Interest-bearing stablecoin protocol Resolv announces the launch of "fee switch"

On July 25, the interest-bearing stablecoin protocol Resolv announced that it will gradually activate its "fee switch" feature. The protocol plans to gradually increase the income transfer ratio each week from July 31 to August 21, with the ultimate goal of transferring 10% of the daily protocol income into the foundation's treasury for long-term value creation of the protocol and to incentivize RESOLV stakers.

"Fee Switch" is a common revenue distribution mechanism in DeFi protocols that allows the protocol to allocate a portion of its income to native token holders. This mechanism is often seen as a positive for native tokens but may also affect the interests of other protocol users.

The USR stablecoin issued by Resolv is similar to USDe, both being yield-generating stablecoins backed by an equal amount of spot longs and contract shorts. The returns of Resolv mainly come from the staking rewards of spot longs and the funding rate returns of contract shorts. Compared to other projects, Resolv also introduces a risk grading mechanism and a higher proportion of liquidity derivative tokens to achieve a higher over-collateralization ratio and staking returns. Since its launch, Resolv has achieved an annualized yield of approximately 9.5%.

At the end of May, Resolv launched the governance token RESOLV, but its performance did not meet expectations. The activation of the "fee switch" may be aimed at boosting the price of RESOLV. Resolv stated that the current timing and architecture have matured, and the protocol has demonstrated actual traction, a clear value distribution framework, and resilience.

The Resolv plan will use its revenue to expand the value for users and stakers, including supporting new integrations, funding ecosystem development, and promoting buybacks. Based on the current $500 million TVL and an average yield of 10%, Resolv expects to generate $50 million in revenue annually, with $5 million allocated for long-term value creation.

Compared to ENA, RESOLV currently seems to have an advantage in static cost performance. However, the application range and network effect of USR are still lagging behind USDe. In addition, Resolv has not clearly stated what proportion of the income will directly flow to RESOLV staking users.

In summary, RESOLV may be another investment option besides ENA, but investors still need to carefully assess the long-term development prospects of the Resolv protocol and the specific revenue distribution plan after the "fee switch" is activated.