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| Algorithmic [[stablecoin]]
| | JIAFEI SEXY PRODUCTS BUY NFT AUTO DELETER FOR 69 YUAN |
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| ==Basics ==
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| * Started in / Announced on: [https://medium.com/fei-protocol/introducing-fei-protocol-2db79bd7a82b 11-1-2021]
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| * [[Mainnet]] release: "launch later in Q1 2021" according to the announcement. [https://www.coindesk.com/coinbase-naval-framework-ventures-19m-raise-fei-stablecoin Update]: Set for [https://medium.com/fei-protocol/fei-protocol-genesis-group-d6cf1d266139 22-3-2021]
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| * Based in:
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| == History ==
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| * From the [https://medium.com/fei-protocol/introducing-fei-protocol-2db79bd7a82b announcement] (11-1-2021):
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| "''The inspiration for the vision of [https://fei.money/ Fei Protocol] comes from an ancient stone currency — [https://en.wikipedia.org/wiki/Rai_stones Rai, or Fei], of the Micronesian island of Yap. We hope that the FEI stablecoin exhibits the same stability, [[simplicity]], and ubiquity as its stone counterpart."''
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| == Audits & Exploits ==
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| *[https://weekinethereum.substack.com/p/week-in-ethereum-news-may-16-2021?token=eyJ1c2VyX2lkIjoxMzk3OTAwLCJwb3N0X2lkIjozNjM4NDU4NSwiXyI6IllKNVRlIiwiaWF0IjoxNjIxMjIyNTA1LCJleHAiOjE2MjEyMjYxMDUsImlzcyI6InB1Yi0xMDcxIiwic3ViIjoicG9zdC1yZWFjdGlvbiJ9.7u_PzlNHalm6 From] [[Week In Ethereum|Week in Ethereum]] (17-5-2021):
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| ''"Fei [https://medium.com/fei-protocol/fei-bonding-curve-bug-post-mortem-98d2c6f271e9 awards] $800k [[Bug bounty|bounty]] for [[Bonding Curves|bonding curve]] price manipulation vulnerability."''
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| *Had audits [https://consensys.net/diligence/audits/2021/01/fei-protocol/ from] [[Consensys|Consensys Diligence]] [https://blog.openzeppelin.com/fei-protocol-audit/ and] [[OpenZeppelin|Open Zeppelin]] (7-4-2021).
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| *[https://cryptobriefing.com/fei-has-achieved-price-stability-after-initial-failure/ From] [[Crypto Briefing]] (4-5-2021):
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| ''"The team is conducting an audit so it can reinstate price stabilization mechanisms that were halted due to a vulnerability."''
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| === Bugs/Exploits ===
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| *[https://www.rekt.news/fei-rekt/ From] [[Rekt]] (7-4-2021):
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| ''"During the much hyped [[Token]] [[Genesis]] Event, users were able to [[mint]] FEI from the [[ETH]] [[Bonding Curves|bonding curve]] for up to a 50% discount. The terms and conditions of the discount meant that participants would only get this discount if under $250m in ETH was contributed. As $1.3B in ETH was collected at launch, this discount was taken away, and the ETH was irreversibly given to the project for their “Protocol Controlled Value” model. The entirety of this PCV was initially used to build [[liquidity]] on [[Uniswap]]. At one point, the Uniswap FEI/ETH pool had over $2.6B in liquidity, created from the ETH raised during the initial sale. The initial peg was lost mainly due to the “pre-swap” [[option]] allowing participants to automatically swap their FEI [[tokens]] for TRIBE upon launch, which created millions of dollars of selling pressure."''
