Motivation

The Reserves currently run a different implementation generation on every chain: mainnet still holds legacy cUSDC through the frozen Compound v2 pathway, while each L2 runs its own one-off implementation. This makes the system harder to operate and reason about than it needs to be.

Overview

This proposal upgrades the Reserve on every chain (Ethereum, Arbitrum, Optimism, Base) to the latest NoopFiatReserve implementation, which holds USDC directly with no external depository. It also burns all protocol-held DSU and ESS, including the Timelock's ESS balance.

On Ethereum, the upgrade passes through a migration step that redeems the Reserve's cUSDC, recalls all DSU and USDC from the TwoWay Batcher and clears its debt, clears the legacy sale orders, burns all Reserve-held DSU and ESS, withdraws USDC in excess of the outstanding DSU supply to the Timelock, and migrates storage to the modern layout. The migration reverts unless the remaining DSU supply is fully backed by the Reserve's USDC.

On Arbitrum, Optimism, and Base, the Reserve is upgraded to NoopFiatReserve through the corresponding bridge.

Resources

• Implementation: https://github.com/equilibria-xyz/emptyset-mono/pull/20