Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


Can Reserve Rights (RSR) compete with Tether (USDT)?

Reserve Rights (RSR) is a US Dollar stablecoin built by the Reserve Project. The hope is users will save, spend, and receive Reserve Rights through the Reserve App.

The Reserve Project claims the Reserve App processes 15,000 transactions worth around $1.5 million each day. They claim the Reserve App processes most of the transactions in Argentina, Venezuela, Colombia, and the USA.

The Reserve Rights (RSR) is an Ethereum stablecoin powered by the Reserve Protocol. They back the Reserve Protocol with other stablecoins. The Reserve Protocol’s current backing comprises one third USD Coin (USDC), one third TrueUSD (TUSD), and one third PAX Dollar (USDP).

The eventual goal of the Reserve Protocol and the Reserve Project is to offer an alternative to fiat money. The hope is to create a basket of assets that can back the Reserve Protocol to create a cryptocurrency backed by real world assets.

Hence, I think the Reserve Protocol resembles Lord John Maynard Keynes’ proposal for the Bancor an international currency backed by baskets of assets. I can see no connection between the Reserve Protocol and the Bancor (BNT) cryptocurrency. Bancor supports the Bancor decentralized trading network which provides liquidity for cryptocurrencies.

The Reserve Project operates a second cryptocurrency they call the Reserve Dollar (RSV).

A Stablecoin from Peter Thiel?

The Reserve Project has some impressive backers, including controversial billionaire Peter Thiel. Thiel, Forbes’ 273rd richest person, is the managing director of the Founders’ Fund venture capital firm.

Thiel is legendary for his early investments in new tech products. He was the first big investor in Facebook (FB), for example. Thiel’s other early investments include Airbnb (ABNB), SpaceX, Skype, and Affirm.

Thiel was the founder of PayPal (PYPL) and got rich by selling the FinTech company to eBay (EBAY). Thiel founded the controversial intelligence data company Palantir (NYSE: PLTR). 

Given Thiel’s track record, many speculators are interested in Reserve Rights (RSR). Thiel is controversial for his political stands, which included early backing of Donald J. Trump (R-Florida).

CoinBase and Sam Altman back Reserve Rights

Another investor is Sam Altman, the founder of Y Combinator and the CEO of Open AI. Altman was an early investor in AirBnb, Redditt, Stripe, Pinterest (NYSE: PINS), and Instacart. Altman is the chairman of the board of the fusion company Helion Energy.

Other Reserve Project investors include the cryptocurrency wallet provider CoinBase Global Inc. (NASDAQ: COIN). Interestingly, CoinBase is one of the principal backers of the number two stablecoin by Market Capitalization USD Coin (USDC). CoinMarketCap gave USD Coin a Market Cap of $38.707 billion and a 24-Hour Market Volume of $5.701 billion on 30 November 2021.

Another major investor in the Reserve Project is CryptoLotus. CryptoLotus is a cryptocurrency hedge fund based in the San Francisco Bay Area.

What Value does Reserve Rights (RSR) have?

Although, CoinMarketCap lists Reserve Rights (RSR) as the 10th largest stablecoin by Market Capitalization, it had a Coin Price of just 4.981₵ on 30 November 2021. Hence, I do not consider Reserve Rights a stablecoin. Instead, I consider it a liquidity protocol similar to Bancor (BNT).

Yet, CoinMarketCap gives Reserve Rights some value. It had a Market Capitalization of $655.453 million, a Fully Diluted Market Cap of $4.981 billion, and a 24-Hour Market Volume of $429.485 million. They base those numbers on a Circulating Supply of 13.16 billion RSR, a Maximum Supply of 100 billion RSR and a Total Supply of 100 billion RSR. Reserve Rights was CoinMarketCap’s 142nd largest cryptocurrency on 30 November 2021.

In contrast, CoinBase gave Reserve Rights a Coin Price of 4.98₵, a Market Cap of $655.2 million, and a 24-Hour Market Volume of $429.2 million. They based those numbers on a Circulating Supply of 13.2 billion RSR. CoinBase’s data shows Reserve Rights is not a stablecoin because CoinBase gave it an all-time high of 12₵.

I think Reserve Rights is an interesting FinTech solution with some impressive backers. However, I do not consider Reserve Rights (RSR) a credible alternative to big stablecoins such as USD Coin (USDC) and Tether (USDT). Instead, Reserve Rights is an app that could give speculators and consumers easier access to stablecoins and the US Dollar.