Fei protocol is a project that has undergone tremendous changes. Although it has only been officially launched for only half a year, its core mechanism and token design have been vicissitudes of life.

In the planning of the white paper, Tribe's main role is to be used for governance proposals, mainly involving the following two categories:

● Annotate new tokens for casting Fei, and adjust the price function of the Bond Curve used for casting

● Mobilization and allocation of PCV funds

To put it simply, the role of Tribe is: 1. Determine what assets and what algorithm to use to mint the stablecoin Fei; 2. Have the right to use the assets controlled by the agreement and determine the whereabouts of this part of the funds. Since Fei Protocol, like Liquidity, is a believer in "light governance", as the core governance token of the agreement, Tribe has a relatively small governance scope in the agreement, and its greater role is reflected in the liquidity of the huge assets in the agreement. The right to call.

For example, the community passed a proposal to distribute the agreement’s PCV assets to multiple DeFi platforms, including depositing ETH in Compound, Aave, and staking in Lido, and also purchased a part of DPI index assets (Defi pulse and Set Protocol co-issued DeFi index assets).

In August of this year, Joey, the founder of Fei protocol, put forward the idea of ​​Fei V2. On October 7, Joey further explained the design details of V2. Its core points include:

● Strengthen anchoring: ensure that Fei can redeem corresponding assets at a ratio of 1:1 to achieve Fei's strong anchoring and stable consensus

● Improve the value-added and risk management flexibility of PCV assets: The Smart Pools function of Balancer V2 will further improve the capital gain efficiency of existing PCV assets, and automatically and dynamically adjust asset allocation ratios. Various parameters will be governed by Tribe

● Tribe’s value and responsibilities are further bound to the overall agreement: when the ratio of the value of PCV assets to the value of Fei that has been minted is higher than a certain target value, it means that PCV’s fund management and appreciation are good, and part of it will be extracted Repurchase and destroy Tribe, and put it into the DAO reserve pool and liquidity incentive pool. And if the value of PCV plummets, causing the value ratio of PCV to Fei in circulation to fall below the target value, Fei will be able to cast Tribe at a price of 1:1$ to sell to ensure its anchoring. In this case, Tribe has become a system's cash reserve in disguise.

Under this mechanism, the Fei protocol essentially becomes a liquidity agreement, and the PCV liquidity it controls can become a bargaining chip between it and other DeFi agreements that are hungry for liquidity for greater benefits.

However, the code of the V2 mechanism is still under audit, and more details of the mechanism still need to be observed and analyzed after the launch. It is expected that it will be officially launched in November.

Regulatory risk

Fei protocol currently faces less regulatory pressure, mainly because its business volume and stablecoin use case scenarios are still very narrow, and the possibility of entering the regulatory vision is low.

Fei protocol is a project that has undergone tremendous changes. Although it has only been officially launched for only half a year, its core mechanism and token design have been vicissitudes of life.

In the planning of the white paper, Tribe's main role is to be used for governance proposals, mainly involving the following two categories:

● Annotate new tokens for casting Fei, and adjust the price function of the Bond Curve used for casting

● Mobilization and allocation of PCV funds

To put it simply, the role of Tribe is: 1. Determine what assets and what algorithm to use to mint the stablecoin Fei; 2. Have the right to use the assets controlled by the agreement and determine the whereabouts of this part of the funds. Since Fei Protocol, like Liquidity, is a believer in "light governance", as the core governance token of the agreement, Tribe has a relatively small governance scope in the agreement, and its greater role is reflected in the liquidity of the huge assets in the agreement. The right to call.

For example, the community passed a proposal to distribute the agreement’s PCV assets to multiple DeFi platforms, including depositing ETH in Compound, Aave, and staking in Lido, and also purchased a part of DPI index assets (Defi pulse and Set Protocol co-issued DeFi index assets).

In August of this year, Joey, the founder of Fei protocol, put forward the idea of ​​Fei V2. On October 7, Joey further explained the design details of V2. Its core points include:

● Strengthen anchoring: ensure that Fei can redeem corresponding assets at a ratio of 1:1 to achieve Fei's strong anchoring and stable consensus

● Improve the value-added and risk management flexibility of PCV assets: The Smart Pools function of Balancer V2 will further improve the capital gain efficiency of existing PCV assets, and automatically and dynamically adjust asset allocation ratios. Various parameters will be governed by Tribe

● Tribe’s value and responsibilities are further bound to the overall agreement: when the ratio of the value of PCV assets to the value of Fei that has been minted is higher than a certain target value, it means that PCV’s fund management and appreciation are good, and part of it will be extracted Repurchase and destroy Tribe, and put it into the DAO reserve pool and liquidity incentive pool. And if the value of PCV plummets, causing the value ratio of PCV to Fei in circulation to fall below the target value, Fei will be able to cast Tribe at a price of 1:1$ to sell to ensure its anchoring. In this case, Tribe has become a system's cash reserve in disguise.

Under this mechanism, the Fei protocol essentially becomes a liquidity agreement, and the PCV liquidity it controls can become a bargaining chip between it and other DeFi agreements that are hungry for liquidity for greater benefits.

However, the code of the V2 mechanism is still under audit, and more details of the mechanism still need to be observed and analyzed after the launch. It is expected that it will be officially launched in November.

Regulatory risk

Fei protocol currently faces less regulatory pressure, mainly because its business volume and stablecoin use case scenarios are still very narrow, and the possibility of entering the regulatory vision is low.