Is it possible to lose your RSR via staking?

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Reserve Protocol

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Is it possible to lose your RSR via staking?

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08.06.2022

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Smeddy-o | Reserve | will never DM · Accepted Answer

Ryan's answered it nice and succinctly 🔥 RSR offers an insurance for any particular RToken (if you choose to stake and receive yield). If an asset becomes unstable, and loses the peg without quickly stabilising itself, RSR can be seized to make up the shortfall. Note, we aim over time to have RTokens whose baskets are formed from a variety of uncorrelated stable assets, and while the platform allows people to create baskets of a more volatile nature, our attention will be on the most robust ones, that can work for real people in the real world. "If there is not sufficient RSR to make up for the default and purchase the entire new basket, then RToken holders will take the corresponding loss. This is why it's important to offer plenty of reward to RSR stakers, in order to ensure sufficient insurance. For staking to be positive in expected value, the expected loss from potential default must be less than the expected gain from staking rewards." From https://reserve.org/protocol/2021_version/#rsr-staking

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Is it possible to lose your RSR via staking?

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