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| *[https://decrypt.co/64236/1-2-billion-stablecoin-project-fei-stumbles-out-of-the-gate?utm_source=telegram&utm_medium=social&utm_campaign=smt From] [[Decrypt]] (7-4-2021):
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| ''"The Fei team [https://twitter.com/feiprotocol/status/1379632480504881154 disclosed] that it had been alerted to a vulnerability through its [[bug bounty]] program. After identifying the bug, the team decided to "suspend mint rewards" on the protocol. These are the incentives for anyone buying Fei, designed to help it return its value toward [[parity]] with the dollar. As a result, this led to the token’s price falling even further. "Due to a bug, the team disabled the "buy" incentives, leaving only "sell" disincentives. So the FEI/[[ETH]] pool is looking very scary," [[tweeted]] [[Robert Leshner]]"''
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| == Governance ==
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| === Admin Keys ===
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| === DAO ===
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| * From the [https://medium.com/fei-protocol/introducing-fei-protocol-2db79bd7a82b announcement] (11-1-2021):
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| "''Fei Protocol will launch with a fully [[decentralized]] [[DAO]] on day one. The TRIBE token controls [[the DAO]]. TRIBE holders can vote on the following actions among others:''
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| #''Adding new bonding curves in new tokens or adjusting price functions of existing [[curve]](s)''
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| #''Adjusting the allocation of PCV for new incoming funding or existing PCV''
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| ''The Fei Protocol DAO will be both powerful and governance-minimized. FEI stability does not require any active intervention by governance."''
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| === Treasury ===
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| *[https://medium.com/fei-protocol/the-tribe-token-distribution-887f26169e44 40%] of the token distribution goes towards the DAO treasury (10-2-2021).
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| *[https://vote.balancer.fi/#/proposal/0x7972e1700ac30495ad936038b66055b1e6420c3de5ed1fec963abe5faa2d16a3 Voted] for a token swap with [[Balancer (BAL)|Balancer]] (11-2021):
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| ''"200,000 BAL from the Ecosystem Fund would be exchanged for the equivalent USD value of TRIBE and FEI in equal proportions from Fei DAO Treasury."''
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| == Token ==
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| === Launch ===
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| * From the [https://medium.com/fei-protocol/introducing-fei-protocol-2db79bd7a82b announcement] (11-1-2021):
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| "''To mitigate [[Frontrunners|frontrunning]] and unequal early distributions, Fei Protocol will include a “Genesis Period.” The Genesis Period will be a time period of 2–3 days in which early adopters can pool their [[ETH]]. This group will be known as the Genesis Group. Members of the Genesis Group [[earn]] a shared pro-rata percentage of the first bonding curve [[transaction]]. This is [https://medium.com/hegic/join-hegic-initial-bonding-curve-offering-d1746a32a552 similar] to the [[Hegic]] [[IBCO]]. Using this approach, access to the earliest FEI on the bonding curve will be open to all with equal opportunity. As an additional reward, the Genesis Group earns 10% of the total TRIBE supply pro-rata.''
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| ''The Genesis Group completion will kick off an Initial [[DeFi]] Offering of the TRIBE token. The listing will be on [[Uniswap]], denominated in FEI and TRIBE."''
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| * [https://www.rekt.news/fei-rekt/ From] [[Rekt]] (7-4-2021):
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| ''"During the much hyped Token Genesis Event, users were able to mint FEI from the ETH bonding curve for up to a 50% discount. This also made them eligible for an [[airdrop]] of the protocol governance token TRIBE, which seemed to represent an appealing opportunity for many, as over 17,000 unique [[addresses]] participated in the event."''
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| * The launch was [https://decrypt.co/64236/1-2-billion-stablecoin-project-fei-stumbles-out-of-the-gate?utm_source=telegram&utm_medium=social&utm_campaign=smt less than smooth] (8-4-2021):
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| ''"The coin traded below parity with the US dollar since its [https://decrypt.co/63924/investment-round-fei-labs-raise-almost-1-3-billion $1.2 billion launch] [and] a bug has emerged that’s resulted in some users struggling to sell their coins. As the incentive mechanism has failed, the coin’s price has continued to plunge, making it prohibitively more expensive to sell."''
