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DeFi developer Ameen Soleimani takes another stab at peg-less stablecoin

DeFi developer Ameen Soleimani takes another stab at peg-less stablecoin
Ethereum developer Ameen Soleimani hopes people will copy HAI for their own stablecoins. Credit: Andrés Tapia

It’s a cypherpunk’s dream: a stable cryptocurrency backed entirely by Ether, rather than real-world assets under the purview of hostile governments.

But RAI never took off. Its founder, prominent Ethereum developer Ameen Soleimani, hopes a newer version called HAI will prove decentralised stablecoins can thrive without being wedded to the dollar and, in turn, a central bank he believes is hellbent on gradually inflating away its value.

People who hold a related token, KITE, will govern HAI. Beginning today, people who’ve used RAI and the Optimism blockchain can check their eligibility for a February 13 airdrop of KITE.

“I would like to have money that doesn’t get rugged — for me, for my friends, for everybody on the planet,” Soleimani told DL News.

“By providing an alternative, it’s a check on other systems that might try to exploit you. So it’s similar in ideology to Bitcoin.”

Bitcoin’s proponents consider it a decentralised hedge against inflation, an appreciating asset beyond the reach of governments that often wield their control of money to cow dissidents. But it has been too volatile to serve as “electronic cash” as first envisioned.

Crypto developers have long sought to fix that by creating decentralised stablecoins such as RAI and Liquity’s LUSD. They have been mostly popular with DeFi natives, but Soleimani hopes that HAI, which is slated to launch February 20, will appeal to a broader range of people due to it its lower cost and a greater range of collateral assets.


Liquity accounted for a paltry 0.13% of the stablecoin market at the end of 2023, according to stablecoin ratings firm Bluechip. With a market capitalisation just under $5 million, RAI was even smaller: its share of the market was just 0.01%.

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About $23 million in Ether backed RAI as of Tuesday.

That’s partly because both rely solely on deposits of Ether to back their stablecoins. That became less appealing after a pair of Ethereum upgrades that de-risked staking, a process in which investors lock up their Ether for a modest annual yield.

Unlike RAI, HAI can be minted against multiple forms of collateral, such as Optimism’s OP and liquid staking tokens like stETH. Users who hold a separate token called KITE will have a say over what collateral HAI will accept.

In a February 12 airdrop, the developers behind the new stablecoin will give away one-fifth of the KITE supply to about 18,000 crypto wallets that belong to people who have used RAI, Optimism, and a prototype version of HAI.

HAI will exist on Optimism, a low-cost blockchain that settles on Ethereum for security purposes, technically called a layer 2 blockchain.

“We wanted to have multiple forms of collateral so that we could work with a broader base of users,” Soleimani said, “and we wanted to do it on a Layer 2 so that we could actually have smaller value loans and more everyday users can use it instead of, like, rich Ethereum whales.”

Another decentralised stablecoin, Maker’s DAI, gradually lost that moniker as it accepted greater amounts of centralised collateral in the form of USDC and US Treasuries.

Soleimani said HAI could guard against mission drift by requiring a higher voting threshold to add collateral than to change other parameters; by delaying implementation of new collateral after a vote, giving anyone unhappy with the decision the opportunity to exit their position; and by limiting the amount of certain collateral users can deposit to mint HAI.

‘Make more float coins’

HAI will also start trading at $1, rather than RAI’s arbitrary $3.14 soft peg. RAI floats freely against that peg, but never too far from it. Similarly, HAI is expected to gradually drift from $1.

Soleimani has taken to calling these tokens “float coins.” He hopes their popularity will show people that “stability” is not synonymous with tracking the value of the dollar.

Market values of top stablecoins

To ensure stability, it uses a self-correcting mechanism akin to a Chinese finger trap: the more someone tries to manipulate its value on the market, the more expensive the effort becomes.

The mechanism has worked well for RAI: according to data gathered by pseudonymous data analyst Kyoronut, RAI has been less volatile relative to the dollar than other world currencies.

While Soleimani hopes HAI becomes a popular stablecoin, its market capitalisation isn’t the only measure of success, he said.

HAI’s code is easy to copy, tweak, and deploy. Soleimani wants people to take advantage of that.

“Make more float coins,” he said.

“In the future that I want, instead of, like, going to the bank to get a loan against your farm or whatever, you and your friends — high tech farmers — would be able to make your own bank. You would have the digital tools to do so.”

Correction: This article was updated on January 7 to clarify that 18,000 wallets will receive KITE in an airdrop. The article originally stated 18,000 KITE would be distributed in the airdrop.