Reserves represent decentralized liquidity powered by the community. It comprises of dedicated liquidity providers that are connected to diverse stakeholders in the ecosystem. Entities with large, idle digital assets such as large token holders, fund managers and token teams can easily become reserves, rebalance their portfolio and provide liquidity and value for the entire ecosystem.
A reserve consists of two main components: an on-chain component of your reserve smart contracts and an off-chain component (normally, an automated system) that manages your on-chain component. The two components are depicted in the diagram below.
The on-chain component has smart contracts that store your tokens, provide conversion rates, and swap your tokens with users. The off-chain component hosts your trading strategy that calculate and feed conversion rates and rebalance your reserve of tokens.
Setup Your Reserve
Visit here to see how you can setup your own reserve in a few steps.