ICHI Token Market Analysis | The Freedom of Competition in Currencies via Community-controlled Liquidity and Stablecoin Protocol

ICHI is a DAO governed by the community of ICHI token stakers and liquidity providers. ICHI provides the infrastructure needed for crypto projects to leverage community-controlled and truly decentralized DeFi. ICHI’s DeFi native protocols enable crypto projects to build wealth and grow through community-governed liquidity and stablecoin programs.

ICHI Token (ICHI) Logo
ICHI Token (ICHI) Logo

ICHI focuses on solving three key problems in DeFi:

  • While current DeFi relies on a centralized business model that extracts value from crypto projects, ICHI gives the community control.
  • Crypto projects need stable assets for commercial transactions and are forced to sell their tokens in exchange for stablecoins. ICHI creates a Branded Dollars model, so now it is not necessary to sell tokens in exchange for stablecoins.
  • Traditional liquidity schemes force crypto projects to sell their tokens in exchange for the necessary liquidity. Through Angel Vaults and HODL Vaults, ICHI enables cooperative community project parties to provide liquidity without selling tokens.

ICHI’s products allow a project to develop their own stable asset (backed by their community’s token), and their own liquidity programs that turns Total Value Locked into Protocol Owned Liquidity. These products include:

  1. Angel Vaults
  2. HODL Vaults
  3. Branded Dollars

Through ICHI’s Decentralized Monetary Authority (DMA), it allows any crypto community to issue their own stablecoins and let these stablecoins compete freely in the DeFi market, similar to Hayek’s “free price mechanism” and “denationalization of money” ideas. Known as ICHI Branded Dollars, these stable tokens are worth $1. 

Branded Dollars:

  • Are minted using a ratio of the project’s scarce token and stable currency like $USDC.
  • Allow crypto communities to fully govern and benefit from their own currency.
  • Enable communities to govern and earn with a treasury of assets through opportunities in DeFi.

At present, ICHI has helped projects such as ShapeShift, 1inch, and Fuse to launch their own or capital efficient Branded Dollars.

ICHI Vaults

ICHI Vaults are Uniswap V3 Liquidity management protocols created to allow Liquidity Providers (LPs) to enjoy the user-friendly experience of Uniswap v2 while also benefiting from the high fee earning capability of concentrated liquidity on Uniswap v3. ICHI Vaults are unique in that they let LPs deposit a single token into a liquidity position on Uniswap V3 to earn and return an ERC-20 liquidity token that can be used in incentive programs. 

ICHI provides DeFi users and projects with two types of Vaults:

  • Angel Vaults – Align incentives of DeFi projects and their LPs by concentrating the liquidity of a deposited asset underneath the price of a community’s scarce crypto asset.
  • HODL Vaults – Allows investors to earn by managing their single sided deposit on Uniswap v3.

The functions of Angel Vaults include:

  • Buy liquidity

While providing single-asset liquidity below the price of a participating token, the price of that token will increase.

Angel Vaults uses Uniswap V3 to create centralized buy-side liquidity pools. These buy-side liquidity strategies ensure that there is always liquidity in the deposited tokens below the price of other assets in the Uniswap v3 pool. As asset prices change, the strategy rebalances asset pools to exert buyer pressure on other assets.

Example: oneICHI Angel Vaults creates a position with oneFUSE<>ICHI pair in the Uniswap v3 pool. Angel Vault only receives oneFUSE from LPs (and returns an ERC-20 LP token) and uses it to provide buy limit orders on ICHI within the pool (holding oneFUSE liquidity within the current price range). As the price of ICHI fluctuates, Angel Vault will rebalance, so to ensure it remains focus on the token buyer-side.

  • Deflationary liquidity rewards

By creating a community stablecoin through ICHI, and later using that community stablecoin to build an angel vault, crypto projects can offset the cost of liquidity rewards.

