Rai Reflex Index
B+
RAI is an experimental decentralized stablecoin with a floating price. Unlike most stablecoins, RAI is not pegged to a fiat currency.
The protocol is forked from MakerDAO's DAI and is substantially similar, except for 2 innovations: (a) a free-floating price and (b) the use of positive and negative interest rates to influence the market price of RAI.
RAI is solely backed by ETH collateral. Its current Collateralization Ratio is over 350%.
Despite its experimental nature, RAI has proven to be a reliable low-volatility alternative to conventional stablecoins. RAI is ideal for sophisticated users who want a decentralized, censorship resistant stablecoin and can understand its intricacies.
RAI's rating can be upgraded from B+ to A- by:
allowing direct redemption (primary liquidity) of RAI for ETH collateral.
Rai Reflex Index
Stability
Moderately Stable
Moderately Stable
The Stability factor is evaluated on the following:
1. Reserves Management - Quality, quantity, storage and segregation of reserve assets
2. Market Feedback - Indicators of market's confidence in a stablecoin derived from price and trade data
3. Mechanism - Stabilization methods that protect the stablecoin
Rai Reflex Index
Management
Very Low Risk
Very Low Risk
The Management factor is evaluated on the following:
1. Restrictions - What deterrents exist to prevent key personnel of stablecoin projects from unethical and illegal behavior?
2. Negative Track Record (if applicable) - Have key personnel been involved in scams, frauds or other illegal activities?
Rai Reflex Index
Implementation
Not Assessed
Not Assessed
This factor aims to assess risks arising from technical implementations – i.e, smart contract code and oracles. It is currently not assessed, but we plan for it to be evaluated in the future.
Rai Reflex Index
Decentralization
Very Low Risk
Very Low Risk
The Decentralization factor is evaluated on the following:
1. Platform Censorship Risk
2. Custodian Risk
3. Type of Collateral
4. Diversified Voting Power
5. User Censorship Risk
Rai Reflex Index
Governance
Low Risk
Low Risk
The Governance factor for on-chain stablecoins is evaluated on the following:
1. Voting Systems - Does the governance function have binding votes and automated on-chain execution of proposal outcomes?
2. Anti-Governance Attack Measures - Are there appropriate preventive and reactive measures to counter governance attacks?
Rai Reflex Index
Externals
Not Assessed
Not Assessed
This factor seeks to incorporate external feedback mechanisms such as market and social sentiment into our internal ratings. It is currently not assessed, but we plan for it to be evaluated in the future.