FEI, yet another attempt at an algorithmic stablecoin, is struggling. What makes the FEI failure so spectacular is the backing by some of the top VCs in the world, and an astounding $2 Billion in liquidity. Despite this, FEI-TRIBE has lost money for all investors, except a few savvy ones using bots and scripts to exit the initial liquidity event.
From an investor point of view, the big problem with FEI was the pricing. Investors threw a ton of money during the initial phase, buying FEI for $1.01. If they try to exit now, they'll get less than 50 cents on the dollar even though the price above shows 79 cents. Why? Because of the huge exit penalties of selling at under $1.
This is a terrible design - locking in investors instead of letting them exit your system. You cannot achieve price parity by liquidity penalties. That just makes the point of a stablecoin moot. Investors aped in with too much capital and are now paying the price for it.
Let this be a lesson -
- Do your research!
- Don't invest in a project just because big name VCs invested
- The more money a project raises, the less its potential return
Compare this to the super fair launch done by BANK-FLOAT team. You'll see why the DeFi world is excited about FLOAT and wants to hold BANK but not FEI. Over time, FLOAT is much more likely to succeed and BANK has far better risk/return characteristics than TRIBE.
btcgeek
