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Stablecoins are a popular and versatile cryptocurrency in the world of decentralized finance. They help reduce the price volatility levels of cryptos in general, thus reducing risks and providing hedging opportunities within the industry. However, existing stablecoin models are still weighed down by several issues. Two major disadvantages of current stablecoin systems are that they’re often secured by other volatile cryptocurrencies, or governed by centralized third parties. Thus, current solutions are often not really decentralized, cannot be scaled, and are potentially inefficient due to over-collateralization.
The Fei protocol was developed to solve these existing problems.
With its investment in the Fei protocol, the software company Advanced Blockchain AG supports the development and usage of this improved stablecoin model, which combines price stability with complete decentralization.
The Fei protocol is a fully decentralized stablecoin project developed by Fei Labs Inc. The project aims to improve upon the concept of stablecoins by implementing various innovations. It uses a stability mechanism called Protocol Controlled Value (PCV), as well as numerous other mechanisms to keep the Uniswap liquidity pool and FEI, its native stablecoin, close to the exchange rate of the US dollar. It also introduces a native governance token called TRIBE.