Stalecoin Fei has achieved price stability after initial failure
Stablecoin Fei (FEI) has achieved price stability after several failed attempts since the project began. It is currently trading at $ 0.96 after previously falling to $ 0.70.
Suggest Fei to fix the pricing problem
Fei is an algorithmically stable coin. In contrast to centrally managed stablecoins like Tether, it achieves price stability by automatically adjusting its offer based on price and amount of collateral.
Initially, users pledged over $ 1 billion to ETH and minted FEI through Uniswap’s FEI-ETH pool. The team hopes to be able to link the coin to the price of the US dollar through direct incentive and valuation measures.
However, Fei was unable to achieve price stability after it launched on April 3. As a measure to mitigate the difficult start of the project, it has now taken action. offer acquired FIP-2 and enabled the exchange of stablecoins for $ 0.95 in ETH.
Various problems led to Fei’s price drop
According to the project team, many users want to quickly join the governance token airdrop and exit immediately. This created selling pressure and influenced the price.
Shortly thereafter, a critical vulnerability was found in the live incentive system that forced the team to remove this functionality. After that, the price stabilization mechanism of the protocol (Peg Reweights) did not work and also had to be suspended.
These problems have caused prices to continue to fall. Thanks to the new proposal, however, the community voted to set a minimum price for the exchange of FEI and ETH in the minutes.
“To get the system close to the $ 1 block, the team suggested setting a fake minimum price of 95 cents. This will allow us to relieve the pressure to sell as we move to re-establish the direct quote system, ”said Brianna Montgomery, sales director at Fei Protocol.
“The goal is to get the FEI closer to $ 1 while the fixes for the direct incentive mechanism are being explored.”
Fei price table | Source: Tradingview
Further improvements to Fei
It is currently trading at nearly $ 0.96 after the recent FEI withdrawals have taken place. In contrast, FEI was only about $ 0.70 on April 20th.
The Fei Protocol has also allocated 300,000 ETH from its treasury to users, which can be redeemed on the project website. The governance community also voted to double FEI’s staking rewards to further promote the adoption of stablecoin.
The team is also testing all of the code in order to be able to restore the previously paused price stabilization mechanisms.
According to CryptoBriefing