4.4.2 RSD on the Open Market
In the first iteration of the ReSource Network, RSD will not be allowed to leave the confines of the ReSource trading network. This means that RSD will only be transactable among underwritten, KYCed merchant accounts. At this stage, the only ways of obtaining RSD will be either by accessing credit directly or by accepting RSD as a means of payment on the ReSource Marketplace. There will be no way of purchasing RSD on the open market, or selling it on exchanges.
This is important to protect the growing ReSource ecosystem, while also complying with US regulatory guidelines. However, future iterations of the Network will allow wider use cases up to a point at which RSD will be freely tradable.
As explained in the chapters above, the ReSource protocol will not provide an artificial arbitrage mechanism to ensure a fixed trading price for RSD. Rather, a market-based mechanism will organically arise which will drive RSD to maintain within its soft-pegged margins.
As mentioned above, ​​RSD deficits convert 1:1 into debt denominated in US dollars if not paid in time. This makes it so that if RSD price drops sharply, RSD debtors will have an incentive to acquire “underpriced” RSD in order to close their debt position at a discount.
Likewise, if RSD increases in value dramatically, holders of positive RSD balances will be incentivised to sell their holdings, while other ReSource creditors will be incentivised to deepen their debt position, creating more RSD in the process.
Furthermore, RSD savings plans provide additional mechanisms to regulate the amount of RSD on the open market. While saved RSD are spendible within the trading network (in order to buy goods and services from other merchants on ReSource), they will not be spendible outside of it. This means that saved RSD can’t be sold on exchanges or swapped for other currencies. This leads to a situation in which the sale of RSD on the open market is only profitable if and when the arbitrage opportunity on the open market is more appealing than SOURCE rewards paid out to RSD savers.
Again, as emphasized in the chapters above, this is not to create a fixed USD trading price for RSD, but rather to maintain the overall predictability of its anticipated price movements, in order for RSD to maintain its function as a unit of account, used primarily to price goods and services.
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