In brief

  • Ethereum-based stablecoin RAI has gone live on its mainnet.
  • Unlike its many peers, RAI is not pegged to anything in particular.
  • In the near future, the developers plan to launch a liquidity mining program and an “ungovernance token.”

Blockchain startup Reflexer Labs has announced that RAI, a new type of stablecoin that is not pegged to any specific fiat currency, has gone live on the Ethereum mainnet, per an announcement yesterday.

“You don’t need to peg to anything in order to be stable. The most important thing to understand is that DeFi can and should be detached from the fate of the US Dollar. RAI is a first step in that direction,” noted Reflexer Labs founder Stefan Ionescu.

DAI is a stablecoin
DAI is the biggest decentralized stablecoin. Image: Shutterstock.

Stablecoins are cryptocurrency tokens with prices pegged—or tied—to the current market value of a specific asset or currency. The most common stablecoins is Tether (USDT), which is pegged to the US dollar. This means that every token is designed to be worth $1, with market makers maintaining the exchange rate.


What makes RAI unique is that it’s not pegged to anything. Despite this, its creators argued that it can still retain a stable price. The plan is to use an autonomous on-chain controller—some kind of decentralized entity—to maintain RAI’s price regardless of ETH’s current market worth. The whole point is that its price stays roughly the same, irrespective of other assets.

Reflexer co-founder Ameen Soleimani—who is also the CEO of SpankChain—argued that RAI could have a bigger purpose in the Ethereum ecosystem. He said that the token could be very useful in the decentralized finance (DeFi) industry, and could potentially become a native unit of account for the Ethereum ecosystem, known as the Ethereum Standard.

He added that, beyond that, it might have even greater ambitions.

“Our aspirations for RAI, however, are more profound — if RAI fulfills its purpose within DeFi and starts to earn global adoption, it could prove to be a viable solution to the Triffin Dilemma, and bring credible neutrality to the administration of a stable global reserve asset, a global public good,” he said.

Keeping the RAI price stable

During the testing phase that was conducted using the so-called “Proto RAI” (PRAI) tokens, the asset’s price fluctuated by no more than 4% while the price of ETH itself surged from $400 to $1400 over the same period.


“PRAI’s redemption price started at $2.015 and then floated between $1.937 and $2.06. This happened with no professional market makers, almost no liquidity and a lack of arbitrageurs which would have made PRAI significantly more stable,” explained Ionescu.

Basically, when PRAI’s market price remained above the redemption price, the latter would start going down—and vice versa.

“Proto RAI also showed for the first time how a stable asset can lack a peg and instead have its redemption price float in response to market forces,” Ionescu added.

In the next couple of weeks, the developers plan to launch a liquidity mining program and reveal Refelexer’s “ungovernance token,” dubbed FLX. Meanwhile, RAI’s smart contract and the Uniswap RAI/ETH market are already live.

Additionally, crypto enthusiasts can already begin minting RAI via Reflexer’s dashboard—but there’s a catch. While the registration is free by itself, at press time, it required a roughly $150 ETH transaction fee for creating the account on the Ethereum blockchain. But there’s little RAI can do about that.

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