Fei USD

FEI

FEI is a decentralized, reserve-backed stablecoin created by the Fei protocol. Its value is soft pegged to the US Dollar and maintained by a backet of crypto assets owned by the protocol itself.

Risk Rating
Average
$0.99
0.54%
Summary
What we like
FEI is a decentralized, scalable stablecoin that innovated the concept of Protocol Controlled Value (PCV) to maintain its USD peg without debt or seigoirage.
What we like less
FEI has potentially concerning reflexivity as the TRIBE governance token is used to mint and redeem for FEI as a final backstop, which can lead to negative feedback loops in volatile market conditions when the PCV is deteriorating.
What it means for you
Offers you an alternative and more capital efficient way to access decentralized stablecoin with its peg stabilized by the protocol's own capital.
Information
Blockchain
  • Ethereum
Key Metrics
  • Market Cap: $15.4M
  • Fully Diluted Valluation: $15.6M
  • FDV / MC: 1
  • Ranking inside Exponential (among stables): #28
  • Circulating Supply: 15,475,091
  • Total Supply: 15,736,011
  • Total Supply: 15,733,759
  • Volume (24H): $2.2K
  • ATH: $5.55 (03/16/2024)
  • ATL: $0.16 (12/30/2023)
Risk Assessment
Average
Asset Strength

FEI is a low-cap, fully collateralized asset. This asset is exposed to the underlying risks of Tribe DAO, a protocol rated as Watch out.

FEI is a stablecoin that trades within 50bps of its peg to USD, which makes it a less volatile store of value.

Asset Tokenomics

FEI has an uncapped supply but has inflation control or burn mechanisms in place. FEI is exposed to death spiral risk as its price depends on another asset, thus creating negative feedback loops. FEI is always redeemable for $1 worth of other assets like ETH or DAI. FEI uses the Peg Stability Module (PSM) as a valuable tool to maintain its peg. The PSM is a decentralized exchange that allows users to swap FEI for DAI at a 1:1 rate. This liquidity provides another important peg stability factor by enabling the ability to swap 1 FEI for 1 USD at any time.

Asset Volatility

FEI is a stablecoin that trades within 50bps of its peg to USD, which makes it a less volatile store of value. FEI uses the Peg Stability Module (PSM) as a valuable tool to maintain its peg. The PSM is a decentralized exchange that allows users to swap FEI for DAI at a 1:1 rate. This liquidity provides another important peg stability factor by enabling the ability to swap 1 FEI for 1 USD at any time.

Dependencies

Tribe DAO

Things to know about FEI

How is FEI created?

FEI is a decentralized stablecoin that uses various innovations to improve upon the existing stablecoin systems. The purpose of the Fei protocol is to market make with its own liquidity such that the ETH-FEI pool trades closely to the ETH-USD pool. The protocol's minter and burner contracts control the token supply through bonding curves and trade incentives. With Fei, users effectively sell their assets (i.e. ETH or DAI) in exchange for FEI and can also return the FEI back to the protocol to receive their initial assets back.

What is FEI used for?

FEI is a price-stable asset that is mostly used as a hedge against volatility as it maintains a stable value of around 1 USD. Users need an alternative store of value and medium of exchange to navigate the highly volatile crypto markets. FEI addresses this problem for crypto native users, as well as enables a wide range of financial activities including hedging during periods of high market volatility, market making against a stable asset, use as collateral for leveraging, and payment as a medium of exchange.

How is the price of FEI kept stable?

Fei protocol owns the deposited assets and enables users to redeem FEI back 1:1 for PCV reserves. The protocol set a collateralization or target ratio of 100%, which means the PCV should always cover the amount of user-controlled FEI. Arbitragers also act in their own self-interest to help maintain the peg. When FEI price is above 1 USD, users can mint FEI on the protocol and sell it on the open market to earn a profit. And when FEI price is below 1 USD, users can buy the discounted FRI on the open market and redeem for 1 USD of value from the PCV.