More than half of the investors cut their flesh and left the market.Where does the algorithmic stablecoin protocol go?

One week after the mainnet was launched, the algorithmic stablecoin protocol Fei has completed several community proposal votes, but it is still unclear when Fei will return to the $1 anchor price. Yesterday, Fei Labs co-founder Sebastian Delgado released The announcement stated:

“The snapshot vote on the $1/$0.9 redemption proposal has been completed and the vote was won by ‘no change’. With that in mind, we would like to share with you what will happen next:

First of all, work on fixing the bug reported last week is continuing, we are making good progress in addressing existing issues, but will be revisiting incentives (note: burns and rewards) before restarting them, which requires several weeks. On the plus side, the fix for periodically restarting reweights is being audited, and we expect to submit votes much sooner than that.

Data: In the past 10 hours, a total of 15,498 ETHs have been transferred from the Nexo address, more than half of which have been transferred to Binance: Jinse Finance reported that according to Lookonchain statistics, in the past 10 hours, a total of 15,498 ETHs were transferred from Nexo's address "0x7344". 7959 of them have been transferred to the Binance exchange. Currently, Nexo's address "0x7344" still holds 84,274 ETH. [2022/11/25 12:33:58]

At the same time, we will continue to evaluate proposals to support stable FEI in the short term, and we are developing a proposal that balances community sentiment with technical constraints and systemic economic risks.

Finally, our message to all stakeholders in the Fei Protocol is that the above steps were taken with both safety and urgency in mind, and the next proposal will be voted on as soon as it is safe and reasonable. "

Judging from the recent official announcements by Fei Labs, the problems facing the Fei protocol may be difficult to solve in the short term, and this is not good news for Fei holders and TRIBE governance token holders.

More than half of Cardano wallets are staking ADA, with the highest degree of decentralization: almost 55% of all ADA wallets in the market are entrusted to a staking pool. The sharp rise in the number of newly created ADA wallets per day, along with the increase in the total number of ADA staked, makes Cardano by far the most decentralized blockchain network on the market. Earlier this month, Cardano overtook Polkadot as the largest PoS network currently on the market. With over 69% of the total circulating supply of ADA staked on the network, Cardano appears to be fulfilling its promise to be a cryptocurrency 100 times more decentralized than Bitcoin.

According to news on January 10, Cardano has surpassed Polkadot to become the largest PoS network in terms of total value pledged. (CryptoSlate) [2021/1/26 13:32:38]

A week after the founding stage, many participants chose to "survive with a broken arm" (sell Fei and TRIBE at a discounted price).

Bitget Contract Big Data Center: More than half of BTC contract users are losing money: According to the market report of Bitget Contract Big Data Center, as of 11:00 today, the trading volume of BTC/USDT contracts on Bitget Exchange in the past 24 hours reached 1.07 billion US dollars, of which: the proportion of profitable users 45%, 44% for long positions, 10% for short positions; 55% for loss-making users, 17% for long positions, and 29% for short positions. In addition, the current price difference of the Bitget forward contract is about 0.5USDT, and the contract basis is about 0.2USDT. [2020/9/8]

The figure below shows the weekly position changes of the participants in the initial stage of the Fei protocol, and 64% of the participants have cut their flesh in Fei.

(Note: Data and pictures are from Covalent)

Similarly, 52% of Founder Stage participants have liquidated their TRIBE.

Bitget Contract Big Data Center: BTC upside is weak More than half of contract loss users: According to the market report of Bitget Contract Big Data Center, as of 11:00 today, the trading volume of BTC/USDT contracts on Bitget Exchange in the past 24 hours has reached 1.25 billion US dollars, of which: profit Users accounted for 35%, long positions made a profit of 22%, short positions made a profit of 27%; loss-making users accounted for 65%, long positions lost 32%, and short positions lost 19%. In addition, the current price difference of the Bitget forward contract is about 0.5USDT, and the contract basis is about 0.2USDT. A Bitget contract analyst said that the BTC four-hour line shows that the trend is running below the Bollinger Bands, and the MACD fast and slow line is below the 0 axis, forming a dead fork. [2020/8/22]

This caused both the price of Fei and TRIBE to fall, and at the same time, the mortgage rate of Fei protocol reserve assets (ETH) continued to rise. Coupled with the recent rise in the price of ETH, the current rate of Fei protocol reserve assets has exceeded 156%. From another point of view, overcollateralization is a very favorable factor for the current remaining holders of Fei and TRIBE.

