What is Fe?
Fei is a DeFi-native, scalable, decentralized stablecoin protocol. The team behind Fei Protocol is fully involved in DeFi. They write on their platform that they are impressed by the elegance of DeFi as it allows them to offer the best possible financial solution in each category. According to the Fei’ers, end users are fed up with all the frustration over the many options and only want one thing: a decentralized stablecoin.
The philosophy of the Fei Protocol is clear: they do not want a “bloated, over-collateralized, debt-fueled” stablecoin that is not scalable. They are also not interested in fueling volatility like an algorithmic stablecoin. What do they aspire to?
To truly build DeFi’s vision of global interoperable financial access, there must be a decentralized, fair, liquid, and scalable stablecoin that exhibits high-fidelity pegging.
Enter the Fei Protocol.
Would you like a visual introduction to this platform? Take a look at last year’s Epicenter Podcast recording, where they talk about everything. From ‘rocky start’ to ‘back to normal’.
What is a stable coin?
Before we delve into the Fei matter, it helps to know what a stablecoin actually is. I could put a great story here myself, but why reinvent the wheel? My colleague Txomin already wrote an article about it in 2019, which you can read here. But to keep you in the flow of reading, I’ll give a brief explanation here.
Stable coins are cryptocurrencies that have a constant value. This means that the payment you received with stable coins will still have the same value in a few days, weeks or months.
Don’t want to read a whole story or feel happier with a proper video? Then Whiteboard Crypto has a great story ready for you:
How did Fei come about?
DeFi and Stablecoins have an ultimate alliance. Users want access to dApps, like Aave and Compound, without too much volatility lurking. Collateralized stablecoins (USDC + USDT) are centrally controlled, making them a decentralization and regulatory risk. Crypto-collateralized stablecoins such as DAI face scalability issues.
This means that there is a need for a multi-level troubleshooter. Fei Protocol was born, with the intention of addressing problems and bringing innovation to market. The Fei Protocol is named after the ancient stone currency (Rai or Fei), from the Micronesian island of Yap. The Fei team is convinced that this stablecoin has the same stability and simplicity as its stone counterpart. They also use a very special word in their proposition, namely ‘ubiquity’. I’ll use the English definition, because it’s very revealing: “the state of being everywhere all the time.” Cute, right?
The Fei Mission Protocol
The team has an account on Medium, where they regularly post updates. Missi has been described in one of her articles, which I would like to pass on to you.
Fei Protocol’s mission is to create a fully decentralized stablecoin. Therefore, it is critical that tokens issued by trusted third parties (eg USDC, USDT, wBTC) are not used as collateral in the peg curve. This is a position that the development team hopes will be shared by the governance community after launch.
Do you have any questions about FEI USD or other terms that came up in this story? You will find the answers quickly and easily in our frequently asked questions. What also works is googling your question + ‘All About Crypto’. It is very likely that we have already written an article in the past on the topic you would like to know more about.
Would you like to talk more about the developments around FEI USD and the different applications or expectations? Then quickly join our AllesOverCrypto Facebook group! Our crypto and blockchain experts are here to answer your questions. I’ll see you there?
Photo by twitter channel of the FEI protocol