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| === Token allocation ===
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| * From the [https://medium.com/fei-protocol/introducing-fei-protocol-2db79bd7a82b announcement] (11-1-2021):
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| "''The FEI [[stablecoin]] has an uncapped supply that tracks demand. FEI enters circulation via sale along a [[bonding curve]]. This curve approaches and fixes at the $1 peg. When new demand for FEI arises, users can acquire it by buying on the bonding curve. The price function will start low to reward early adopters for purchasing FEI. Fei Protocol will support the creation of bonding curves denominated in any [[ERC20]]. The launch will contain only a single curve denominated in [[ETH]].''
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| ''The protocol allocates a portion of the TRIBE token to a FEI [[staking]] pool. Users can deposit FEI and receive a pro-rata percentage of the TRIBE drip into the pool. The development team and investors retain another portion. A percentage will be split between the Genesis Group and Initial DeFi Offering. The remaining TRIBE stays in a treasury controlled by governance."''
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| * From their [https://medium.com/fei-protocol/the-tribe-token-distribution-887f26169e44 blog] (10-2-2021):
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| ''"The total initial supply of TRIBE is 1 billion. We have this token distribution broken down as follows, with Team and Investors rounded to the nearest percent:''
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| * ''40% DAO Treasury''
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| * ''20% [[Initial DEX Offering]] (IDO)''
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| * ''13% FEI Core Team''
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| * ''10% Genesis Group''
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| * ''10% Staking Rewards''
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| * ''5% Investors''
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| * ''2% Grants"''
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| === Utility ===
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| * TRIBE holders can [https://medium.com/fei-protocol/introducing-fei-protocol-2db79bd7a82b vote] (11-1-2021) on [[governance]] within the protocol.
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| === Token Details ===
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| === Stablecoin ===
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| * FEI is the stablecoin of the protocol.
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| *The stablecoin is [https://cryptobriefing.com/fei-has-achieved-price-stability-after-initial-failure/ now] (4-5-2021) trading at $0.97 after previously falling to $0.70.
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| == Coin Distribution ==
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| == Technology ==
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| *[[Whitepaper]] can be found [https://fei.money/static/media/whitepaper.7d5e2986.pdf here].
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| * Code can be viewed [insert here].
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| * Built on: [[Ethereum]], [[Balancer (BAL)|Balancer]]
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| === How it works ===
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| * [https://thedailygwei.substack.com/p/the-holy-grail-of-stablecoins-the?token=eyJ1c2VyX2lkIjoxMzk3OTAwLCJwb3N0X2lkIjozMTI4MTc0NywiXyI6ImM5eFJuIiwiaWF0IjoxNjEwNTQzMzMxLCJleHAiOjE2MTA1NDY5MzEsImlzcyI6InB1Yi01Mjg5MyIsInN1YiI6InBvc3QtcmVhY3Rpb24ifQ.FpYy8sI6_6kzKKgBYYoTj_TXvtF7hCNQ_oagy-sAYSU From] [[Daily Gwei]] (13-1-2021):
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| "''the tl;dr is that it uses different automated mechanisms and logic in order to maintain its peg to 1 US dollar. Though the key difference between Fei and some of the other [[algorithmic stablecoins]] is that it doesn’t seem to rely on extreme speculation order to achieve stability - it instead uses a novel [[bonding curve]] mechanism."''
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| * From the [https://medium.com/fei-protocol/introducing-fei-protocol-2db79bd7a82b announcement] (11-1-2021):
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| "''Fei Protocol achieves this goal by incentivizing [[Uniswap]] trading volume with mints and [[burns]]. These incentives apply directly to the trader’s [[balance]], in proportion to the distance from the peg. The protocol incentivizes traders via mint to return the price back up to the peg. The formulas used ensure that all volatility below the peg is net deflationary. This will help bring the supply down to the right level relative to the current demand. The incentives only apply to trades when the spot price is below the peg. The side above the peg is taken care of by the [[arbitrage]] loop with the bonding curve."''
