# HAI - A decentralized and overcollateralized stablecoin

**Published by:** [Everything Blockchain](https://paragraph.com/@everythingblockchain.com/)
**Published on:** 2024-07-01
**Categories:** blockchain, crypto, cryptocurrency, optimism
**URL:** https://paragraph.com/@everythingblockchain.com/hai-a-decentralized-and-overcollateralized-stablecoin

## Content

Ever heard the saying “Don’t get high on your own supply”? Well, HAI flips that on its head Use LSTs & OP native assets as collateral to get HAI — a decentralized and overcollateralized stablecoin Ready to get HAI? Let’s dive in 1/ Introduction to @letsgethai Largest CDP protocol on #Optimism Where you can deposit collateral like WETH, wstETH, rETH, OP, etc., and take a loan in HAI Over 45% of TVL across all CDPs on OP is in HAI Vaults 2/ HAI An over-collateralized CDP-minted stablecoin Has a diverse collateral base including LSDs & other tokens Uses a floating peg, unlike USDC/USDT, which are hard pegged to the $ The peg is set by a Proportional-Integral-Derivative (PID) controller to induce stability 3/ HAI has two important prices • Market Price (MP): What people are paying for HAI in the market Redemption Price (RP): What the HAI system believes HAI should be worth, initially $1 4/ HAI mechanics The system uses a smart PI controller to adjust HAI’s value If MP > RP The system sets a negative interest rate, making it cheaper to owe HAI over time This encourages selling HAI to stabilize the price 5/ If MP < RP The system sets a positive interest rate, making it more expensive to owe HAI over time This prompts buying HAI to pay off debts, pushing the price up 6/ These adjustments help keep HAI’s value close to $1, balancing supply and demand Basically, HAI’s smart controller tweaks interest rates based on market conditions to keep its value stable HAI is a multi-collateral fork of RAI @reflexerfinance with the same basic mechanics 7/ Simplified The market price of HAI can’t deviate from the RP for too long due to smart incentives If the price is too high, people borrow and sell HAI If the price is too low, borrowers buy back HAI This helps keep HAI’s value stable and in line with its target RP 8/ Ensuring that it remains a reliable and predictable stablecoin Users must carefully manage HAI minting If collateral value drops too much, it can be seized and sold in a collateral auction to protect HAI’s value and ensure confidence in the protocol 9/ KITE Governance token for ensuring a decentralized and community-driven approach KITE holders can vote on system changes and the protocol’s development, like adding/removing collateral types 10/ Plus, HAI boasts the best dapp design in the game It’s user-friendly and efficient Easy to deposit collateral and take out loans Check it out for yourself and get HAI on your own supply 11/ Official Links Discord https://discord.com/invite/pX8m6zXNKu… X @letsgethai Telegram https://t.me/+0iIhX0f9DDAxODE5… Website https://www.letsgethai.com/

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