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19 April 2021

Fei Protocol genesis locks up $1 billion in ETH, but LPs could face losses

Fei Protocol genesis locks up $1 billion in ETH, but LPs could face losses


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The launch of Ethereum-backed stablecoin called Fei has locked up almost a billion dollars’ worth of ETH during its genesis event.

The protocol, which launched a genesis event on April 1, introduced a stablecoin that is partially backed by Ethereum and uses bonding curves coupled with direct incentives to maintain the correct peg.

The protocol uses a concept called ‘Protocol Controlled Value’ (PCV), meaning that when users deposit collateral, the capital is owned and managed by the protocol so that liquidity cannot just be pulled out.

To kick start the genesis event, the protocol allowed users to mint FEI from the ETH bonding curve at a discount starting at $0.50.

Watkins also observed that the launch also pushedUniswap (where the FEI/ETH pair was traded) liquidity as high as $8 billion

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