This article is from:The Way of DeFi (ID: DeFiDao), Author: Overnight Porridge, forwarded with authorization.
, Author: Overnight Porridge, forwarded with authorization.
At 3 am on April 4th, Beijing time, the decentralized stablecoin protocol FEI completed the three-day Genesis Group stage. It has brought more than $2.6 billion in liquidity to Uniswap. In terms of data, FEI's popularity has exceeded most people's imagination, and it has also become the largest algorithmic stablecoin project at present.
The reason why the FEI agreement has attracted so much capital and attention is undoubtedly closely related to its rule design and the investment institutions behind it.
According to the design, during the Genesis Group phase, participants who deposit ETH will be allocated nearly equivalent amounts of Fei, and the protocol’s governance token TRIBE will be allocated proportionally (accounting for 10% of the total amount). During the Genesis Group phase, participants also You can choose to exchange the Fei Pre-swap into the governance token TRIBE, and the higher the Pre-swap ratio of the participants as a whole, the higher the IDO price will be, which also leads to the so-called "white arbitrage" opportunity.
A few days ago, many people, including the author, conservatively predicted that the FEI protocol could attract 100,000-200,000 ETH during the Genesis Group stage. Fomo sentiment about the FEI agreement was completely detonated.
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(Data from: https://duneanalytics.com/tm1296/fei-eth-locked)
The white whoring whales accounted for 42 (60%), they pursued the principle of risk minimization, just to get the airdrop rewards in the Genesis Group stage.
The remaining 13 whale participants (accounting for 18.57%) more or less pre-swap a certain proportion of TRIBE governance tokens, among which the number one participant invested 10031.88 ETH and pre-swaped 5530 ETH.
Up to now, most of the "white whoring whales" have exchanged the obtained TRIBE governance tokens into Fei, and only a few of them have successfully exchanged them into ETH. Trapped in Fei's "cage", they are currently waiting for Fei to return to his position on the water, ready to escape.
On the other hand, the "Stud Whales" and "Mining Whales" (ready to participate in liquidity mining) on the other side, although they are currently in an "underwater position" (book loss), they do not seem to have any tendency to escape from the FEI agreement in the short term.
Obviously, the sharp drop of TRIBE governance tokens in the early hours of this morning was caused by the collective smashing of the market by "white whoring whales", which is also in line with previous expectations.
According to the 639,000 ETH participation funds and the overall ratio of Pre-swap at the moment of IDO, the cost of buying coins for participants Pre-swap is about 3.2 US dollars. Including the airdrop, the cost of each TRIBE governance token About $2.60.
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As of now, the price of the TRIBE governance token has risen to 2.59 FEI, but because the price of FEI is still underwater, participants with a large proportion of Pre-swap are still in a state of loss as a whole.
How did Fei get back to the water mark, and what happens after that?
After going through the early chaotic stampede period, participants have a preliminary intuitive understanding of the mechanism of the Fei algorithm stablecoin. The "direct incentive" mechanism set by the developer will inhibit participants from selling at a price below $0.99. At the same time, rewards are used to encourage arbitrageurs to buy Fei at a low price, so as to slowly pull Fei back to the water level. If this mechanism does not work, the Fei protocol will Reweights to use PCV funds to transfer Fei on Uniswap. Stablecoins push back to $1.
That said, if you don’t want to get burned innocently, you can choose to wait for Fei to go back to $0.99, or for Reweights to happen.
In this case, prostitutes and arbitrage parties will scramble to escape from this agreement, and the reduction in PCV value may lead to a reduction in the value of TRIBE governance tokens.
So how to avoid letting Fei Protocol fall into this negative cycle? The focus is on attracting new funds into the PCV pool.
At present, there seem to be three possibilities.
One is the listing of TRIBE governance tokens on large exchanges. From the perspective of investment institutions (Coinbase, etc.) and project scale, this is more likely.
The second is that the income from liquidity (Fei/TRIBE) mining can attract more funds to enter. Judging from the setting rules of linearly decreasing Staking rewards in 2 years, this is also possible.
The third is to add more functions to the Fei protocol. For example, the founders of Aave and Compound who participated in the financing of the Fei protocol may announce the integration news.