Branded Dollars is a complementary feature to any project’s Angel Vault. When used together, Branded Dollars and Angel Vaults enable projects to lock up their scarce crypto tokens in the Branded Dollar vault. This removes supply from the open market and provides upward price pressure on scarce crypto assets, offsetting the incentives in LP that is provided by the protocol.

  • Protocol Owned Liquidity (POL)

To create a sustainable and long-lasting liquidity, deposit a portion of the community stablecoins assets that is backing the project into Angel Vault.

The key feature of the synergy of Branded Dollars and Angel Vaults is that it is used to convert Total Value Locked (TVL) into Assets Under Management (AUM). When community stablecoins are minted, the scarce cryptocurrency is locked in a vault managed by the protocol and its users. Incentivizing LPs to stake their Vault LP tokens essentially incentivizes these users to mint or buy community stablecoins, thereby converting the scarce cryptocurrency used for minting into self-manageable assets.

The purpose of Angel Vaults is to protect token projects from market volatility. Since most assets are currently traded on AMM, and ETH is the primary asset, an arbitrage opportunity will arise when the broader market falls and the value of ETH falls, and when there is no positive buyer pressure on the paired asset. It prompts arbitrageurs to sell the asset and pair with ETH to make a profit, which causes the price of other crypto assets is affected by ETH and BTC.

Angel Vaults’ solution is a Uniswap v3 liquidity position manager that provides buy-side liquidity for tokens. They are known as AMM since they are dynamically managed, optimizing the capital deposited in the vault to achieve its goal, earning fees and helping LPs to efficiently manage uni v3 positions.

Tokenomics of ICHI

The four year supply of ICHI will include 10 million ICHI tokens to be allocated as follows:

  • 70% to community (7M $ICHI)
  • 15% to purchasers (1.5M $ICHI)
  • 15% to team (1.5M $ICHI)

A perpetual inflation rate of 2% per year will start in year 5 to ensure ongoing, active participation in the ICHI community.

Figure 1: $ICHI Year 4 and Year 10 Token Allocations

With 40% (~4M) of $ICHI already in circulation, the Community Treasury will retain 30% (~3M) to distribute on an ongoing basis through contributor/advisor grants, community incentives, liquidity mining, and other programs. 1.5M of this ICHI is available for distribution in year 1 following the formation of the Foundation.

The remaining 1.5M community $ICHI will unlock on a continuous basis starting in year 2 according to the following schedule:

Table 1–4 Year Distribution Schedule

Investment

In March of this year, ICHI raised $3.5 million in a funding round, with participation from Fundamental Labs, TRGC Limited, Lattice Capital, Lightshift Capital, and others. For the comprehensive guide on how to buy ICHI and other available tokens, please visit special MEXC How to Buy Guides Section.

Risk Analysis

The use value of ICHI mainly includes:

  • Participating in the governance of ICHI DAO;
  • As collateral when issuing the ICHI Branded Dollars

The risks of ICHI are:

  1. Although Angel Vault manages the token liquidity of its stablecoin issuer and eliminates market volatility, if the trading thickness of the bottom range of uni v3 is not strong enough, Angel Vault can withdraw as the current token holder liquidity;
  2. ICHI supports cross-chain asset transfer and trading, and there may be certain asset security issues when carrying out assets cross-chain through a cross-chain bridge.

Note: This article is only for market information sharing and does not constitute any investment advice.

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The content of this webpage is not investment advice and does not constitute an offer or solicitation to offer or recommendation of any investment product. It is for general purposes only and does not take into account your individual needs, investment objectives, and specific financial circumstances. Investment involves risk.

Please note that the information and data above are cited from third-party sources & whitepapers and do not represent MEXC. Please refer to direct sources for more details. This is not financial advice and does not constitute an offer or solicitation to offer or recommend any investment product. It is for general purposes only and does not take into account your individual needs, investment objectives, and specific financial circumstances. Investment involves risk.

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