A new stablecoin from Fei Protocol announced in mid-January 2021 aims to tackle the hindrance of peg volatility. To do this, it will introduce bonding curves and direct incentives to maintain the correct peg.
According to the Fei team, the genesis event will occur on March 22 and will run for three days.
Those wishing to participate in the event will need to pledge ETH to bootstrap the Protocol Controlled Value (PCV). This is what powers the economy of the new decentralized stablecoin. PCV is similar to the concept of Total Value Locked, in which the platform owns the assets locked in the smart contracts.
“Committed ETH will support the early stability of FEI by being sent to the incentivized ETH/FEI Uniswap pair as liquidity.”
Fei Protocol Genesis Group to Kickstart New Economy
Early participants in this large-scale financial experiment are known as the Genesis Group. These users are entitled to a pro-rata percentage of FEI generated from the bonding curve. This is the mathematical curve that defines the relationship between price and token supply.
The amount of ETH deposited during the genesis event will determine the amount of FEI produced. The distance along the bonding curve is determined by the amount of ETH committed and the USD price of ETH at the end of Genesis.
The bonding curve has a 100 million FEI target and starts at $0.50. The maximum price that Genesis Group members could pay is $1.01 per FEI, it added.
Joining the Tribe
The team is creating the TRIBE governance token with a total fixed supply of one billion. 100 million TRIBE tokens are reserved for Genesis Group participants.
“This distribution is necessary to establish the most dedicated community members (those that supply ETH to the PCV) as the Fei DAO’s initial voting members as TRIBE holders.”
The team is taking measures to prevent bot activity and front-running in the initial FEI/TRIBE liquidity pool. Following genesis, yield farming incentives will kickstart the new economy and promote usage of the FEI stablecoin.
The impetus for another stablecoin has emerged from the failings of the current top three according to the team behind Fei. Tether and USDC are centralized and could face regulatory risks. Meanwhile, Dai has scalability issues, a previous blog post stated.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.