is backed by dollar derivatives from Compound and Aave. It has a market capitalization of over $20 million and a daily trading volume of around $500 million. The team claims that the cumulative volume of eUSD was more than $5.7 billion through its use in the RPay payment app for Android and iOS, which is often used in Latin America for money transfers, purchases, and payroll.
The protocol’s second largest market cap coin, High-Yield USD, is backed by a basket of dollar derivatives through Convex and Flex Finance.
The $20 million investment could be welcome news for CRV token holders as CRV reached its yearly low on June 15th. The new low was partly due to controversy surrounding Aave loans allegedly taken by the founder of Curve.