Introducing Fei v2
Fei Protocol announced Fei v2, an upgrade that dramatically improves the stability, efficiency, and scalability of FEI.
Fei v1 introduced the concept of Protocol Controlled Value (PCV) to the DeFi space. PCV has proven an important value driver by actively defending the FEI peg and deploying hundreds of millions of dollars into DAO-to-DAO partnerships with the likes of Aave, Compound, Rari Capital, Lido, and Index Coop. V2 will double down on these DAO-first use cases and carve out new ones such as Liquidity as a Service (LaaS), the subject of a future post.
Fei v2 places FEI at an advantageous point in the stablecoin design space by bringing substantial improvements including:
- Robust peg maintenance via 1:1 redeemability
- Efficient management of risk, liquidity, and yield via algorithmically controlled Balancer v2 PCV pools
- Aligned incentives between TRIBE and FEI holders via TRIBE buybacks and backstop
Fei v2 brings many improvements over v1 and places FEI at a strategic point in the stablecoin design tradeoff space:
- Scalability: Fei v2 brings the battle-tested and scalable 1:1 redeemability mechanism on-chain using transparent reserves.
- Stability: Algorithmic PCV weight adjustment through risk curves allows Fei to maintain a healthy risk profile and reserve ratio amidst market volatility.
- Decentralization: Having a fully decentralized PCV is core to the Fei mechanism and vision.
- Capital Efficiency: Balancer v2 asset managers bring increased efficiency by simultaneously allowing for liquidity provision and yield generation.
- Incentive Alignment: TRIBE holders are rewarded for effective PCV management through buybacks, and incentivized to manage risks to mitigate the likelihood of a backstop.
About Fei
FEI is a scalable and decentralized stablecoin that leverages protocol controlled value (PCV) for peg maintenance while maintaining highly liquid secondary markets.
📰 INFO
https://medium.com/fei-protocol/introducing-fei-v2-6f56afe7a1b5
