The Resolv protocol has launched an income distribution mechanism, and the value of RESOLV Token may increase.

The yield-bearing stablecoin protocol Resolv recently announced that it will gradually implement an income distribution mechanism, planning to transfer up to 10% of the daily protocol income to the foundation's treasury over the next four weeks. This fund will be used for the long-term value creation of the protocol and to incentivize RESOLV Token staking users. Specifically, starting from July 31, Resolv will gradually increase the income transfer ratio weekly, starting from 2.5% and ultimately reaching the target of 10%.

The income distribution mechanism is a common revenue distribution method in DeFi protocols, with its core being to determine whether to allocate part of the protocol's income to native Token holders. This mechanism is usually seen as favorable for native Tokens, as it can directly enhance the value capture capability of the Tokens. However, since this may reduce the earnings of protocol users, many projects are cautious about whether to enable this mechanism.

Resolv is an interest-bearing stablecoin protocol, and its issued USR stablecoin is backed by an equal amount of spot long and contract short positions. Compared to similar projects, Resolv introduces a risk grading mechanism, achieving a higher over-collateralization rate, and improves spot staking yields by integrating more liquidity derivative Tokens. Since its launch, Resolv has achieved an annualized return of approximately 9.5%.

In May of this year, Resolv launched the governance Token RESOLV. Although the protocol has taken several measures to enhance the value of RESOLV, such as offering high staking rewards and accelerating airdrop point accumulation, the performance of the Token after its listing has not been ideal. The launch of the revenue distribution mechanism may be aimed at boosting the price of RESOLV.

Resolv indicates that the current timing and architecture have matured, the protocol has demonstrated actual traction, a clear value distribution framework, and risk resistance capabilities, thus deciding to launch the revenue distribution mechanism. Based on the current total locked value (TVL) of 500 million and an average yield of 10%, Resolv is expected to generate 50 million in revenue annually. Under the new mechanism, 45 million will continue to flow directly to users through product earnings, while the protocol will retain 5 million for long-term value creation.

Compared to another well-known yield stablecoin project Ethena, Resolv seems to be more cost-effective based on static data. Currently, Ethena's TVL is $7.781 billion, the circulating market cap of ENA Token is $4.016 billion, and the fully diluted valuation is $9.48 billion. In contrast, Resolv's TVL is $527 million, the circulating market cap of RESOLV Token is $57.28 million, and the fully diluted valuation is $205 million. From the perspective of the market cap to TVL ratio, RESOLV indeed appears to be "cheaper".

However, it is important to note that the application scope and network effects of USR are currently far less than those of USDe, and Resolv still lags behind Ethena in terms of protocol influence. In addition, Resolv has not clearly stated what proportion of the 10% revenue will directly flow to RESOLV stakers, making it difficult to accurately estimate the actual impact of the new mechanism on the value of RESOLV.

Overall, considering the current low market value of RESOLV, it may become another investment option besides ENA. However, the long-term development prospects of the Resolv protocol still need to be monitored further, and the specific details of income distribution are yet to be announced. Investors should remain cautious and conduct thorough research and analysis when making decisions.