Integrate Reservoir Assets on Euler Yield Market

[Reservoir]

Introduction:

Reservoir is a multicollateral yield bearing stablecoin backed by RWAs and onchain strategies (tbills, overcollateralized onchain lending, funding rate strategies). This flexible infrastructure allows for consistently high yields paid out to srUSD through varying market conditions and sets up Reservoir to be the primary candidate for looping strategies. Reservoir is live on Ethereum & Berachain and recently crossed $250m in TVL.

Reservoir has two core products - 1) rUSD a dollar pegged stablecoin and 2) srUSD a yield bearing stablecoin. Reservoir also has a ERC-4626 of srUSD, wsrUSD which is used for the Pendle markets.

Reservoir has an onchain PSM enabling permissionless minting and redeeming of rUSD and srUSD with no lockups. rUSD can be minted by/redeemed for USDC at any time 1:1 up to the value sitting in the PSM. If the PSM falls below the target threshold it is automatically replenished every 10 minutes. All srUSD can be redeemed permissionlessly at any time for rUSD minus a fee equivalent to one day’s worth of yield. srUSD can offer the highest stablecoin yield in the market due to these features.

Type:

Collateral deployment

Motivation:

Trusted by Steakhouse, Re7, and MEV in both Morpho and Euler vaults, Reservoir has solidified itself as a sustainable source of yield. Reservoir is deeply integrated across DeFi applications such as Contango, IPOR, and Pendle providing users one of the highest native stablecoin yields across crypto markets.

We estimate that more than $30M in rUSD and srUSD from holders would be deposited within the Euler markets in the couple of weeks.

Important Links:

Website: https://reservoir.xyz/

App: https://app.reservoir.xyz/

Proof of reserves: https://app.reservoir.xyz/reserves

Twitter: https://x.com/reservoir_xyz

Contract addresses:

rUSD: https://etherscan.io/token/0x09d4214c03d01f49544c0448dbe3a27f768f2b34

srUSD: https://etherscan.io/token/0x738d1115b90efa71ae468f1287fc864775e23a31

wsrUSD: https://etherscan.io/address/0xd3fd63209fa2d55b07a0f6db36c2f43900be3094

PT-rUSD: https://etherscan.io/address/0x88c4f34b86907b7221c0061f7a0bbec9391ea727

PT-wsrUSD: https://etherscan.io/address/0xd7a432f7962123561a63e60e7396b6ba622651b1

Tokens requested to be used as collateral:

rUSD, srUSD, wsrUSD, PT-rUSD, PT- srUSD

Audits:
Reservoir has had multiple audits from Halborn: Audit | Reservoir

Next Steps:
We invite the community to give their feedback and recommendations on Reservoir assets for listing.

[Objective]

Thank you @Reservoir for submitting this listing proposal. Objective Labs recommends the onboarding of Reservoir assets on Euler Yield, starting with rUSD and srUSD.

Fundamentals

rUSD is a stablecoin backed by a portfolio of stablecoin yield strategies and RWAs. It is minted and redeemed permissionlessly with USDC. A peg stability module (PSM) ensures that there is a liquid buffer to support instant redemptions at any time. Allocations are carried programmatically via asset adapter contracts, one for each venue, and are bound by supply caps. Adapters report back risk metrics to the protocol which are used to manage exposure and risk. By mandate rUSD never takes on leverage in its portfolio, and maintains high standards of liquidity, solvency and capital.

While rUSD is 1:1 pegged to USD, srUSD is a yield-bearing wrapper paying out 6.25% (set by governance). srUSD does not enforce a lockup period or withdrawal delay, but is once again bound by the instant redemption capacity in the PSM. Redeeming srUSD is subject to a small fee set by governance, currently 0.0166%.

Portfolio

rUSD’s current portfolio consists of 13 allocations including Ethena sUSDe and its Pendle PT, lending on Morpho, liquidity provision on Berachain against HONEY, and lending on Euler Prime. Overall the portfolio’s risk profile is comparable to Euler Yield with one exception being the MEV Capital Usual USDC vault on Morpho which we deem higher risk because of its long tail allocations.

Liquidity

rUSD currently has a liquid buffer of ~0.5% ($1.2M). There is no significant DEX liquidity on Ethereum. On Berachain there is a $43M rUSD/HONEY pool on Kodiak supporting a $5M swap with 1.5% price impact and a $10M swap with 3% price impact. LayerZero’s OFT standard is used for bridging, meaning that Berachain liquidity can be utilized for liquidations in a ~10 minutes round trip.

Recommendations

Based on our analysis we recommend that rUSD be onboarded as a borrowable stablecoin in Euler Yield, allowing rUSD holders to earn yield and Reservoir points, adding needed supply-side liquidity in Euler Yield. We also recommend the onboarding of srUSD initially as collateral for rUSD, enabling srUSD yield to be looped without cross pricing or liquidity risk. We recommend to defer the onboarding of Pendle PT-rUSD and PT-wsrUSD until their liquidity improves.