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| * [https://www.coindesk.com/coinbase-naval-framework-ventures-19m-raise-fei-stablecoin From] [[CoinDesk]] (9-3-2021):
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| ''"FEI works on a straightforward transactional basis. “Users can buy FEI from the protocol, and the protocol takes those assets in reserve, which we call protocol controlled value,” Santoro explained. In other words, users don’t [[stake]] ETH, Ethereum’s [[native currency]]; they buy FEI. The asset traded belongs to the Fei protocol after the trade.''
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| ''“That’s sort of where the magic of FEI is. The assets in reserve could be under-collateralized, they can be over-collateralized,” Santoro explained. Further, the assets would be deployed elsewhere, such as on the secondary market or – later – in yield-generating projects.''
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| ''“If you want to get more FEI, you just buy it for a dollar [worth of something] from the protocol,” he said. There’s no debt that has to be maintained by users, as there is on [[MakerDAO]], which generates the stablecoin DAI. The protocol would simply mint FEI as needed. You can’t directly redeem ETH from the protocol. You have to go to a secondary market,” Santoro said, but the Fei protocol will be placing the ETH it takes there anyway."''
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| * [https://thedailygwei.substack.com/p/a-terrible-feight-the-daily-gwei?token=eyJ1c2VyX2lkIjoxMzk3OTAwLCJwb3N0X2lkIjozNDc4NzI1MywiXyI6ImM4SUltIiwiaWF0IjoxNjE3OTU0MTQ3LCJleHAiOjE2MTc5NTc3NDcsImlzcyI6InB1Yi01Mjg5MyIsInN1YiI6InBvc3QtcmVhY3Rpb24ifQ.pgz98vPiy5kCY From] the Daily [[Gwei]] (5-4-2021):
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| ''"In plain English, the direct incentives mechanism kicks in when Fei is above or below peg - if it’s below, then a [[burn]] mechanism kicks in which gets exponentially worse the further the price of Fei is from its peg. For example, if you want to sell Fei at its current price of $0.96 then you will be taking a ~30% haircut on that sale due to the [[Burn Mechanisms|burn mechanism]]."''
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| === Fees ===
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| === Upgrades ===
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| *After the failed launch and subsequent bug, the team announced it would take away the penalty for selling below the peg. Some wondered how this was done without a government vote with the governance token TRIBE.
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| *[https://cryptobriefing.com/fei-has-achieved-price-stability-after-initial-failure/ From] [[Crypto Briefing]] (4-5-2021):
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| ''"The governance community has voted to allocate 300,000 ETH to users, and it will also double [[staking rewards]]."''
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| * Fei V2 was [https://twitter.com/feiprotocol/status/1445852580152688643 announced] (7-10-2021), relying on [[Balancer (BAL)|Balancer]] V2's managed pools.
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| === Staking ===
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| * From the [https://medium.com/fei-protocol/introducing-fei-protocol-2db79bd7a82b announcement] (11-1-2021):
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| "''The protocol allocates a portion of the TRIBE token to a FEI [[staking]] pool. Users can deposit FEI and receive a pro-rata percentage of the TRIBE drip into the pool."''
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| === Liquidity Mining ===
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| === Scaling ===
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| === Different Implementations ===
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| === Interoperability ===
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| === Other Details ===
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| ==== Protocol Controlled Value (PCV) ====
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| * From the [https://medium.com/fei-protocol/introducing-fei-protocol-2db79bd7a82b announcement] (11-1-2021):
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| "''Users cannot sell FEI on the bonding curve. Instead, the protocol retains the incoming [[ETH]] as Protocol Controlled Value (PCV). Fei Protocol deploys the PCV to create a [[liquid]] secondary market where users can sell FEI back into ETH. This is a stronger use case than the IOU common to most [[TVL]] applications, as the PCV is permanent. It will initially allocate 100% of the PCV funded by the ETH bonding curve to a [[Uniswap]] pool denominated in ETH/FEI. [[Governance]] can reallocate PCV to other platforms in the future if the use case is clear."''
