Yield Derivation

Rental yield from properties held in the Real USD treasury is collected, converted to DAI and paid into the treasury on a daily basis. USDR then rebases daily based on the rental income received.

Thus, the Real USD supply expands by the amount of DAI received from rent. The daily rebase will appear automatically in the user’s wallet.

In the event that USDR collateralization falls below 100%, 50% of rental yield payments will be retained by the treasury as stablecoin holdings. This counteracts the decline in treasury value and recollateralizes the system using built-in mechanisms.

At launch, without incentives, Real USD will yield ~4.25%. On average, Tangible properties yield 8.5%+ but while the market cap of USDR is small, a large portion of the treasury needs to be kept in DAI to meet the needs of sudden redemptions. Using duress redemption modeling, this portion can reduce over time as the market cap grows.

We think 4.5% is too low of a yield to gain traction for a new stablecoin. For this reason, we will be subsidizing the yield until Real USD reaches a certain market cap.

Yield subsidies will be funded using Tangible Labs’ TNGBL tokens that will be converted into USDR.

As we progress through our launch phase, the percentage of treasury assets held in Property TNFTs will consistently increase, allowing the incentives to slowly tail off. Eventually, the incentives will be fully replaced by an increase in collected rental revenue as the real estate portion of the backing expands vs DAI.

In addition to this the final yield will depend on the minting on gains mechanism as some of the USDR minted against gains will be used for additional yield.