How did the algorithmic stablecoin Float Protocol perform after its creation?

Float Protocol still needs to prove its market demand, but relative to the interest rate adjustment, the fidelity of the peg mechanism of Float daily auction may be higher.

The cryptocurrency market seemed to be in a state of chaos over the weekend. But in this environment, a brand-new stablecoin creation was issued - FLOAT, users who are pledged in a single BANK pool and participated in the creation of FLOAT can claim FLOAT tokens, and BANK tokens can be pledged in a pool, At the same time, there will be about 1 month to get BANK token rewards (additional pledges are not allowed after the tokens are issued). Starting from 6:00 on May 17th, the newly opened FLOAT-ETH pool of Float Protocol will reward 1200 BANK every week within 4 weeks, and a single FLOAT pool will reward 100 BANK every week.

The average drop of algorithmic stablecoins today is 2.30%: Jinse Finance and Economics quotes show that the average drop of algorithmic stablecoins is 2.30% today. Among the 8 currencies, 3 rose and 5 fell, among which the leading currencies were: BAC (+7.25%) and FRAX (+1.55%). The leading currencies are: MITH (-12.12%), RSR (-5.85%), LUNA (-5.52%). [2021/4/12 20:10:47]

At first, BANK/ETH was up about 10% because most of the BANK tokens staked for the Float genesis were already in the pool a long time ago.

Algorithmic stablecoins have an average increase of 3.21% today: According to Jinse Finance, the algorithmic stablecoins have an average increase of 3.21% today. Among the 8 currencies, 5 rose and 3 fell, among which the leading currencies were: ONS (+10.75%), AMPL (+10.01%), BAGS (+9.07%). The leading currencies are: LUNA (-3.70%), MITH (-1.16%), and FRAX (-0.20%). [2021/4/6 19:51:10]

The average drop of algorithmic stablecoins today is 6.79%: According to Jinse Finance, the average drop of algorithmic stablecoins is 6.79% today. Among the 6 currencies, 2 rose and 4 fell, among which the leading currency was: FRAX (+0.37%). The leading currencies are: ONS (-25.43%), LUNA (-5.68%), AMPL (-4.51%). [2021/1/8 15:39:35]

However, after the creation of Float, the price of BANK has been falling. Of course, the price of ETH has shrunk by 20% during this period. In addition, because the FLOAT protocol minted more BANK tokens for liquidity mining, some medium-sized holdings human selling.

Genesis participants have pre-converted stablecoins or ETH into FLOAT before the launch, and about 4 million FLOATs have been pre-converted. By now, the vast majority of pre-converted FLOAT has been minted and withdrawn.

Now let's look at FLOAT again. From a volume perspective, FLOAT seems to have stabilized overall, but the total volume is not very high. However, the high/low range is only about 35%, and most of the volume occurs during auction trading.

The main anchoring mechanism of FLOAT is the "daily auction". From the graph below we can see that buyers came in towards the end of the auction and eventually let the target price of FLOAT be achieved (around 0.000453 ETH) at the end of the auction.

There is still a lot to prove for the FLOAT protocol (especially on the demand side), but relative to interest rate adjustments (the mechanism adopted by RAI), the fidelity of FLOAT's auction mechanism may be higher. I still think that in the long run, the DeFi industry should focus on these types of floating anchor tokens.

Written by: Will Sheehan, Founder of Parsec Finance Translated by: Lu Jiangfei

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