Controller: iRate
The Controller is HAI Protocol’s automated system for adjusting borrowing costs so that HAI trades close to its floating peg.
Floating Peg, Not $1
HAI is not hard-pegged to $1. Instead, it has a floating target price (“redemption price”) that can move slowly over time.
- If market conditions push HAI away from this target, the Controller changes the cost of borrowing to bring it back in line.
- The goal is to keep HAI stable relative to its current target, rather than force it to $1 at all times.
What the Controller Does
Every few seconds, the Controller:
- Reads HAI’s market price from oracles.
- Compares it to the redemption price (the current target).
- Updates the redemption rate - the per-second interest rate applied to all active HAI debt.
By raising or lowering the redemption rate, the Controller changes the incentive to mint or repay HAI:
- Price above target → Borrowing cost decreases → More HAI is minted → Supply expands → Price drifts down.
- Price below target → Borrowing cost increases → Minting slows and debt is repaid → Supply contracts → Price drifts up.
iRate (Integral-Only Mode)
The Controller is based on a PI (Proportional–Integral) control system:
- P term (Proportional) reacts directly to the size of the deviation.
- I term (Integral, or iRate) reacts to the accumulated deviation over time, with old errors fading out.
In HAI’s current configuration:
- P term is disabled (
proportionalGain = 0). - Only the I term is active, so adjustments are driven by the iRate.
This setup focuses on long-term, sustained deviations rather than short-term volatility, producing smoother, more predictable adjustments.
Why iRate Works for HAI
- No overreaction - By ignoring momentary price noise, the system avoids unnecessary swings in borrowing costs.
- Gradual correction - Sustained deviations cause stronger adjustments, while brief ones fade away.
- Market-driven - Borrowing incentives are adjusted automatically without requiring governance votes or manual intervention.
Example
| Market Price | Redemption Price | Controller Action | Expected Result |
|---|---|---|---|
| $1.04 | $1.02 | Lower redemption rate | Cheaper borrowing → More HAI minted |
| $1.00 | $1.02 | Slightly higher rate | Borrowing slows slightly |
| $0.97 | $0.99 | Raise redemption rate | More debt repaid → Supply contracts |
Key Parameters (Simplified)
While the contract has several tunable settings, the most important for the iRate are:
integralGain- How strongly the iRate responds to accumulated deviation.perSecondCumulativeLeak- How quickly past deviations fade from memory.noiseBarrier- Ignores tiny deviations so the rate doesn’t change unnecessarily.- Bounds - Hard limits on how high or low the redemption rate can move.
In short:
The iRate is HAI’s quiet steering wheel - adjusting borrowing costs just enough to keep HAI’s floating peg steady without heavy-handed intervention.