The core idea behind FEI is to have a long-term stable asset in a volatile environment, like DeFi. FEI is a stable coin pegged to $1, meaning it will follow the price of the Dollar.
Having such an asset enables investors to safely deposit and use their capital in the DeFi world, so the demand for a truly decentralized and stable coin is growing with the volume of trade on DeFi platforms.
While there are other stable coin competitors out there, FEI has some key advantages over these competitors. We would like to highlight these advantages here:
FEI shines through being a purely decentralized stable coin, meaning it is currently only backed by other decentralized assets and an algorithm, allowing it to maintain its peg. In comparison to two major competitors, USDT and USDC, which are fully fiat-collateralized. These stable coins, being backed by centralized assets, are a regulatory risk, as they currently operate in a legal gray area.
Furthermore, the coin is able to scale to the demand of the market, giving it a leg up over DAI for example. DAI, compared to FEI, suffers from scalability issues, due to its inherent capital inefficiency.
FEI is DAO (decentralized autonomous organization) controlled, putting the governance power of the project into the community's hands. This aims to solve the issue of management and organization of modern corporations. Instead of having all the power concentrated in a board of directors or a CEO, the community as a whole decides what is best for the project. This way all ideas of the community can potentially be considered and realized, instead of a minority deciding the way the project is heading.
Lastly, Fei is DAO minimalized. This means that the community does not have to worry about maintaining the peg via constant proposals to ensure the peg. Those functions can be fulfilled by the FEI balancing mechanisms, like ‘Reweights’.
Instead, our community proposals and efforts can be focused on growing FEI by integrating it deeply into DeFi.
The PCV (Protocol Controlled Value) is part of the core benefits of Fei Protocol.
PCV is defined as assets, which are not redeemable by users and held by the protocol itself. Normally this would be realized as collateral, but in the case of Fei protocol all these assets are held in the form of liquidity.
In combination with the DAO system, this allows the community to utilize the PCV to accomplish different objectives. Currently, the main objective of the PCV is to help FEI stay pegged and provide liquidity for FEI. Due to the current size of the PCV, other options have opened up recently: