What is RSR worth?

Three-pass simulation

Each simulated path runs in three passes:

1. TVL & revenue (forward, 20 years) - Grow TVL along an S-curve, compute revenue from the fee schedule. This pass is entirely independent of price. The model always simulates at least 20 years internally so the DCF has a long runway, even though only 10 years are displayed.
2. DCF valuation (backward) - Starting from year 20, apply a terminal multiple to the final year’s revenue, then discount all future cash flows backward to compute market cap at each year. By year 20 the S-curve has typically saturated, so the terminal value represents a truly mature protocol rather than dominating the valuation.
3. Price & supply (forward, 10 years) - Divide market cap by circulating supply to get the token price. Platform fees buy and burn RSR at this price, reducing supply. Burns are capped at 2% of circulating supply per year to reflect real-world liquidity constraints - you can’t buy the entire float without massive slippage.

S-curve adoption

Reserve has two product lines, each with its own adoption speed and market ceiling (TAM): Index DTFs (on-chain ETFs) and Yield DTFs (collateralised yield vaults). Each grows along an S-curve - fast early adoption that naturally decelerates as TVL approaches the ceiling. For reference, the global ETF market is ~$15T; the TAM sliders represent Reserve’s share of this.

Each year, TVL grows by: TVL × exp(adoptionSpeed × regimeMult × (1 − TVL/TAM) − churn + noise). The (1 − TVL/TAM) term is what creates the S-curve: when TVL is small relative to TAM, growth runs at nearly full adoption speed. As TVL fills up the addressable market, this term shrinks toward zero and growth stalls - leaving only churn, which causes TVL to gradually decline. The adoption speed slider controls the steepness of the ramp-up phase; TAM controls where it bends over.

Adoption speed is protocol-specific - it represents product strength - but it is scaled by market regime. Bull markets accelerate growth (1.3×), bear markets slow it (0.6×), and neutral is baseline (1.0×). Regimes also affect volatility and the probability of sharp drawdowns. A bear market doesn’t stop growth - but it meaningfully slows it and makes the path riskier.

Market regimes

Each path starts in a bull, neutral, or bear regime based on your sentiment slider. Every year the regime can shift via a Markov chain - bull markets last ~2 years on average, bear markets ~1.8 years. Regimes affect adoption speed (bull 1.3×, neutral 1.0×, bear 0.6× for index DTFs), volatility, collapse probability, and collateral yields. Yield DTFs are stickier (1.2×/1.0×/0.7×) reflecting more stable capital. Parameters are calibrated from real DeFi TVL histories (Aave, MakerDAO, Lido, 2020-2025).

Revenue

Revenue is deterministic given TVL - no random fee draws. Index DTF fees come from a management fee on TVL plus a mint fee on new deposits; the platform takes a cut (burned as RSR) and governance stakers receive a share. Yield DTF revenue comes from collateral yield (varies by regime), split between platform fees (burned) and staking rewards to RSR holders.

Burns & supply

Platform fees from both Index and Yield DTFs are used to buy and permanently burn RSR. Because market cap is set by the DCF (independent of token count), burning tokens increases each remaining token’s share of that value. Annual burns are capped at 2% of circulating supply to model real liquidity constraints. Token emissions are currently paused - 37.45B tokens remain locked and are not entering circulation.

What’s random vs deterministic

Random: adoption trajectory (S-curve noise + collapse events), market regime path (Markov chain), and collateral yields (regime-dependent draws). Deterministic: fee rates, revenue calculation, DCF math, burn mechanics, supply accounting. The same configuration always produces identical results (fixed random seed).