Reservoir
About
Reservoir is a next-gen stablecoin protocol on Ethereum that issues rUSD, a permissionless, multi-collateral-backed stablecoin redeemable 1:1 for USDC, USDT, and USD1. The protocol also offers yield-bearing tokens (srUSD/wsrUSD for variable-rate yield accruing daily or per-block, and trUSD for fixed-term yield at maturity) and a lending market on Morpho powered by Steakhouse, all governed by a Credit Enforcer that enforces liquidity, asset, and equity ratios modeled on Basel III banking frameworks.
Where Does Yield Come From?
Reservoir's yield comes from the spread — the difference between what the protocol earns on its assets and what it pays out to holders of its yield-bearing tokens (srUSD, wsrUSD, and trUSD).
Here is how the money flows. The protocol holds a basket of different collateral (USDC, USDT, USD1, and other assets). Most of this sits ready for instant redemptions in the Peg Stability Module (PSM) — a reserve that keeps enough USDC and USDT on hand so anyone can swap rUSD back 1:1 at any time. The PSM automatically refills every hour and targets a reserve level between 0.25% and 0.50% of total assets.
Any capital beyond what is needed for those liquid redemptions is deployed into income-generating strategies. A smart-contract called the Credit Enforcer sends surplus funds through "Asset Adapters" into two broad categories:
- Real-world assets — things like Treasury bills, private credit, and revenue-based financing. These earn returns that tend not to move in sync with crypto markets.
- On-chain lending — notably through the SteakrUSD market on Morpho, where the protocol supplies rUSD that gets borrowed against srUSD collateral, earning lending yield in the process.
The interest rate paid to srUSD and wsrUSD holders is set periodically by governance, based on how healthy the protocol's balance sheet looks. srUSD accrues yield daily (one day's worth of interest is burned as a tiny fee). wsrUSD accrues per block and has no fee. trUSD works differently: it is issued at a discount today and redeems 1:1 for rUSD at a fixed maturity date — so the yield is locked in upfront based on the term rate set by governance.
Throughout all of this, the Credit Enforcer enforces three hard constraints programmed into the smart contracts: minimum liquidity ratios, asset ratios, and equity ratios (modeled on the Basel III banking framework). These rules keep the protocol solvent by making sure it never over-leverages or drains its reserves below safe thresholds.
Audits
| Audit / Date | Findings | Verdict |
|---|---|---|
Halborn13-05-2024 - 31-05-2024 |
| The audit found no critical or high-risk vulnerabilities, and all two findings were addressed (the medium severity issue was fixed, the low severity issue was acknowledged), demonstrating that the Reservoir protocol's smart contracts present an acceptable security posture at the time of assessment. |
Halborn20-09-2024 - 26-09-2024 |
| All 2 findings (1 low-severity and 1 informational) were successfully addressed, with no critical, high, or medium severity issues remaining, indicating the audited contracts were in a sound state upon completion. |
Halborn10-12-2024 - 11-12-2024 |
| No critical or high-severity issues were identified, and both findings (one low, one informational) were remediated, reflecting a clean security outcome for the Reservoir lz-bridge contracts. |
| The audit document was not accessible for analysis because the CDN/shortlink URL returned empty responses on all fetch attempts. No security conclusions can be drawn for the Reservoir protocol from this source without the actual report content. | |
Halborn06-08-2025 |
| The Halborn audit found no Critical, High, or Medium severity vulnerabilities in the Reservoir Rebalancer contract; the three Low-severity and two Informational findings were all either risk-accepted or acknowledged by the team, indicating a low-risk codebase with minor accepted design trade-offs. |
Backers
Reservoir was incubated by Fortunafi, an RWA-focused firm established in 2020. No venture capital investors, funding rounds, or investment amounts are disclosed on any official Reservoir website, documentation, or blog posts. The protocol's launch blog posts (June–August 2024) thank ecosystem partners (Berachain, Dinero, Dolomite, FORDEFI, Fortunafi, Gnosis, Jigsaw, Halborn, Hilbert Group, Morpho, ODOS, Steakhouse, Plume), but these are listed as integration/distribution partners rather than financial backers.
Legal
Legal form
Foundation (Reservoir Foundation mentioned as nominal subscriber to fund interests)
Registration jurisdiction
Cayman Islands (Terms of Service governed by Cayman Islands law, with venue in Cayman Islands courts; Reservoir Foundation implied to be registered there)
Status and notes
The Terms of Service (last revised August 23, 2024) are operated by or on behalf of the 'Reservoir Protocol'. The Risk Factors page discloses that 'Reservoir Foundation' is the nominal subscriber to investment funds for the reserves, but states it 'has no legal or contractual relationship with the Protocol, the holders of Protocol Tokens, or the holders of Protocol Governance Tokens.' No operating company name, registered address, director info, or commercial register entry is disclosed. No separate privacy policy or imprint page was found on official sources. Contact: [email protected].