Briefly
- Ethereum-based stablecoin RAI has gone reside on its mainnet.
- Not like its many friends, RAI just isn’t pegged to something specifically.
- Within the close to future, the builders plan to launch a liquidity mining program and an “ungovernance token.”
Blockchain startup Reflexer Labs has introduced that RAI, a brand new sort of stablecoin that’s not pegged to any particular fiat forex, has gone reside on the Ethereum mainnet, per an announcement yesterday.
“You don’t have to peg to something with the intention to be secure. A very powerful factor to know is that DeFi can and needs to be indifferent from the destiny of the US Greenback. RAI is a primary step in that course,” noted Reflexer Labs founder Stefan Ionescu.
Stablecoins are cryptocurrency tokens with costs pegged—or tied—to the present market worth of a particular asset or forex. The commonest stablecoins is Tether (USDT), which is pegged to the US greenback. Which means that each token is designed to be price $1, with market makers sustaining the change charge.
What makes RAI distinctive is that it’s not pegged to something. Regardless of this, its creators argued that it might nonetheless retain a secure value. The plan is to make use of an autonomous on-chain controller—some sort of decentralized entity—to keep up RAI’s value no matter ETH’s present market price. The entire level is that its value stays roughly the identical, regardless of different property.
Reflexer co-founder Ameen Soleimani—who can also be the CEO of SpankChain—argued that RAI might have an even bigger function within the Ethereum ecosystem. He mentioned that the token might be very helpful within the decentralized finance (DeFi) trade, and will doubtlessly turn out to be a local unit of account for the Ethereum ecosystem, often known as the Ethereum Normal.
He added that, past that, it may need even larger ambitions.
“Our aspirations for RAI, nevertheless, are extra profound — if RAI fulfills its function inside DeFi and begins to earn international adoption, it might show to be a viable answer to the Triffin Dilemma, and produce credible neutrality to the administration of a secure international reserve asset, a global public good,” he mentioned.
Protecting the RAI value secure
Through the testing section that was carried out utilizing the so-called “Proto RAI” (PRAI) tokens, the asset’s value fluctuated by not more than 4% whereas the value of ETH itself surged from $400 to $1400 over the identical interval.
“PRAI’s redemption value began at $2.015 after which floated between $1.937 and $2.06. This occurred with no skilled market makers, virtually no liquidity and a scarcity of arbitrageurs which might have made PRAI considerably extra secure,” defined Ionescu.
Principally, when PRAI’s market value remained above the redemption value, the latter would begin happening—and vice versa.
“Proto RAI additionally confirmed for the primary time how a secure asset can lack a peg and as an alternative have its redemption value float in response to market forces,” Ionescu added.
Within the subsequent couple of weeks, the builders plan to launch a liquidity mining program and reveal Refelexer’s “ungovernance token,” dubbed FLX. In the meantime, RAI’s smart contract and the Uniswap RAI/ETH market are already reside.
Moreover, crypto fans can already start minting RAI by way of Reflexer’s dashboard—however there’s a catch. Whereas the registration is free by itself, at press time, it required a roughly $150 ETH transaction payment for creating the account on the Ethereum blockchain. However there’s little RAI can do about that.
