Core Economic Mechanism
RAI operates through three core pillars, regulated by key policy levers:
Core Mechanisms:
Staking (Internal Coordination): Users lock their RAI tokens to receive rewards, demonstrating long-term commitment and helping stabilize the ecosystem.
Bonding (Price Coordination): Users purchase RAI tokens at a discount by contributing assets (stablecoins or RWA tokens) to the treasury. This increases reserves and liquidity.
Treasury (Reserve Support): Stores assets that back the value of RAI tokens, including stablecoins and RWAs. The Risk-Free Value (RFV) acts as the baseline value backing each token.
Key Policy Levers:
Staking Reward Rate & APY: Determines the number of new RAI tokens minted for stakers. This impacts the annual percentage yield (APY), which is the primary indicator of internal coordination.
Note: APY is inversely proportional to ecosystem health — lower APY signals higher system stability.
Bond Control Variable (BCV): Adjusts the discount rate of bonds to manage the treasury’s composition, maintaining a balance between stablecoins and RWA assets.
Premium Over RFV: Reflects the market price of RAI relative to its RFV — a key signal of market confidence in the effectiveness of RAI's internal coordination mechanism.
Role of AI and DeFi:
AI helps optimize these levers by predicting market trends and adjusting staking rewards or bond discounts accordingly.
DeFi infrastructure enables the seamless execution of these mechanisms, providing real-time transaction processing and analysis.
Together, this system creates a self-regulating, decentralized economy where incentives are aligned through intelligent coordination rather than centralized control.
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