Ichi Protocol (ICHI)

Ichi protocol allows users to create “branded” stablecoins such as oneUNI (based on the Uniswap UNI token) or oneBTC (based on WBTC).

Basics

• Based in:
• Started in / Announced on:
• Testnet release:
• Mainnet release:

Audits & Exploits

• Bug bounty program can be found [insert here].
• Scored a 59% on DeFi Safety (6-5-2021); "​An audit was published by Bramah Systems in October 2020.​ Ichi farms was released in November 2020." With the comment: "Very low software docs and testing scores hurt them. More work in these core areas needed."

Bugs/Exploits

• From Tally (16-4-2022):

"Excessive leverage on the protocol’s native ICHI token resulted in a wave of insolvent loans and negative impact on linked algorithmic stablecoins. Ichi protocol was top of mind over the past week due to serious disruption of their lending pool based on Rari Capital’s Fuse protocol. While the pool was not directly involved in Ichi protocol collateralization mechanisms, it kicked off a general market panic that triggered loss of peg for Ichi’s flagship oneUNI stablecoin.

With the fuse pool allowing over 5x leverage on ICHI token collateral, many loans quickly became insolvent as their collateral was no longer worth more than the borrowed amount. In hindsight, allowing such high leverage against the relatively illiquid ICHI token was a recipe for disaster. The Ichi fuse pool was oneUNI stablecoin’s largest supply sink (with borrowing fees as well as ICHI liquidity incentives), so the pool’s collapse led to a severe demand shock. With the stablecoin’s backing already falling due to decline in the price of UNI, there was insufficient USDC to meet all redemption requests and the stablecoin broke below peg.

While exact backing percentage and potential haircuts are still up in the air, oneUNI holders can likely only expect to see a fraction of their initial investment. Other Ichi stablecoins such as oneBTC have remained stable due to better treasury performance, but they remain broadly vulnerable to similar price and demand risks experienced by oneUNI. Initial signs of stress are already appearing in the oneBTC liquidity pool which is heavily unbalanced with minimal USDC exit liquidity remaining."

Technology

• Whitepaper or docs can be found [insert here].
• Code can be viewed [insert here].

Implementations

• Built on:

How it works

• From Tally (16-4-2022):

"Ichi protocol allows users to create “branded” stablecoins such as oneUNI (based on the Uniswap UNI token) or oneBTC (based on WBTC). Similar to FRAX, Ichi stablecoins use fractional algorithmic backing and arbitrage incentives to maintain peg; when above $1, users can mint stablecoins with a mix of USDC and the given stablecoins base asset (eg. UNI for oneUNI), while redemptions below peg are backstopped 100% with USDC. This ensures tight peg in normal conditions and allows for a stablecoin’s reserves to gain from upside in the base token. But if a rush of withdrawal requests and exits correspond with price falls in the base token, there may be insufficient reserves for all stablecoin holders to withdraw $1; this creates negative bank run dynamics where users rush to be first to withdraw their funds if they fear insufficient collateralization.

One of Ichi’s products is so called “angel vaults”, which are automated Uniswap v3 strategies creating buy walls just below the current market price of a given token. While this can help build price support in the short term, it was used excessively to boost ICHI’s token price in the lead up to the market crash and lending pool insolvency."

Roadmap

• Can be found [Insert link here].

Team, Funding, Partners

Team

• Full team can be found [here].

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