An enormous launch of the newest decentralized stablecoin on Ethereum - Fei Protocol
A game full of uncertainty that nobody knows how to win or really play
Fei Protocol pre-genesis event is live, and the protocol has already received > 53,000 ETH (over $102,000,000) in commits. Fei is an algorithmic stablecoin that is backed by ETH, and has attracted major crypto investors which allowed them to raise $19m ahead of their much anticipated launch event.
The huge pre-allocated ETH is for many reasons: hype, an airdrop, and perhaps one of the most unique experiments to happen in DeFi yet. This launch includes game theory philosophers, short term profit seekers, long-term investors, and those who are DeFi curious.
I decided to dip my toe in today, and I wanted to give my readers a peek into the protocol and my strategy. The pre-genesis event still has 2.5 days left for DeFi participants to jump in, so hopefully this helps inform your decision!
Comprehensive Medium Article on Fei Protocol
Fei will be a stablecoin with the goal of pegging its value to $1. The protocol will use a large Uniswap liquidity pool of ETH and FEI liquidity to help stabilize the value of FEI to $1 should it fall below the peg. The protocol will be governed by TRIBE token holders. TRIBE can be acquired in 4 ways:
1) Pre-genesis allocation - Investors can decide whether to allocate a portion of their FEI, pre-genesis, to the governance token, TRIBE. There is some risk as nobody knows which direction TRIBE will go after launch (up, down, sideways). This is part of the fun.
2) Airdrop for genesis participants - 10% of the entire TRIBE supply will be airdropped to everyone who participates in the launch of Fei
3) Yield farming - A 50/50 FEI/TRIBE Uniswap liquidity pool will be created after genesis and allow liquidity providers to earn TRIBE.
4) Bought with FEI after genesis - If you miss the launch, or you’re hesitant to put a lot of your allocation towards TRIBE, you can be patient and buy from the pool in 3) above
Obviously, with the significant investor names behind Fei Protocol, this is bullish for TRIBE long term. However, I expect we’ll see quite a bit of sell pressure on TRIBE from the airdrop and yield farmers trying to build their FEI stacks after genesis. These factors led me to allocate the majority of my ETH pre-genesis to FEI (75%). I plan on yield farming with the FEI/TRIBE, and then adding to my TRIBE position once the initial dumping ceases.
I also anticipate participating in the Fei protocol genesis will have unforeseen benefits down the road (e.g. new project airdrops). Just another day in DeFi and Ethereum, taking part in another once in a lifetime event!