News | Hurun Research Institute Report: More than half of the respondents in China said they don’t know much about virtual currency: According to Fenghuang.com Business Report, on January 16, the Hurun Research Institute issued the "2019 Zhishangyoupin - China’s Multi-Millionaire Brand Tendency Report”, the report pointed out, “For investing in virtual currency, although virtual currency has attracted great enthusiasm from investors in the international market in recent years, it is still waiting to be seen in China, and more than half of the respondents said that they do not know much about virtual currency. Currency, among those who have invested in virtual currency, Bitcoin accounts for the majority, reaching 15%; 20% of the respondents expressed "interest" in virtual currency." [2019/1/17]

The question before Fei and TRIBE holders is, what kind of strategy should they adopt, should they choose to cut the meat, continue to hold, or what?

We will try to analyze and analyze, and first of all, we need to recognize the current situation of the Fei protocol:

A large number of Fomo funds have chosen to leave the market, and the agreement PCV funds have remained above 1 billion US dollars, and the agreement is still in an over-collateralized state;

There are currently only 3 announced members of the team, and it takes a long time to write proposals, community votes, code changes, and audits, which indicates that there will be a long waiting period (in weeks, or even more than 1 month) );

Mainstream encrypted assets such as ETH continue to rise, which has exacerbated the negative sentiment of Fei protocol holders, which also means that the selling pressure has not been cleared.

There are flaws in the stability scheme originally designed by the Fei protocol. In the event of a run, there will be a serious deviation from the anchor price. The so-called incentives (burn and reward mechanism) cannot effectively solve this problem, and the project party said that it will introduce Stable assets such as DAI and RAI are used as PCV reserve assets to better stabilize Fei assets.

At present, large-scale centralized exchanges are still very cautious about algorithmic stablecoin projects. If they cannot achieve a good anchor, these platforms will not go online rashly.

The liquidity of the Fei protocol fund pool (including Fei/ETH and Fei/TRIBE) is in a very leading position in Uniswap, which is a source of confidence for all participants.

It is very important that the Fei protocol has the support of star investment institutions such as A16z and Coinbase, which means that the Fei protocol is not some unknown local dog project, at least it will persist for a long time.

Based on the above situation, we can give an unverified judgment: the possibility of the Fei protocol breaking out in the short term is not very high, but once the stability of its Fei token is confirmed by the market, then its subsequent development There will be a very strong boost, and the larger the amount of funds in PCV, it also means that the value of TRIBE governance tokens will be higher (Note: The funds in the PCV pool are controlled by voting with TRIBE governance tokens).

Nevertheless, a very important factor we need to consider is the security of the protocol contract. Due to the flaws in the current Fei protocol scheme and the very negative community sentiment, if the project party rushes to launch a solution with loopholes at this time, there may be It would be a catastrophic event and the worst case scenario where the funds in the PCV would be stolen by hackers.

In view of the above analysis and the fact that the Fei protocol has not yet released the selling pressure, we need to discuss the strategies that different participants should adopt.

Situation 1: Participants who have invested too much capital and are not optimistic about the Fei protocol for a long time are advised to switch back to ETH early or clear most of their positions.

For such participants, the fact that the Fei protocol is in a downturn in the short term will cause them huge psychological pressure, which may eventually force them to choose to cut their meat at a low point. Even if not, the current risk of the Fei protocol is not suitable Investing too much money.

Situation 2: Participants who have invested too much funds but are optimistic about the Fei protocol for a long time are advised to exchange part of ETH appropriately and keep some positions.

The reason is the same as above.

Situation 3: Participants who have a low proportion of investment funds and are not optimistic about Fei's agreement in the long run can wait patiently for Fei to return to $1 and then choose to exit.

At present, the reserve mortgage rate of the Fei protocol is already very high, so it is only a matter of time before the Fei token returns to $1, and participants only need to wait patiently.

Situation 4: The proportion of investment funds is not high, and at the same time, participants who are optimistic about the Fei protocol for a long time can participate in liquidity mining, and slowly exit after the protocol matures.

If participants are optimistic that Fei's subsequent design can be stabilized at $1, and believe that the PCV fund pool can continue to expand, they can choose to participate in liquidity mining to earn Tribe tokens.

Situation 5: Participants who want to participate in the Fei agreement arbitrage in the short term can sell Fei at the market price, and wait for the stabilization mechanism to restart before making profits.

Situation 6: Participants who are optimistic about the development of the Fei protocol for a long time can wait patiently for the release of the market selling pressure, and invest a small amount of Fei and Tribe governance tokens at the right time, and then participate in liquidity mining.

Situation 7: If you are not optimistic about algorithmic stablecoins, stay away from this track. Currently, only the mortgage model is expected to achieve anchoring, and the design of the Fei protocol has not yet been successful.

The above are the bricks that the author currently throws out.

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