The genesis event for the Fei Protocol ETH-backed stablecoin began on April 1. It introduced an airdrop of its TRIBE governance token and the event concluded on April 4.
Liquidity in ETH has surged as members of a select ‘Genesis Group’ loaded up on FEI at discount below-peg prices in anticipation of it reaching the $1 target.
The protocol stated that 639,000 ETH was committed and $1.3 billion FEI have been minted. Through the platform’s Protocol Controlled Value, the FEI/ETH pair is now the largest pool on Uniswap.
Uniswap itself is reporting total liquidity of $2.56 billion for the pair at the time of press, representing both tokens in the pool.
What you can do post Fei Genesis:
Redeem $FEI and $TRIBE on the Fei interface
Read more
— Fei Labs (@feiprotocol) April 2, 2021
Redeem 
Trade 
FEI-TRIBE LP staking rewards begin on Monday, April 5 @ 12:01pm PT 
Unintended Consequences
The protocol designed the stablecoin with a bonding curve and ‘direct incentives,’ which should keep it as close to its peg as possible. There are penalties for withdrawing liquidity during periods of high selling pressure or when the token is trading below its peg.
Many investors and traders that rushed into the launch and airdrop now want their ETH back. FEI is trading below its peg at $0.945 according to CoinGecko. There is also an additional burning fee for those wanting to cash out. This is part of the stability mechanism design to incentivize users to hold on to the tokens.
There are two options for those that provided ETH. Either hold on to the stablecoin and wait until it returns to its peg, or sell out now and take the hit.
The protocol warned about this in a post-genesis announcement:
“Expect some volatility in both FEI and TRIBE during the price discovery process. If FEI is trading below the peg, there is a burn applied to any selling on the FEI-ETH Uniswap pool.”
The FEI Staking Option
Fei Protocol is also launching staking on April 5. This should further incentivize holding the stablecoin and earning its governance token, TRIBE.
There will be a FEI/TRIBE liquidity pool on Uniswap. It will yield liquidity provider tokens and further TRIBE rewards that will be distributed over the next two years.
“Participating in the staking pool is a great way to improve liquidity as well as earn additional TRIBE rewards and the associated governance share.”
At the time of writing, TRIBE was trading down 14% from its $2 peak on April 4 according to CoinGecko.
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