Remainder of RAI in DXdao Treasury, to Hold or Not to Hold

Consulting the Reflexer Finance dashboard at, we see the following:

The market price of RAI is still 1.4 cents above the redemption price, and the pRate (proportional Rate) is still -3.635%, with the iRate (integral Rate) being -9.929%, giving a current total Annual Redemption Rate of -13.202%. If I understand these rates correctly, the iRate should approach the pRate over time (I think something like a few months given a steady pRate but not sure exactly how quickly). This means that the Annual Redemption Rate is currently -13.202% and approaching 2 * -3.635% = -7.27%.

As outlined in this forum post, DXdao has already offloaded a majority of its RAI, but still has $810K worth in the treasury.

The goal of holding RAI for DXdao is to gain stability for the treasury in a decentralized way, thus helping to secure runway for DXdao. This certainly has value, but personally I think paying 7% per year is too high, and if this rate sustains at similar levels, DXdao should offload the remainder of its RAI for dollar pegged stables. It is an unknown how the market price of RAI will evolve and how the Annual Redemption Rate will evolve in response. The system is incentivizing, in theory anyways, the market price to come down closer to the redemption price, so there is some argument that this rate should improve. But it’s unclear. I am starting to wonder if the conclusion is that RAI is not sufficiently stable for treasury diversification needs. Would be great to get some community feedback on this question. 7% of $800K is $56K per year.


For context I ran the number in this sheet: RAI CALC - Google Sheets

DXdao lost 2.5% of the $2.9M RAI it acquired towards the end of last year (this also includes selling RAI into LUSD at a premium – LUSD is above peg). On the other hand, if DXdao had held the ETH used to acquire RAI, that ETH would have lost 54.9% of value. So all in all I do see the RAI trade as a successful trade.

I’m a big advocate of RAI due to the extent of its decentralization. However, I also acknowledge John’s concerns regarding the negative carry.

DLABS would support further offloading the remainder of RAI in the treasury.


The “RAI Trade” was part of an effort to diversify into stable assets. And relative to other stable assets, RAI has performed poorly, and looks set to continue performing poorly for an unknown amount of time. Though I do agree that its pure decentralization is what makes RAI attractive, and in that sense it was worth exploring.


I think a proposal should include a commitment to repurchase Rai if the annual redemption rate > -1% for 30 days continuously.


Great information, thanks for sharing

I would like to go with some fundamental analysis and get some prominent results before taking any decisions on trading