The Resolv protocol initiates a fee distribution mechanism, and the value of RESOLV Token may increase.

The interest-bearing stablecoin protocol Resolv recently announced the gradual implementation of a fee distribution mechanism, planning to transfer up to 10% of daily protocol revenue to the foundation's treasury over the next four weeks. This fund will be used for the long-term development of the protocol and to incentivize RESOLV stakers. Specifically, starting from July 31, Resolv will incrementally increase the revenue transfer ratio each week, beginning at 2.5% and ultimately reaching the target of 10%.

This fee allocation mechanism is a common revenue distribution method in DeFi protocols, usually regarded as favorable for the native Token. However, since this may reduce some of the income that originally belongs to the protocol users, major protocols often adopt a cautious attitude when implementing such mechanisms.

The USR stablecoin issued by Resolv uses an equal amount of spot long and contract short as collateral, with its returns mainly coming from the staking rewards of the spot long and the funding rate income from the contract short. Compared to similar projects, Resolv also introduces a risk grading mechanism and a higher proportion of liquid derivative tokens, resulting in an annualized return of approximately 9.5% since the protocol's launch.

At the end of May this year, Resolv launched the governance token RESOLV, but its performance fell short of expectations. The launch of the fee distribution mechanism may be aimed at boosting the price of RESOLV. Resolv stated that the protocol currently has the conditions for maturity, including achieving actual traction, a clear value distribution framework, and good resilience.

According to Resolv's estimation, with the current TVL of 500 million USD and an average yield of 10%, the protocol is expected to generate an income of 50 million USD annually. Under the new mechanism, 45 million USD will flow directly to users through product revenues, while 5 million USD will be used for the long-term value creation of the protocol.

Compared to similar projects like Ethena's ENA Token, RESOLV seems to have more advantages in static value for money. Currently, Resolv's TVL is $527 million, the circulating market value of RESOLV is $57.28 million, and the fully diluted valuation is $205 million. This makes RESOLV's MC/TVL ratio 0.108 and FDV/TVL ratio 0.39, both lower than the corresponding values of ENA.

However, the application range and network effects of USR are currently still behind those of USDe, and the overall potential of Resolv is also less than that of Ethena. In addition, Resolv has not yet clarified what proportion of the 10% revenue will flow to RESOLV stakers, making it difficult to accurately assess the impact of the new mechanism on the value of RESOLV.

Overall, considering the current low market value of RESOLV, it could become another investment option besides ENA. However, the long-term development prospects of the Resolv protocol still need further observation, and the specific plan for fee distribution awaits disclosure. Investors should carefully assess and conduct thorough research.