9. Future Architecture: Lending and Stable Value

RAVA's markets for performance create a foundation for new forms of credit and stability.

Performance Backed Lending

rFund tokens, continuously priced and grounded in realized yield, can serve as collateral for lending.

A lending layer will allow participants to borrow stable liquidity against rFund holdings.

Collateral value Vₜ is determined by:

    Vₜ = mₜ × Pₜ

where mₜ adjusts dynamically with yield variance in the underlying RAVA Index.

This system enables credit markets to value collateral using real performance, not synthetic volatility.

Stable Value Instruments

RAVA's cash settled architecture supports the creation of performance backed stable tokens, internally called rcUSD.

rcUSD remains value stable by dynamically hedging long and short rFund positions to neutralize volatility while harvesting yield differentials.

Let Y_f be aggregate rFund yield and Hₜ the hedge ratio applied by rcUSD.

The stability condition is:

    dP_rcUSD/dt ≈ 0    when    Hₜ = dY_f/dP_f

rcUSD becomes the settlement medium for rFund markets and the base liquidity for RAVA's credit layer.

Legal and Risk Structure

RAVA is working with counsel to finalize legal structures for both the lending protocol and stable value system to ensure full compliance with derivative, banking, and payment regulations.

A dedicated FLO reserve will provide a liquidity and insurance backstop to rcUSD, maintaining its minimal value floor during prolonged settlement lags or macro stress.

This reserve is funded through transaction fees, performance spreads, and insurance underwriting.