ETH 2x FLI Backed by RAI

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Overview

RAI is a non-pegged stable asset solely backed by ETH. Together with Fire Eyes DAO, we presented RAI in a separate proposal for the Index community a while ago.

This post is meant as a temperature check on the idea of a ETH 2x FLI backed by RAI or a Uniswap RAI/ETH LP token.

Parameters

The proposed parameters for a RAI backed FLI would be similar to the ones for the ETH backed version.

  • Underlying Asset: RAI or Uniswap v2 RAI/ETH LP
  • Target Leverage Ratio: 2
  • DeFi Lending Protocol: Rari Capital Fuse/CREAM
  • Maximum Leverage Ratio: 2.3
  • Minimum Leverage Ratio : 1.7
  • Recentering Speed : 5%
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I don’t see the benefit of different underlying collateral for the product. Fluctuating RAI price would make maintaining target leverage and volatility decay bigger.

If we were to, CREAM is a fork of Compound so would be the easiest platform to integrate for FLI.

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