20221207

I have been spending some time this morning learning about Reflexer and the pegged-asset RAI. I am going to create bullet list of decisions her because the RAI explainer is not designed to create a list of trading decisions.

• When the redemption rate is negative, there is an incentive for people to create more indexes
• A positive redemption rate causes a reduction in the collateralization ratio encouraging users to repay debt or add more collateral

It seems to be that simple. The redemption rate this morning is -5.706% providing a strong incentive for people to create more reflex-indexes. The minimum borrow is almost 3,000 RAI and it appears to be outside of my ability to afford. I need to work on creating a template for the borrow and maintenance of the collateralization ratio.

The appearance of being outside my ability to afford the minimum has been confirmed. It will take almost 29,000 USD to create the minimum position of 3,000 RAI.

Liquity has a borrow rate of 0.5% and Reflexer has a borrow rate of 2.0%. Liquity has a powerful saving incentive while Reflexer has a powerful borrow incentive. If I can figure out a way to achieve the minimum, that 2.0% rate is much more favorable than other rates I am paying for personal loans.

The Convex RAI3CRV pool is currently generating a 2.47% APY. Combine that with the 2.0% borrow rate and the net of 47 bps is not much of an incentive. Well, this was a good exercise.