Will the "Fee Switch" be activated, and will Resolv become the next popular stablecoin project?

On July 25, the interest-bearing stablecoin protocol Resolv announced that it will gradually activate the "fee switch" feature. The protocol plans to incrementally increase the income transfer ratio each week from July 31 to August 21, ultimately reaching a target of 10%. This portion of the income will be used for the long-term development of the protocol and to incentivize RESOLV staking users.

The "fee switch" is a common revenue distribution mechanism in DeFi protocols. It determines whether a portion of the protocol's revenue is distributed to native token holders. This can often enhance the value capture ability of the token, but it may also affect the earnings of regular users. Therefore, many protocols take a cautious approach to whether to activate this feature.

The USR issued by Resolv is an interest-bearing stablecoin backed by an equal amount of spot long positions and contract short positions. Compared to similar projects, Resolv introduces a risk grading mechanism and a higher proportion of liquidity derivative tokens, achieving an annualized yield of approximately 9.5%.

At the end of May, Resolv launched its governance token RESOLV. To boost the coin price, the protocol decided to activate the "fee switch". The official statement indicated that the timing and structure are now mature, and the protocol has demonstrated real value and resilience.

According to Resolv's estimates, with the current TVL of $500 million and an average yield of 10%, an annual income of $50 million can be generated. After activating the "fee switch", $45 million will still flow directly to users, while $5 million will be used for the long-term development of the protocol.

Compared to another popular project, Ethena, Resolv seems to offer better value for static data. Currently, Resolv has a TVL of $527 million, with a circulating market cap of $57.28 million and a fully diluted valuation of $205 million. In contrast, Ethena has a TVL of $7.781 billion, with a circulating market cap of $4.016 billion and a fully diluted valuation of $9.48 billion.

However, the application scope and network effects of USR are currently still lagging behind USDe. Ethena also has the USDtb business line, which temporarily leads Resolv in terms of protocol potential. In addition, Resolv has not clearly stated what proportion of the revenue will directly flow to RESOLV stakers.

Overall, RESOLV currently has a low market value and may become another option besides ENA. However, the long-term development prospects of the Resolv protocol still need further observation, and the specific income distribution plan after the "fee switch" is turned on is yet to be announced. Investors should cautiously assess and do their own research.