Short Version

This week we performed security analysis on the Reserve ecosystem and associated key management and have determined we are now comfortable increasing the supply cap limit from $100k to $3M.

Long Version

An interesting fact about RSV is that it has a supply cap built into it. This allows us to control the amount of value protected by our system at any given time. This is an important part of being responsible stewards, and prevents us from getting into situations where too much capital accumulates in our smart contracts too quickly.

When we deployed RSV we performed extensive auditing of the code, along with our friends at CertiK. But code correctness is only one piece of the puzzle. As long as a project is in development, key management and security are just as important. At the time of launch, we were quite confident in our code correctness, but hadn’t yet put as much thought into our key management, so we set the max RSV supply cap to $100k in order to be conservative. This allowed us to be confident that even if an attack against the system were successful, we would be able to make users whole out of our own pockets.

This week we dove into hardening our key management and security practices in order to up that limit. While it doesn’t make sense to go into detail, at a high-level: we researched and built careful threat models, including a substantial attack tree. This process produced a few changes in the way we do key management. We now feel comfortable with supplies as high as $3M.

This doesn’t mean RSV will always have a cap of $3M! We have our sights set high here at Reserve. But in a way, the supply cap acts as an implicit milestone that marks our progress. I’m looking forward to the next time we increase it :)