Introduction to HAI
What is HAI
Introduction
HAI is a multi-collateral fork of RAI on Optimism. HAI uses something called a "controlled-peg". This means that its price is not tied to a static price.
Users can get HAI by depositing different types of collateral into the system and minting HAI against them.
The price at which the system values HAI is called the Redemption Price. A PI controller determines the Redemption Price. When the market price of HAI goes above its peg, the controller sets a negative interest rate, and when it's below its peg, it does the opposite.
Overview
The copy below is pulled from the HAI announcement postoriginally posted in the Reflexer DAO community forum.
In order to advance the cause of RAI, grow the ecosystem of open-source developers on this codebase, and increase mindshare for controlled peg stablecoins, we (Reflexer DAO) have decided to deploy a multi-collateral fork of RAI called HAI on Optimism.
HAI has the following characteristics, explained further below:
collateral types will include ETH, RAI, LSDs like stETH/rETH, and assets on Optimism like OP and UNI, with room for expansion
more expected long-term governance than RAI (e.g. to add/remove collateral)
PI controller to set redemption rate, same as RAI
initial price will be $1 USD instead of an arbitrary value like RAI’s $3.14
And given everything we have learned from RAI, it seems likely to me that equilibrium redemption rates for HAI will probably trend positive, so the price of HAI will get higher over time.
Collateral Types
The day 1 collateral types for HAI will be ETH and wstETH, which we expect to represent the largest markets on Optimism, and have plans to add OP shortly thereafter. Other collaterals will need to be voted in via governance. All collateral types will have independent, governance-set, debt ceilings.
Price feeds per collateral are dramatically cheaper on L2, so the major factor to consider for new collateral decisions is the availability of liquidity & willing liquidators.
Governance
The governance token for HAI will be called KITE. HAI will have KITE governance enabled on day 1. We are currently working with Tally to determine the best governance contracts to use (deciding between Compound Bravo & Open Zeppelin).
PI Controller
Like RAI, HAI will use a PI controller and will use similar parameters.
Initial Price
HAI will start at $1. While it may confuse people to see a stablecoin drift away from $1, the mental math of calculating drift over time is much easier with a $1 starting price.
Incentive Alignment
SpankChain is also contributing The Money God Altar, which is an open source smart contract to facilitate incentive alignment between the HAI and RAI communities. 20% of the KITE supply will be deposited in a Sablier stream on Ethereum mainnet, with the Altar contract as the recipient. Every 30 days, anyone will be able to call a function to 1) withdraw the streamed KITE to the Altar contract and 2) max bid using KITE for FLX on CowSwap. Any purchased FLX will remain in the Altar permanently, burned in sacrifice to the Money God.
The Money God Always Wins
Conclusion
RAI crawled so HAI could fly. We’ve known from the beginning of RAI that for RAI to truly succeed, it wouldn’t be by standing alone as the sole “controlled peg” stablecoin, it would be by inspiring the development of an ecosystem of open source stablecoins, and collectively educating the world to drive adoption. To grow RAI, it’s time to get HAI.
With HAI, we look forward to expanding the Money God League with HAI, bringing controlled peg stablecoins to L2, and exploring the dynamics of multi-collateral systems.
Why HAI?
HAI was created to address some of the limitations of RAI. For example, RAI can only be minted against ETH, which means that users who want to mint RAI are taking on an opportunity cost by not staking their ETH. HAI will allow users to mint stablecoins against various collateral types, reducing the opportunity cost of minting HAI. HAI will initially support ETH and wstETH as collateral types. Other collateral types will be added to HAI over time through governance.
Unique Money Markets
Stacked Funding Rates
Options
Pegged Coins/Synthetic Assets
Yield Aggregator
Sophisticated Arbitrageurs
Portfolio Management Strategies
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