RFC: Add rlUSD to Euler Prime

Euler DAO Markets
1

Add rlUSD to Euler Prime

Proposal: Add rlUSD to Euler Prime

Author

Trident Digital

Date

2024-12-23

Summary

This proposes onboarding Ripple’s rlUSD stablecoin to Euler Prime on Ethereum. rlUSD has received NYDFS approval and is anticipated to play a key role in the stablecoin ecosystem. With rlUSD now transferable and a circulating supply of 52.9M as of December 15, 2024, this proposal seeks to list rlUSD, pending a Chainlink Oracle integration.

Onboarding rlUSD will help diversify collateral options, increase capital efficiency, and attract a broader user base to Euler Prime.

Specification

Asset Details

Risk Parameters

Initial Risk Parameters for rlUSD

Parameter Value
Liquidation Penalty 10%
Supply Cap $999.96M
Reserve Factor 10%
Utilization Target 88%
Bad Debt Socialisation Yes
Borrow Cap $879.96M

These parameters are subject to feedback from Risk Service Providers and will be updated as needed.

Motivation

Why Add rlUSD?

  • Regulatory Approval: rlUSD has received approval from NYDFS, adding credibility and reducing compliance risks.
  • Growing Circulating Supply: With 52.9M rlUSD in circulation, adoption is ready to begin.
  • Stablecoin Diversification: Adding rlUSD enhances the diversity of stablecoin options on Euler Prime.
  • Strategic Integration: Supports Euler’s goal of becoming a leading platform for capital-efficient lending and borrowing.

Oracle Integration

  • Pending Chainlink Oracle integration.
  • Temporary fallback pricing mechanisms may be considered if required.

Governance and Community

Trident encourages active participation and feedback from the DAO and community members to ensure this proposal aligns with the long-term vision of Euler Prime.

Copyright

Copyright and related rights waived via CC0.

2 Likes
2

We are very much in support of adding rlUSD to Prime. On the assumption that it quickly becomes a liquid asset across DeFi, ot promises to add stablecoin diversity to the cluster, giving users more options for use as collateral and for borrowing against their crypto-native assets. The suggested supply cap is certainly too high for an initial deployment, but this could be revised down to a more modest configuration initially, such as $25m, and raised as needed as the asset becomes more liquid.

3

[Gauntlet] - RLUSD on Euler Prime Recommendations

Summary

Gauntlet recommends the onboarding of RLUSD on Euler Prime, pending on Chainlink oracle integration.

Analysis

Onboarding RLUSD as a collateral asset introduces the following considerations and risks:

1. Oracle Dependency

As of this proposal, Chainlink Oracle integration is pending. Reliable and tamper-resistant price feeds are critical for collateralized lending systems.

2. Liquidity Risk

RLUSD is relatively new, with a circulating supply of ~52.9M. While this is substantial, it may not yet reflect deep DeFi-native liquidity across major DEXs and CEXs. Inadequate liquidity can lead to high slippage during liquidations and may expose the protocol to bad debt risk during large or cascading events.

3. Redemption and Custodial Risk

RLUSD is a fiat-backed stablecoin, which depends on Ripple’s custody, banking relationships, and reserve transparency. Any operational failure, withdrawal restriction, or reserve mismanagement (e.g., opaque attestations or delayed redemptions) could impair the peg and introduce systemic risk to users and Euler’s solvency mechanisms.

4. Peg Stability and Market Behavior

Although RLUSD is regulated and fiat-backed, real-world performance under market stress conditions (e.g. mass redemptions, CEX liquidity shocks) remains largely untested. It is critical to observe peg resilience in secondary markets to assess whether it behaves like mature stablecoins (USDC, USDT) or faces structural stress under pressure.

Liquidity & Slippage

DEX Pools

pool_name pool_type pool_url pool_tvl_usd volume_24h_usd
USDC / RLUSD curve Link $44.65M $2.84M
RLUSD / USDC 0.01% uniswap_v3 Link $1.99M $235.64K

~$25M RLUSD~USDC swap starts incurring slippage.

Screenshot 2025-05-21 at 7.50.57 PM
Screenshot 2025-05-21 at 7.50.57 PM778×998 64.9 KB

~$30M RLUSD~USDC swap incurs significant slippage.

Screenshot 2025-05-22 at 5.11.24 PM
Screenshot 2025-05-22 at 5.11.24 PM758×990 66.4 KB

Cap Recommendations

Vault Supply Cap Borrow Cap
RLUSD 25M 23M

LLTVs

Gauntlet recommends setting the LLTV parameters for RLUSD in alignment with those established for USDtb. This approach reflects the similar risk profiles and stablecoin characteristics of the two assets, and ensures consistent treatment across assets with comparable stability, liquidity, and market behavior.

Collateral Debt lltv borrow_ltv
ETHx RLUSD 0.74 0.72
LBTC RLUSD 0.84 0.82
USDC RLUSD 0.95 0.93
USDS RLUSD 0.94 0.92
USDtb RLUSD 0.94 0.92
USDT RLUSD 0.95 0.93
WBTC RLUSD 0.86 0.84
WETH RLUSD 0.85 0.83
cbBTC RLUSD 0.86 0.84
cbETH RLUSD 0.8 0.78
ezETH RLUSD 0.77 0.75
mETH RLUSD 0.77 0.75
rETH RLUSD 0.77 0.75
rsETH RLUSD 0.77 0.75
tETH RLUSD 0.77 0.75
wM RLUSD 0.9 0.88
weETH RLUSD 0.8 0.78
wstETH RLUSD 0.87 0.85
RLUSD ETHx 0.8 0.78
RLUSD LBTC 0.8 0.78
RLUSD USDC 0.95 0.93
RLUSD USDS 0.95 0.93
RLUSD USDtb 0.95 0.93
RLUSD USDT 0.95 0.93
RLUSD WBTC 0.82 0.8
RLUSD WETH 0.87 0.85
RLUSD cbBTC 0.8 0.78
RLUSD cbETH 0.8 0.78
RLUSD ezETH 0.8 0.78
RLUSD mETH 0.8 0.78
RLUSD rETH 0.8 0.78
RLUSD rsETH 0.8 0.78
RLUSD tETH 0.8 0.78
RLUSD wM 0.95 0.93
RLUSD weETH 0.8 0.78
RLUSD wstETH 0.83 0.81

Interest Rate Curve Recommendations

Vault Base Rate Kink Rate at Kink Rate at 100% (Max)
RLUSD 0% 90% 5.5% 40%

Next Steps

  • We welcome community feedback.
4

Thank you Gauntlet for this excellent analysis. Objective Labs is fully aligned with the proposed parameters and we are looking excited for this integration. We propose the initial use of a 1:1 fixed rate oracle for RLUSD in anticipation for the deployment of the Chainlink price feed.

5

A pretty bad lltv or incentivize design for RLUSD.

One single account loops and borrows 93% of the total borrow cap with merely <2M net deposit.
https://etherscan.io/token/0x6200860BcdcB23d3b67A46769AFfEb91dB2b175a#balances.

Does it contribute any positive ev to either rlusd or euler? Did you consider why rlusd has 0 collateral ratio on AAVE?