# FAQ **Which collateral backs USR and RLP?** USR and RLP are always 100% backed by a combination of ETH, staked ETH, BTC, USD-neutral assets, with a prevailing portion of collateral directly on-chain. A portion of ETH tokens is used to deploy into institutional crypto custodians as collateral for the hedging positions. Protocol metrics are calibrated to achieve a situation that at all times USR is fully backed solely by on-chain ETH, stETH, and BTC, while RLP fully absorbs exposure to centralized parties. **Does Resolv use CEXes for hedging? What about centralization risks?** Resolv operates on both CEXes and DEXes to achieve maximum diversification. Centralization risks are handled by: 1. dynamic collateral management, which limits CEX exposure 2. off-exchange custody solutions and, most importantly: 3. Protection Layer **How stable will the yield be?** Historical data shows that the ETH and BTC delta-neutral strategy yield is consistent. Median annual performance across multiple simulations is 8.4%, with 99% of results lying in the range of 7 - 10% p.a. Treasury profits are allocated to two instruments - staked USR and RLP. Most of the yield volatility is absorbed by the Protection Layer, while staked USR enjoys more stable yield. More information on the yields can be found here: * [Historical data;](https://medium.com/@ResolvLabs/rates-in-defi-money-market-connection-between-on-chain-lending-yields-and-the-basis-trade-0cc70e01bfea) * [Yield simulations](https://medium.com/@ResolvLabs/protocol-profits-and-how-they-are-distributed-all-about-resolv-yield-6df3cd69ed40). **What happens if there is not enough Protection Layer?** It is important to stress that the Protection Layer is not a part of stablecoin backing, so even if it reaches zero, it means no loss of value of the stablecoin (still can be redeemed for USD 1.00 equivalent). Lack of Protection Layer means that exposure to centralized exchanges and yield volatility is not fully covered. Protection Layer is a self-balancing mechanism - the thinner it is, the higher the yield it provides, attracting more liquidity. **Where can I learn more?** See [litepaper](https://medium.com/@ResolvLabs/resolv-the-true-delta-neutral-stablecoin-7c20da854f9a) for a deeper dive into Resolv architecture. For more updates, follow Resolv Labs on [X (Twitter)](https://x.com/ResolvLabs) and [Blog](https://resolv.xyz/blog) --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.resolv.xyz/litepaper/protocol-mechanics/faq.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.