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19 April 2021

Fei Protocol struggles with a bug as holders are mostly unable to sell the token

Fei Protocol struggles with a bug as holders are mostly unable to sell the token


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Due to the particular mechanics of the protocol, the FEI token became impossible to sell as its main liquidity pool quotes a negative price for the token.

The Fei protocol is a recently-launched project that has immediately attracted billions in liquidity and total value locked by selling its FEI token, an algorithmic stablecoin using the concept of Protocol-Controlled Value to maintain a peg with the U.S.

Crucial to the protocol’s functioning is the ETH-FEI Uniswap pool, which is largely controlled by the protocol.

The protocol sends most of the Ether it receives from FEI buyers to the ETH-FEI incentivized pool, ideally supplying plenty of liquidity to facilitate trading.

The extremely aggressive burn penalty means that the main liquidity pool for the project, which holds over $1 billion in protocol-controlled Ether, is unusable for selling FEI.

The token currently has two main parallel markets: a FEI-DAI Uniswap pool and the MXC centralized exchange.

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