Buy Rai Reflex Index (RAI)

What is Rai Reflex Index?

Rai Reflex Index (RAI) is a non-pegged, Ethereum-backed stable asset developed by Reflexer. Unlike conventional stablecoins that are pegged to a fiat currency like the US dollar, RAI is designed to float freely, driven by market forces, while aiming to mitigate volatility more effectively than traditional cryptocurrencies.

How does Rai Reflex Index work?

RAI operates on the Ethereum blockchain and employs a decentralized mechanism for maintaining stability. The system adjusts the supply dynamically through a mechanism that reacts to on-chain market activity, ensuring that the market price follows the redemption price set by the protocol. This is achieved without a direct 1:1 peg to any fiat currency. Users can mint RAI by locking up ETH as collateral in smart contracts. The governance and management of the protocol are decentralized, involving no central authority.

What are the potential use cases for Rai Reflex Index?

RAI has several use cases, particularly in the DeFi sector:

1. As Collateral: It can be used as stable collateral in decentralised finance protocols, providing an alternative to more volatile assets like ETH or BTC.
2. Portfolio Diversification: By offering a low-volatility option, RAI can help diversify crypto portfolios.
3. Trading and Investment: It can be traded on various exchanges and used within DeFi platforms for various financial operations.
4. DAO Reserve Asset: RAI can be used as a stabilising asset on DAOs' balance sheets to mitigate exposure to ETH's volatility.
5. Stable Asset with Interest: Serving as a stable store of value, it offers an embedded interest rate which can be attractive to users seeking returns in a decentralized manner.

What is the history of Rai Reflex Index?

RAI was developed by Reflexer Finance and was launched on 13 February 2021. It was created by Stefan Ionescu and Ameen Soleimani, initially as a fork of MakerDAO’s DAI, but with significant innovations such as a floating price mechanism and the use of interest rates to influence market prices. The platform allows users to mint RAI tokens using ETH collateral, maintaining stability through the liquidation of collateralized debt positions. RAI has evolved to become a recognised decentralized stablecoin, supported by a community-driven governance structure, which is managed through the FLX token.