We note that while the USDC → rUSD path is unconstrained (1:1 for up to $500M), instant rUSD → USDC liquidity is relatively small and variable, though regularly replenished based on onchain history. Thus having rUSD as a borrowable asset poses little extra risk to the market outside of Euler Yield’s accepted risk profile.

LLTVs

Collateral	Debt	LLTV
srUSD	rUSD	95%
USDC	rUSD	95%
USDT	rUSD	95%
PYUSD	rUSD	93%
RLUSD	rUSD	95%
wM	rUSD	93%
USDS	rUSD	93%
sUSDS	rUSD	93%
DAI	rUSD	93%
sDAI	rUSD	93%
USD0	rUSD	90%
USD0++	rUSD	90%
USDe	rUSD	90%
sUSDe	rUSD	90%
eUSDe	rUSD	88%
USDtb	rUSD	95%
mBASIS	rUSD	90%
PT-USD0++-26JUN2025	rUSD	84%
PT-sUSDE-29MAY2025	rUSD	88%
PT-eUSDE-29MAY2025	rUSD	88%
PT-cUSDO-19JUN2025	rUSD	88%
PT-sUSDE-31JUL2025	rUSD	88%

In line with the rest of the market, we recommend that borrow LTVs be set to 2 percentage points lower than LLTV.

IRMs

Vault	Base rate	Kink	Rate at kink	Rate at 100% (max)
rUSD	0%	90%	7%	80%

We recommend that the interest fee for rUSD be temporarily set to 0%.

Caps

Vault	Supply Cap	Borrow Cap
rUSD	30M	27M
srUSD	30M	0

Oracles

We recommend a 1:1 price oracle for rUSD and an exchange rate oracle for srUSD.

[Gauntlet]

[Gauntlet] - Parameter Recommendations for Reservoir stablecoins on Euler Yield (2025-05-09)

Gauntlet has reviewed this proposal to onboard Reservoir assets to Euler Yield. Reservoir offers multi-collateral backing through a diversified balance sheet of digital and real-world assets. Its rUSD is a dollar-pegged stablecoin that maintains stability through their Peg Stability Module allowing 1:1 conversion with USDC subject to maximum limits and liquidity, and a Credit Enforcer that automatically ensures protocol solvency and liquidity ratios remain above required thresholds. srUSD is the yield-bearing version that presently generates 6.25% APY as set by governance through exposure to secure sources including US treasuries, DeFi yields, and algorithmic market-neutral crypto strategies.

As noted by Objective Labs, there is effectively no liquidity on mainnet for rUSD. srUSD can be redeemed for rUSD atomically through Reservoir for a minuscule 0.0166% fee. rUSD is redeemable to USDC on mainnet directly subject to the constraints of the PSM; currently atomic liquidity stands at ~1.9M USDC, which we have seen fluctuate frequently as the protocol rebalances. We note the presence of Berachain liquidity allowing for more swap capacity that can be subsequently bridged, though this would add operational overhead for liquidators.

Majority of the non-bridged rUSD activity is currently in one Morpho srUSD/rUSD 98% market with 68M rUSD supplied. This market is at almost kink utilization of 90% with a kink borrow APY of 5.95%. Currently with a 0.31% spread and a maximum leverage of 50x, the srUSD/rUSD trade provides loopers with upwards of 20% APY. We see this as a competitive opportunity given further looping is prohibitive past the kink in this market.

Given supply for wsrUSD and the PTs is below 1M, we recommend only rUSD and srUSD be considered initially.

Cap Recommendations

We believe the recommendations provided by Objective Labs are reasonable for the initial listing in light of market liquidity.

LLTV Recommendations

As discussed, we believe the primary opportunity here will be srUSD/rUSD exposure. Given the atomic conversion between these assets, as well as under the assumption of an exchange rate oracle for srUSD, liquidation risk for this pair is very low. Therefore we will recommend increasing the srUSD/rUSD LTVs to bolster competitiveness. We are aligned with Objective Labs’ remaining suggestions. For now we agree that keeping rUSD as non-collateral is safe in light of atomic liquidity constraints on mainnet.

Our recommended adjustment is below.

Collateral	Debt	LLTV	Borrow LTV
srUSD	rUSD	97.5%	96%

Interest Rate Curve Recommendations

Given the present yield of srUSD as well as the demand for the looping-conducive srUSD/rUSD Morpho market discussed, we recommend a downward adjustment of the kink borrow APY.

Vault	Base rate	Kink	Rate at kink	Rate at 100% (max)
rUSD	0%	90%	6%	80%

Next Steps

• We welcome community feedback.