Introducing FLX

The RAI system ungovernance token

UPDATE: modified Incentivizing Early RAI Success and Liquidity. Wrote correct FLX distribution and schedule.

At Reflexer, our mission is to build non pegged and governance minimized stable assets that are completely detached from fiat. To that end, we have developed the GEB Protocol, a smart contract framework which facilitates the creation of such stable assets through autonomous stabilization by a PID controller.

RAI is the embodiment of our greatest goal: a pure ETH backed stable asset with only a few components which can be governed in the long run. We realized early on that, in order for RAI to be successful, we will need three ingredients: a clear roadmap toward removing most human control from the system, a way to protect the protocol and make it resilient to shocks and lastly, a way to pass any remaining governance responsibility to the community.

Governance Removal Roadmap

We believe a public roadmap outlining the exact steps we intend to take for governance minimization so that our community can keep us accountable. To that end, we wrote a detailed, three step plan for automating the protocol and removing the vast majority of governance from the RAI system. We would now like to commit to working our hardest to execute each step by a specific target date, as follows:

• Step 1: target date is 17th of April 2022. At this stage, the liquidation, auction and taxation mechanisms as well as many other core contracts should be governance minimized. This means that only a few parameters can be governable in these contracts from this point onward.
• Step 2: target date is 17th of August 2022. All core contracts with the exception of oracles, saviour contracts and, depending on edge cases found in production, the PID controller should be governance minimized. This means that only a few system parameters should be governed from this point onward. More important though, by this stage all remaining governance should be passed to the community.
• Step 3: at this stage we intend that the community will be completely running the show. They should decide when, how and if any of the remaining components can further detach from human control.

Our goal, and we hope the goal of our community, is to remove control as time goes by. We think the recent trend of governance tokens is detrimental to every protocol’s sustainability in the long run. For this reason, we would like to propose a different kind of tool meant to protect the RAI system and allow the community to strip out remaining control from the system: an ungovernance token.

FLX, the Reflexer Ungovernance Token

The RAI system will have decentralized security incentives through the Reflexer ungovernance token, FLX. The principle of “ungovernance” comes from our desire to progressively remove human control from the RAI system, thus making it socially scalable.

FLX will have two different core functions:

• Lender of last resort: similar to other models such as the Maker protocol, the RAI system will have surplus and debt auctions. Debt auctions will autonomously mint and auction new FLX in case the system is underwater.
• Ungoverning the RAI system: once the vast majority of governance capabilities are completely removed from the system, the community will be able to decide on how, when and if to securely governance minimize any remaining components. FLX will facilitate further ungovernance and allow the community to take decisions on how to remove themselves from discretion over the protocol.

We are currently discussing with the community about a potential third function for FLX: lender of first resort. This would mean that FLX could be added in a staking pool that gets slashed in case there is bad debt in the system. Come over on Discord to debate this idea!

FLX has been deployed at the following address.

FLX Debt Auctions

The RAI system will be able to autonomously mint and auction new FLX tokens in case there is bad debt inside the protocol. Bad debt will result when the protocol is not able to successfully settle collateral auctions.

For more details about debt auctions, you can check the documentation.

FLX Distribution

FLX can be generated in two different ways: (1) the initial FLX genesis; and (2) minting of FLX by the RAI system pursuant to debt auctions.

1 million FLX have been minted at genesis and will progressively be released from now through approximately August 2023. The currently anticipated allocation of the genesis FLX is as follows:

• 35% of the genesis FLX will be contributed to the GEB Foundation, a member-less Cayman Islands foundation company devoted to fostering research, development and support of the GEB Protocol on which RAI is based (the “Foundation Supply”).
• Out of the Foundation Supply, we intend that 30 FLX will be given to every address that interacted with Proto RAI in any way. There are a total of 229 addresses that were pulled from the chain using this script. This sums up to 0.687% of the genesis FLX.
• 34.313% of the genesis FLX, out of the Foundation Supply, will be used by the GEB Foundation for various purposes consistent with its mission, including: incentivizing RAI liquidity and security, rewarding developers who build on top of the protocol through a grant program and contributing to a DAO treasury.
• 3.39% of the genesis FLX will be distributed to DAOs that contributed funding and helped Reflexer bootstrap. This allocation is subject to a 2 year unlock schedule that will start on 15th of April 2021; in the first year the whole portion is fully locked.
• 21% of the genesis FLX will be distributed to early supporters/backers that were essential in helping us pioneer PID control in smart contracts, perform our audits, contribute funding and build infrastructure for the protocol. This allocation is subject to a 2 year unlock schedule that will start on 15th of April 2021; in the first year the whole portion is fully locked.
• 11.3% of the genesis FLX to miscellaneous investors of Reflexer Labs, Inc., a for-profit Delaware corporation that performed much of the initial development and testing of the GEB Protocol (“Reflexer Labs”), with a 2 year unlock schedule that will start on 15th of April 2021; in the first year the whole portion is fully locked.
• 20% of the genesis FLX to Reflexer employees, advisors and service providers, as well as potentially other service providers to entities or organizations involved in developing the GEB Protocol or RAI. These awards are subject to various service-related terms and conditions, including, in most cases, a 3-year service-based vesting schedule starting around the commencement of each person’s service relationship. Overlapping with such vesting schedules will be the same lockup schedule as referred to above: a 2-year unlock schedule that will start on 15th of April 2021; in the first year the whole portion is fully locked.
• 9.31% of the genesis FLX will be the corporate property of Reflexer Labs to be used in its sole discretion. Such FLX is not subject to vesting or any lockup period. Please see the disclaimer at the end of this announcement for important information regarding the role of Reflexer Labs.