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| == Oracle Method ==
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| == Privacy Method ==
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| == Compliance ==
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| == Their Other Projects ==
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| === Liquidty as a Service (Laa$) ===
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| * [https://ournetwork.substack.com/p/ournetwork-issue-97?token=eyJ1c2VyX2lkIjoxMzk3OTAwLCJwb3N0X2lkIjo0Mzk1ODIzNiwiXyI6IjNtM29qIiwiaWF0IjoxNjM2OTU4NDQyLCJleHAiOjE2MzY5NjIwNDIsImlzcyI6InB1Yi0yMTM2MiIsInN1YiI6InBvc3QtcmVhY3Rpb24ifQ.q5R3w_u2vJKodl5iAwJY48QPqbZM From] [[Our Network]] (13-11-2021):
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| ''"Fei has partnered with [[Ondo]] to launch [https://medium.com/fei-protocol/if-you-are-part-of-a-dao-or-protocol-that-wants-to-create-liquidity-for-your-token-without-f49a01f02863 Liquidity as a Service (Laa$)]. Laa$ allows protocols to create [[liquidity]] in a manner that is significantly less expensive than traditional [[Liquidity Mining|liquidity mining]]. The initial launch group has generated $100M TVL across [[Uniswap (UNI)|Uniswap]] pools for [[Gro]], [[Synapse]], [[UMA (UMA)|UMA]], [[Kylin]], [[NEAR (NEAR)|Near]], [[PoolTogether (POOL)|PoolTogether]], [[ShapeShift (FOX)|Shapeshift]], and [[MStable (MTA)|mStable]]."''
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| == Roadmap ==
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| * Can be found [Insert link here].
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| * From the [https://medium.com/fei-protocol/introducing-fei-protocol-2db79bd7a82b announcement] (11-1-2021):
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| "<em>The mission of Fei Protocol is to create an entirely [[decentralized]] stablecoin. Therefore it is critical that no tokens issued by trusted third-parties (e.g. [[USDC]], [[USDT]], [[wBTC]]) be used as collateral on the bonding curve. This is a stance the development team hopes will be shared by the governance community post-launch."</em>
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| == Usage ==
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| === Projects that use or built on it ===
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| == Competition ==
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| * Other (algorithmic) [[stablecoins]] like [[Float Protocol (FLOAT)|Float Protocol]] and [[Reflexer (RAI)|RAI]]. Float created a [https://floatprotocol.medium.com/float-and-the-money-gods-5509d41c9b3a write up] with its differences (20-3-2021).
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| == Pros and Cons ==
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| === Pros ===
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| === Cons ===
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| * From a [https://floatprotocol.medium.com/float-and-the-money-gods-5509d41c9b3a comparison] by competitor [[Float Protocol (FLOAT)|Float Protocol]] (20-3-2021):
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| ''"One risk of Fei is a negative spiral brought on by a sharp drop in the price of its collateral. This is an unavoidable risk since it is trying to defend a fixed $1 peg backed by volatile collateral. Should the price drop in its collateral be large enough, the long-term ability of the system to hold its peg may be questioned and a “bank-run” could be initiated.''
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| ''In this scenario, as we have seen with non-backed stablecoins, the speculators supporting the price would disappear very fast (meaning direct incentives would not be enough to hold peg). Further, the system would need to protect the peg through its “peg reweights”. However, due to [[impermanent loss]] and the fact that reweights are essentially using collateral to support the price on the open market, a negative feedback loop may ensue. Collateral sold to support the price means there is less collateral to support the price later, creating a lack of confidence that weakens the price and causes more collateral to be sold. This situation could continue until a full-death spiral is achieved.''
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| ''One of the backstops to this death-spiral which Fei mention is that TRIBE (the governance token of the system) could be used to re-collateralise the system. However, this is something that would need to be an emergency vote-type- decision to work. Should it ever need to be used, the question would be whether the protocol could recover for fear of the situation arising again.''
