Crypto Gloss

Raft

Raft was an Ethereum DeFi protocol for borrowing its R stablecoin against crypto collateral. Its post-mortem records a major November 2023 exploit and a pause of affected contracts, while later project material described a V2 design; original product descriptions do not prove a current service is operating or safe to use.

Overview

Launched in 2023, Raft differentiated itself in the crowded LSDfi CDP space through two key parameters: higher LTV (90% versus Lybra’s 62.5% or MakerDAO’s lower wstETH ratios) and its one-step leverage feature. By accepting initially focused on wstETH collateral (focused design rather than multi-asset complexity), Raft could calibrate its risk parameters precisely around Lido’s stETH stability and Ethereum’s underlying security. The R stablecoin targets $1 USD peg using redemption mechanics borrowed from Liquity’s model.

R Stablecoin

R is Raft’s USD-pegged stablecoin:

Issuance:

  • Users deposit wstETH as collateral
  • Borrow R at high LTV in its original, version-specific vault design (minimum 111% collateral ratio)
  • One-time minting fee (no ongoing interest — borrowing is effectively free while collateral grows)

Peg mechanisms:

  • Redemption floor — R is always redeemable for $1 of wstETH at face value, preventing R from trading below $1
  • Hard liquidations — positions below minimum collateral ratio are liquidated at favorable prices, restoring system health
  • Stability pool — R holders can deposit into the Stability Pool to absorb liquidations at a discount (similar to Liquity’s Stability Pool model)

wstETH yield dynamics:

  • Because wstETH accrues staking yield, the debt-to-collateral ratio improves naturally over time for unchanged R debt
  • Borrowers effectively get partially self-repaying loans (stETH yield offsets the static R debt value)

One-Step Leverage

Raft’s signature UX feature:

Without one-step leverage, building a leveraged wstETH position requires:

  1. Deposit wstETH → borrow R
  2. Convert R to ETH/USDC on a DEX
  3. Convert ETH to stETH, wrap to wstETH
  4. Deposit new wstETH → borrow more R
  5. Repeat multiple times to achieve target leverage

With Raft one-step leverage:

  1. User specifies desired leverage (e.g., 5× wstETH exposure)
  2. Raft uses a flash loan to borrow the full required USDC/ETH in one transaction
  3. Converts to stETH → wstETH in one step
  4. Opens the full CDP position at target leverage
  5. Repays flash loan from the CDP’s borrowed R
  6. User has a leveraged wstETH position in one click

This dramatically reduces gas costs and execution complexity for leveraged staking strategies.

Stability Pool

Raft’s Stability Pool follows Liquity’s design:

  • R holders voluntarily deposit into the Stability Pool
  • When positions are liquidated, the Stability Pool absorbs the bad debt (R is burned) and receives the liquidated wstETH at a discount (~10% below market value at liquidation)
  • Stability Pool participants earn from this discount, effectively buying wstETH below market price during liquidations
  • Additionally, Stability Pool participants earn RAFT token incentives

RAFT Token

RAFT is the protocol’s governance token:

  • Governance — RAFT holders vote on collateral parameters, stability fee adjustments, and protocol upgrades
  • Staking — RAFT stakers earn from protocol fee revenue
  • Incentives — RAFT distributed to Stability Pool depositors and R liquidity providers

Current Documentation and Risks

Raft’s post-mortem says the November 2023 incident created about $6.7 million in unbacked R and that contracts were paused; then-current borrowers could repay and withdraw collateral. A later V2 announcement described a Peg Stability Module, an R Savings Rate and collateral plans. These are dated statements, not a live status check; confirm current contracts, front ends and withdrawal paths before relying on them.

Social Media Sentiment

The small Reddit sample around Raft is tied mainly to older yield strategies and the 2023 exploit. One r/ethtrader thread joked about funds burned by the attacker, while the event raised security and recovery concerns; a few posts cannot represent current users or today’s sentiment. Read the discussion.

Last updated: 2026-10

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