Incentivizing Early RAI Success and Liquidity

On 17th of February we announced the launch of RAI!

In order for RAI to achieve its desired functionality of maintaining stability without a peg, it is important for it to be liquid and for our community to have their incentives aligned with the protocol’s.

For this reason, we announced our retroactive rewards program meant to encourage RAI liquidity before the official rewards program starts. As previously announced, we intend to offer retroactive rewards using different strategies. The intended retroactive rewards allocation is as follows:

• 668 FLX per day of the genesis FLX, out of the Foundation Supply, starting on 17th of February 2021 and lasting until the start of the official rewards program or until the 60th day from the moment of the RAI launch announcement (until April 17th 2021), whichever date comes first
• 334 FLX per day of the genesis FLX, out of the Foundation Supply, starting on 18th of April 2021 and lasting until the start of the official rewards program or for maximum 90 days, whichever date comes first

At this time, the exact date of the first retroactive reward distribution is still undetermined. We seek to keep the community up to date on any news regarding distribution using Discord and Twitter. Thank you for your patience and for all the support you give to RAI 🙏

Legal Disclaimers

This announcement has been written and published by Reflexer Labs, Inc., a for-profit Delaware corporation (“Reflexer Labs”). The directors and officers of Reflexer Labs owe fiduciary and contractual duties solely to Reflexer Labs’ investors. FLX and RAI confer no information, voting, economic, fiduciary, contract or other rights against or with respect to the assets or personnel of Reflexer Labs. The interests of Reflexer Labs and its directors, officers and investors may differ materially from the interests of FLX holders, RAI users and other RAI system participants. Reflexer Labs provides no guarantee, commitment, or undertaking to utilize any of its assets, funds, properties or personnel — including, without limitation, the 9.31% of the genesis FLX allocated to Reflexer Labs — for the benefit of FLX holders, RAI users or other RAI system participants. Reflexer Labs does not owe, and does not intend to assume, any duties or obligations to FLX holders, RAI users or other RAI system participants, other than duties or obligations arising under laws of general application, such as non-waivable torts. Moreover, Reflexer Labs has various legal, fiduciary and contractual obligations that could conflict with the interests of FLX holders, RAI users and other RAI system participants.

Each component of the GEB Protocol and RAI System is licensed for use to the public under the license set forth in the corresponding repository at github.com/reflexer-labs. Such licenses are subject to important warranty disclaimers and limitations of liability. To the maximum extent permitted by applicable law, all such software is being provided on an as-is, where-is basis, with no representations or warranties being made to FLX holders, RAI users or other RAI system participants and with no liability to Reflexer Labs or any other person involved in the development of the GEB Protocol or RAI System. The statements set forth in this announcement also are not intended to be representations, warranties, guarantees or assumptions of duty or liability of any kind, and Reflexer Labs hereby disclaims the foregoing and will not be liable for any damages arising from use of the GEB Protocol, RAI System, RAI or FLX. In the event of any conflict or inconsistency between this announcement or any other communication and the terms of any software license involved in the GEB Protocol or RAI System, the terms of the software license shall govern to the exclusion of this announcement and such other communications.

The forward-looking statements in this announcement are subject to numerous assumptions, risks and uncertainties which are subject to change over time. Such assumptions, risks and uncertainties could cause actual results or developments to differ materially from the results and developments anticipated by us. Even if our anticipated results and developments are realized, such results and developments may nevertheless fail to achieve any or all of the expected benefits anticipated by this announcement. We reserve the right to change the plans, expectations and intentions stated and implied herein at any time and for any reason or no reason, in our sole and absolute discretion, and we undertake no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

This announcement is not intended to provide legal, financial or investment or other advice and we recommend that you do not rely on, and do not make any financial or other decision based, on this announcement.