Posting on behalf of Gauntlet. Discussions will be held in the Morpho Channel on Discord
Summary:
Gauntlet is excited to collaborate with the Olympus community to further scale the sUSDS Morpho Vault. We propose expanding market support beyond the existing Pendle PT-sUSDe exposure by onboarding Resolv’s RLP token.
Motivation:
Onboarding the RLP / sUSDS market will enhance the vault’s allocation strategy by allowing it to include delta-neutral, yield-generating strategies.
Proposal:
Contingent on community approval, Gauntlet will integrate the RLP market and continue to actively manage vault-level allocation optimization, risk monitoring, and market rotation to maintain capital efficiency and preserve the vault’s risk-adjusted return profile.
Market Parameters Summary
- RLP / sUSDS Market
- Market ID: TBD
- Loan token: sUSDS - 0xa3931d71877C0E7a3148CB7Eb4463524FEc27fbD
- Collateral token: RLP - 0x4956b52aE2fF65D74CA2d61207523288e4528f96
- Oracle: 0x19018450A02bC5c1994eaD517498311f64B2626a (Proof of Reserve Oracle)
- LLTV: 86%
- SupplyCap: 10M sUSDS
Overview of Resolv Protocol
Resolv is a modular on-chain delta-neutral strategy protocol that allows users to mint a yield-bearing stablecoin, USR, by depositing base stablecoins (e.g., USDC, USDT). It generates sustainable DeFi-native yield through delta-neutral perpetual strategies that hedge price exposure while earning funding rates and liquidity incentives.
RLP (Resolv Liquidity Pool) represents the excess backing to USR token above 100% collateralization. It captures a higher portion of the yield generated by delta-neutral strategies (e.g., perp funding rates, LP fees) relative to stUSR. RLP is the junior tranche in Resolv’s capital stack. RLP is designed to protect USR from insolvency. In exchange, RLP users receive a higher portion of the profits of the collateral pool. In effect, RLP functions as a leveraged, risk-bearing layer that insulates USR and captures upside from protocol performance.
Capital Stack
USR: Senior, overcollateralized stablecoin (~$1 peg); fully redeemable from vault assets.
RLP: Subordinate equity-like token; entitled to protocol fees and excess collateral, but first to absorb losses.
Historical Performance of RLP
Since January 1, 2025, the maximum observed price drawdown for RLP within any 16-hour window has been limited to 0.3064%. This relatively low level of intra-period volatility underscores the stability of RLP despite its subordinate equity-like position in Resolv’s capital structure. Such constrained price deviations reinforce confidence in RLP’s ability to preserve value and deliver a consistent return profile under normal market conditions.
However, RLP remains exposed to the inherent risks of Resolv’s delta-neutral strategy. In scenarios where hedging mechanisms fail to fully offset market exposure, such as during funding rate inversion, trade execution failure, or smart contract vulnerabilities, the protocol may incur losses. In these cases, RLP acts as the junior tranche, absorbing credit and performance-related losses to protect the solvency and redemption value of USR holders. There has not been any large historical losses that have caused price drawdowns.
Liquidity and Redemptions
As of now, DEX liquidity TVL for RLP stands at $5.38M. The majority of liquidity resides in Curve’s stable swap pool, offering sufficient depth for price discovery and orderly liquidation pathways.
RLP holders may redeem their tokens for underlying collateral at a 1:1 value-equivalent in USDC or USDT, net of any applicable redemption fees. Redemptions are permitted at any time, subject to the protocol maintaining a minimum USR collateralization ratio of 110%, ensuring that redemptions do not impair the solvency of senior USR holders. Redemptions are processed within 24 hours of the request being initiated.
RLP Capital Efficiency
The current sUSDS lending APY is 4.5%, with expectations for further upward pressure as stablecoin borrowing demand grows across the Olympus-integrated ecosystem.
Meanwhile, Resolv’s RLP token is generating a 7-day trailing APY of 26.42% and a 30-day trailing APY of 13.09%, based on fee accruals from delta-neutral strategy performance. This presents a potential carry trade opportunity where users borrow sUSDS to purchase RLP and earn a net spread, subject to protocol limits and risk.
The table below quantifies the net APY from this loop strategy, under a range of sUSDS borrowing costs from 2% to 6%:
Recommended Market Caps and LLTV
Gauntlet recommends listing RLP with an LLTV of 86%. While historical price analysis indicates low volatility and minimal drawdowns for RLP, Gauntlet advises maintaining a conservative collateral buffer to account for potential losses stemming from Resolv’s delta-neutral strategy. Given that RLP functions as the first-loss, junior tranche, it is structurally exposed to strategy underperformance or protocol-level insolvency. An 86% LLTV provides a 14% collateral buffer, offering approximately 10% coverage against historical maximum drawdowns, thereby mitigating liquidation and insolvency risk.
In addition, Gauntlet recommends an initial supply cap of 10M sUSDS for the RLP market. This sizing is supported by on-chain liquidity conditions and the 24-hour redemption window, which ensures orderly exits without significant slippage or liquidity constraints.
For pricing and collateral valuation, Gauntlet recommends integrating Resolv’s Proof-of-Reserve oracle, which has been audited by MixBytes, to ensure accurate and secure on-chain price feeds for RLP.
Recommended Market Market Params
- Oracle: 0x19018450A02bC5c1994eaD517498311f64B2626a (Proof of Reserve Oracle)
- LLTV: 86%
- SupplyCap: 10M sUSDS
Polling Period
The polling process begins now and will end at 10:00 PM CST on 7/25/2025. After this, a Scattershot vote will be put up.
