What makes Reflexer unique is RAI, its native stablecoin. Reflexer’s RAI returns crypto to its roots drawing inspiration from the early days of stablecoins to offer crypto-native stability. RAI is an ETH-backed, non-pegged stable asset known as a reflex index whose monetary policy is managed by an on-chain, autonomous controller.

RAI boils down to this: a volatility-reduced representation of ETH. It’s designed to float similar to other currencies and not be pegged to anything. Reflexer relies on a set of protocol parameters including borrowing power and market price to determine the price RAI can be redeemed for. RAI was launched with an arbitrary selected starting redemption price of $3.14. From this point on, RAI continued to float while it is managed by the protocol’s on-chain controller, though it has later continued to stabilize around a redemption price of ~$3.

Reflex indexes like RAI are designed to reduce volatility, shielding users against major and sudden moves in the market like the events witnessed on Black Thursday. On a technical level, the system behind RAI is a modified fork of the MakerDAO multi-collateral DAI protocol (MCD), with a few distinct changes. Some of these changes include autonomous feedback mechanisms that control user incentives, simplified variable names, more flexible collateral auctions, long-term bounded governance, optional Safe insurance, and more.