ETH Lite: Reflexer Labs Raises $1.7M to Build a Somewhat-Stable Coin for DeFi

Published on by Coindesk | Published on

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Reflexer Labs is building a new asset called rai that's meant to follow the price movements of ether but more gradually.

"Self-correcting mechanisms are an elegant method of efficiently managing protocols. Reflexer is taking this approach to build the first trustless stable asset administered by algorithms rather than manual governance."

RAI is generated much like its namesake, dai: Users stake an asset, ETH, to the system to borrow a new crypto asset.

Where DAI attempts to match the price of a U.S. dollar, RAI does not.

RAI targets a "Redemption rate" relative to its underlying asset but stripping out much of the volatility.

If over a three-month period, ETH generally trended up but with some stomach-churning drops along the way, RAI would just generally trend up, with maybe only some slight stumbles.

"It's a number called the redemption price. It's the ideal price for RAI at any time."

RAI actually aims to bring a well-established technology from electrical and mechanical engineering into crypto.

The specifics remain to be determined but Reflexer's product will use oracles to monitor the price of RAI and the price of ETH. If RAI doesn't match the target price, the system can fine-tune the amount of RAI it takes to pay back debt.

Since this is a delayed reaction there will still be shifts in price but they should be more gradual, giving users time to adjust, whether they are using RAI in a loan or as collateral on a DeFi platform.