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| ''Regardless of this, a positive aspect of Fei is that it is more capital efficient than over-collateralised stablecoins and invariably more robust than the 1st generation of purely algorithmic stablecoins."''
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| == Team, Funding, Partnerships, etc. ==
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| === Team ===
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| * Full team can be found [here].
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| * Joey Santoro; CEO of Feil Labs and writer of the [[whitepaper]]
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| === Funding ===
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| * [https://www.coindesk.com/coinbase-naval-framework-ventures-19m-raise-fei-stablecoin From] [[CoinDesk]] (9-3-2021):
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| ''"Raised $19 million from [[Andreessen Horowitz]] ([[a16z]]), [[Framework Ventures]], [[Coinbase Ventures]] and [[AngelList]] founder [[Naval Ravikant]], among others. [[ParaFi Capital]] and [[Variant Fund]] also participated in the round."''
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| === Partners ===
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| * [https://ethhub.substack.com/p/ethhub-weekly-194?token=eyJ1c2VyX2lkIjoxMzk3OTAwLCJwb3N0X2lkIjo0NDcxMjYyOCwiXyI6IjNtM29qIiwiaWF0IjoxNjM4NTAzMjQyLCJleHAiOjE2Mzg1MDY4NDIsImlzcyI6InB1Yi0zOTEwIiwic3ViIjoicG9zdC1yZWFjdGlvbiJ9.fxj7KNJIXFlU3dedTS8cPc7AxdwdpVLaYBGU From] [[EthHub]] (30-11-2021):
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| ''"[[Ondo Finance]] and Fei Protocol have partnered with several cutting-edge DeFi protocols to help them increase their [[Decentralized Exchange (DEX)|decentralized exchange]] [[liquidity]]."''
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| * Might [https://twitter.com/jai_bhavnani/status/1460693384549388292?s=20 merge] with [[Rari Capital (RFT)|Rari]] (17-11-2021). Votes got [https://twitter.com/CoinDesk/status/1473403097519214596 passed], FeiRari is a fact (22-12-2021).
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| *[[Balancer (BAL)|Balancer]] DAO [https://yieldfarmer.substack.com/p/-farm-90-apr-in-premias-pools-and?token=eyJ1c2VyX2lkIjoxMzk3OTAwLCJwb3N0X2lkIjo0NDY1MDMwMiwiXyI6IjNtM29qIiwiaWF0IjoxNjM4NTAzMDM0LCJleHAiOjE2Mzg1MDY2MzQsImlzcyI6InB1Yi0zODQ1MSIsInN1YiI6InBvc3QtcmVhY3Rpb24ifQ.I3tlYHbbIXIw6 commits] to DAO Agreement with Fei DAO (11-2021).
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| *[https://ournetwork.substack.com/p/ournetwork-issue-102?token=eyJ1c2VyX2lkIjoxMzk3OTAwLCJwb3N0X2lkIjo0NTY0NjQwMSwiXyI6IjBjVnVWIiwiaWF0IjoxNjM5OTc0NTc2LCJleHAiOjE2Mzk5NzgxNzYsImlzcyI6InB1Yi0yMTM2MiIsInN1YiI6InBvc3QtcmVhY3Rpb24ifQ.ZViWyw6oc3zT2nyNxaClqwYJRRo Partnering] with [[Gelato]] has led to significant increases of concentrated liquidity and volume on [[Uniswap (UNI)|Uniswap]] V3 (12-2021).
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| == (: ==
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| Knowledge empowers us all and will help us get closer to the [[decentralised]] world we all want to live in!
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| Making these free wiki pages is fun but takes a lot of effort and time.
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| If you have enjoyed reading, tips are appreciated :) This will help us to [[keep]] expanding this archive of information.
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| [[ETH]] tip [[address]]: 0x83460bE5F218b1520B69D702cE60A1DE37dD8E31
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