[Proposal] Add a RAI Stablecoin Feeder Pool


Add a custom RAI stablecoin feeder pool to mStable, making it the first pool to handle a non-pegged stable asset.


The Reflexer community adapted the mStable Feeder pool code as to handle a non-pegged stablecoin like RAI. This change adapts the feeder contracts to handle RAI by keeping the mechanism used to adjust the precision of fAssets but updating the ratio whenever it’s used rather than only setting it during initialisation. The updates ate performed by reading RAIs redemption price and using it as a scaling factor on the original ratio set by the precision.


The addition of the RAI feeder pool would open up a new market sector for mStable, namely real stablecoins that are not pegged to any particular value. RAI’s value for mStable as well as for the whole Ethereum community revolves around the fact that it’s a first step toward detaching DeFi from fiat monopoly and further down the line open the possibility to remain stable and potentially beat inflation.

Next Steps

The mStable team checked the RAI feeder pool code although we would like to invite the whole community to give their opinion: mStable-contracts/RAI_FEEDER_README_TEMP.md at master · stefanionescu/mStable-contracts · GitHub.

Assuming this proposal resonates with the community, we can put it up for vote and addition to mStable.


  • Open mStable to a new market sector promising an alternative to pegged coins
  • Add a new decentralized stablecoin on mStable’s stack


  • Brand new feeder pool logic that introduces smart contract risk

RAI is the only fully permissionless stablecoin, including RAI in mUSD provides decentralisation, diversification and a wider community impact to mUSD & mStable.

Fully support this proposal.


I’m not super familiar with Rai (yet) but I love the idea of expanding feeder pools beyond usd-pegged assets. And a big thanks to the Reflexer team for putting in the effort on the contracts to get this going. If other members of the community don’t see any causes for concern, I’m completely for getting this stood up. Cheers.

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Very keen on doing this! This is also an interesting exploration of non-USD pegged stable assets.


I love the idea!

Adding stablecoins in mStable that are not pegged to USD is the logical future of mStable protocol. Starting with RAI, the money GOD, is perfect.

A smart contract security audit would be necessary tho.

RAI is resilient and is getting more stable with time, seems fair to me.

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Big fan of RAI, keen to see this!

can’t wait to see this happen!

I agree that RAI should be added as a Feeder Pool: mUSD/RAI.

RAI aribirtage is an opportunity for investors to earn wealth if the protocol adds mETH (it should). Then mETH holders would earn arb rewards by using the mSwap and thus the mStable pool participants earn yield also.

When RED (redemption price) > $RAI, then the RED rate will keep getting pushed up incentivizing arb opportunity so that $RAI and RED reach equilibrium. In this scenario, buy RAI and unlock ETH (mETH) then deposit in AAVE or ALCX. Alternatively, when RED < RAI then it will keep going down, so the protocol can just mint RAI with the current SAFE holdings of ETH (RED::ETH went gown, so debt went down) then sell the RAI at current prices store as mUSD until RAI continues to go down – then buy back RAI when RED > RAI or when makes sense due to ETH investment opportunities.

As RED - $RAI margin decreases relative to gas costs, it makes less sense for a user to make the transactions, the protocol can fill in this gap and collectivize users funds.

Last, RAI should be included in the the treasury as a risk-free-value asset.

This is now formally proposed in this thread: PDP 32: Add mUSD/RAI Feeder Pool


Voted “For” on this proposal because I feel this will be a great step forward for both protocols, and also bring into reality the vision of allowing swaps between pegged and non-pegged stablecoin assets, something that feels very novel and much needed in the space, especially considering the current noise around regulation.