Fei (FEI), one of the largest decentralized stablecoins, may cease operations. The founder of Fei Labs released his compensation offer.
Ethereum (ETH) veteran Joey Santoro, founder of Fei Labs, has published a proposal to use FEI tokens to DAI and distribute protocol-controlled value (PCV) among TRIBE holders.
Fei Labs Leaves DAO
Mr. Santoro announced on Twitter that the Fei (FEI) architecture will be shut down due to “technical, financial and possible future risks”.
The past months have been difficult for the Tribe DAO. These challenges and outcomes were not what anyone hoped for.
After deep consideration, Fei Labs is proposing the following after considering all stakeholders. We believe this is the responsible path forward. pic.twitter.com/TbzWeCdhEr
— Joey Santoro 💚🦇🔊 (@joeysantoro_eth) August 19, 2022
It has issued a proposal to Dai (DAI), the largest algorithmic stablecoin, to use the existing circulating FEI supply. If this proposal is accepted, the remaining PCV reserves will be distributed among the holders of the TRIBE token, which formerly acted as a balancing act between the FEI and the USD to keep it steady at 1:1.
Alongside this are the sweeping consequences of a devastating attack on insurance-based liquidity pools associated with partners from Fei Labs and RARI Capital, another reason behind the upcoming but discontinued operations.
Speaking of DefiIgnas on Twitter, decentralized finance (DeFi) researcher Ignas explains why Fei’s (FEI) protocol-controlled value (PCV) vulnerability was the real reason the FEI team closed the project:
On a final note, one more reason for Fei’s closure is that the PCV model was not fit for the product market. The protocol has struggled to generate revenue, while yields have fallen and risks have risen in DeFi.
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