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The Way of DeFi (ID: DeFiDao)

, Compile: screen, forwarded with authorization.Recently, the popular new algorithmic stablecoin protocol Fei announced its launch plan. Fei will issue its stablecoin FEI and governance token TRIBE for the first time using the method of Genesis Group. The investment background of the project is quite impressive. According to CoinDesk on March 9, the project entity Fei Labs has raised $19 million from Framework Ventures, Coinbase Ventures, and AngelList founder Naval Ravikant.For more detailed explanations of Fei Protocol’s projects,please see "DeFi New Gameplay丨Learn about the decentralized stablecoin protocol Fei in one article！》

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URL: https://app.fei.money

FEI and TRIBE will be released at the end of Genesis on March 25, 2021 at 12:01 AM

This post will discuss the Genesis Group, its role in Fei’s launch, and what decentralization means for the Fei protocol.

1 Fei Protocol Creation

The decentralized stablecoin protocol Fei Protocol will be launched at 12:01 PM on March 22, Pacific time (04:01 on March 23, Beijing time), and the Genesis launch will last for three days. Users participating in the genesis of the Fei Protocol protocol can put their ETH into the pool. The total amount of ETH will determine the amount of FEI generated during the genesis, which in turn will affect the amount of FEI received by users. Fei Protocol saves the received ETH as Protocol Controlled Value (PCV), and Fei Protocol deploys PCV to create a liquid secondary market where users can sell FEI for ETH. The ETH invested by users will be sent to Uniswap as liquidity to form an ETH-FEI pair to support the early stability of FEI.

All DeFi has inherent risk. Users need to think carefully before participating. The project code has undergone security and functional audits and is continuously fully tested. However, the economic mechanism for protocol implementation is brand new, and non-protocol genesis participants should understand the principles and vision of the project before participating.

2 Use ETH to participate in the creation of Fei

Users participating in the Genesis Group can put ETH into Fei Protocol to guide the launch of the protocol. By doing so, participants earn FEI at a rate derived from the bonding curve. The total amount of ETH at this stage will determine the amount of Genesis FEI, which will affect the amount of FEI obtained by users. Genesis' FEI circulation and the number of users gained will only be known at the end of Genesis. The process of casting FEI with ETH is irreversible. To exchange ETH back, users need to sell FEI on Uniswap or the secondary market, but may face the risk of destruction and volatility.

As previously discussed in the white paper, FEI's Bonding Curve defines the relationship between price and token supply. Specifically, the amount of FEI created by the Fei Protocol and supplied to Genesis Group will depend on how far Genesis Group has moved along the bonding curve in total. This distance is determined programmatically by the amount of ETH invested at the end of genesis and the price of the oracle (ETH/USD). FEI reward parameters have been modified based on the initial concept in the white paper to retain a higher percentage of PCV as a reserve. The FEI scale target on the bonding curve is 100,000,000, with a starting price of $0.5. Due to the 1% buffer, the maximum price Genesis Group members pay is $1.01/FEI.

Different from FEI, the amount of TRIBE obtained by Genesis Group is fixed, set at 10% of the initial total supply of TRIBE. Out of a total fixed supply of 1 billion TRIBE, 100 million TRIBE will be created and reserved for Genesis Group participants. This distribution is necessary to build the most loyal community (members supplying ETH to PCV), who are also initial voting members of Fei DAO, holders of TRIBE. TRIBE governance is critical at launch to enable effective decentralized management of PCV.

TRIBE Governance Token Allocation Plan: According to the allocation plan, the community, team, and investors account for 80%, 15%, and 5% of the token allocation respectively. Most of TRIBE will be controlled by DAO. The breakdown of the token distribution is as follows (roundings have been made):

DAO treasury (40%), IDO issuance (20%), Fei core team (13%), founding group (10%), equity reward (10%), investors (5%), funding plan (2%) ).

Fei Protocol will be decentralized from the day of launch, and Genesis Group will be the manager of protocol governance. Fei DAO uses the same code as Compound DAO, which is very mature in the DeFi ecosystem. In addition, Fei DAO has added some minor parameter adjustments to further support and strengthen the decentralization of the entire on-chain governance process. For example, the quorum threshold for Fei DAO is reduced to 2%, and the proposal threshold is reduced to 0.25%. This should allow more people to participate in governance, as holders with lower voting power can initiate proposals compared to other systems. For more information on the central governance of the Fei protocol area, please refer to Fei DAO (https://docs.fei.money/governance/fei-dao).

3 TRIBE's pre-transaction

To prevent frontrunning in the initial FEI-TRIBE liquidity pool, Fei Protocol has taken protective measures. Fei Protocol allows users to choose to exchange their genesis allocated FEI for TRIBE directly from the fund pool. Users can redeem their Genesis allocated shares in advance. The FEI obtained by participants during the genesis phase can be exchanged for TRIBE when the liquidity pool is launched.

This will be the first batch of transactions for the liquidity pool. Because it's the first batch, and the initiation of the protocol is atomic, bots can't do front-running trades without being part of the protocol. Fei protocol users can take advantage of this feature to adopt some strategies: One is to optimize TRIBE ownership and governance participation, and pre-exchange all purchased FEI into TRIBE. The other is to optimize liquidity mining at a 50/50 ratio. Please note that the FEI-TRIBE exchange rate may fluctuate.

Pre-transactions are one-way. Users can only increase the pre-transaction ratio. It should be noted that any Genesis distribution used for pre-transaction can still enjoy the TRIBE part of Genesis Group in proportion. Users will not sacrifice their initial TRIBE allocation for exchanging FEI.

A nice thing about pre-transactions is that it only costs 70k in gas, which is less than two-thirds of the average transaction fee on Uniswap!

Participants of Genesis Group can receive FEI and TRIBE rewards in the next block after going online. When claiming, the user will receive a mixed reward of FEI and TRIBE according to the amount of pre-transaction they choose. After the genesis phase, participants can redeem rewards at https://app.fei.money.

Summarize

FEI-TRIBE liquidity mining will start a few days after the genesis, and the rewards will be updated weekly according to a linearly decreasing release schedule. Due to the launch of FEI-TRIBE at the same time, the initial liquidity mining rewards will be aimed at promoting the widespread use and adoption of FEI and further supporting the decentralization of the Fei protocol. More details of liquidity mining will be announced later.

Summarize