[Proposal] Introduction of the R Savings Module

This proposal to introduce the R Savings Module builds upon the idea of Single-Sided DAI liquidity incentive program governance proposal, posted in the forum earlier this week, whose aim is to address the current imbalance in our R liquidity pool, increasing R’s price to $1. We suggest reading our previous governance proposal for a better understanding of the context.

The R Savings Module is a novel new program designed to promote the growth and stability of R, as well as its utility as a stablecoin. Its primary purpose is to align with yield accruing mechanisms seen in other stablecoins, like DAI, paving the way for R to explore novel use cases beyond a device used for leverage.

Key Features of the R Savings Module

  • Fixed APR: The APR, paid in R and subsidized by fees generated by the protocol, will have a fixed APR floor. Early depositors will be able to benefit from a higher APR until the Staking Capacity is reached.
  • Staking Capacity: Initially set to 6 million R to prevent liquidity cannibalization, and is sufficient to address the current imbalance in R liquidity pools.
  • Seamless Stake and Unstake: Users can enter and exit the program without facing lock-up or cooldown periods.
  • Cross-chain Compatibility: The contract is compatible with our future cross-chain deployment in the future, enabling users to deposit R into the Savings Module on other chains, which reduces barriers of entry.

At the same time, we propose to:

  • Increase the one-time borrow fees of R from the current 0.5% to 1% to counteract the effect of the higher R price resulting in increased borrowing activity.
  • Increase the amplification of the Balancer pools from 125 to 250 over a one-week period from when the Single-Sided DAI incentive program goes live.

Anticipated Positive Effects on the R peg and the PSM effectiveness

The minimum APR on the R Savings Module, expected to be set in the 5-10% range, will exceed that on similar stablecoins, such as the DAI Savings Rate. Therefore, the launch of the R Savings Module is expected to:

  • Induce buying pressure leading to R restoring the peg and even trading above it once the Staking Capacity is raised further.

  • Such buying pressure will be absorbed by the planned Peg Stability Module (PSM) which is slated to launch soon. The PSM will act as a counterbalance to the R buying pressure by allowing anyone to mint R against sDAI and sell it on the open market to achieve a profit as long as the R price is above $1.

This strategy has the twofold goal of achieving a tighter peg for R and organically accumulating sDAI in the PSM that will act as protocol reserve backing R.


Launching the R Savings Module can provide a more efficient solution compared to the Single-Sided DAI liquidity incentive program we tabled previously. The current proposal aims at swiftly boosting the convergence of the R price towards the peg, bypassing the need for hefty capital expenditures.

Stakeholders: Please review this proposal. If agreed, this can be implemented in a very short timeframe, i.e. by the end of next week.


I don’t like the idea of a limited capacity savings module. I think it has a couple issues: (1) it can create a race to deposit where insiders, those with bots, or those that just happen to be around when it opens get a great deal and everyone else gets nothing. And (2), it can potentially lead to overpaying. What if the rate is 8% and the savings module fills up quickly. Doesnt that mean that the protocol is effectively paying too much to those lucky enough to get in?

I would rather see a certain amount of R allocated to the savings module per period and then pay depositors the max of: some predetermined rate (e.g., 10%) or the rate obtained by pro-rata distribution of the allocated R. I think this would do a better job of maximizing the amount of R pulled into the savings module per R allocated to interest payments.

hi brian, without a cap, it might remove too much of R’s liquidity, which becomes a problem for liquidations when market spikes down, causing R to overpeg. The PSM, which will be launched at a later date, will mitigate this overpeg. We will reconsider the cap once PSM is alive.

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This is a sound proposal David!

Ideally, the incentives for LPs and R stakers reach some equilibrium without a cap for stakers.

But for now, a cap is reasonable because:
→ Allows a bounded investigation of the dynamics the R Savings Module introduces
→ Smart contract risk mitigation

Best Regards,

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I also have the same thought as you, must consider carefully about fairness. An exploited vulnerability will have severe results