ICHI has fallen

WHAT IS ICHI?

ICHI is a capital management platform that can be used by protocols or regular crypto investors. With ICHI, you provide your (eligible) tokens, and those get used to provide concentrated liquidity on Uniswap. The price range is managed by ICHI and they cover the fees too. By doing this, ICHI can maximize your returns from the income generated from the liquidity pool — every community can issue their own currency. Each token worth 1$.

You mint it with the community’s own native currency. ( whatever you want basically ). It’s redeemable 1-for-1 for USD coin ( USDC ). Fully on chain. No need to take on debt. Voting power over the treasury. (completely transparent ) Decentralized Monetary treasury. (DMT)

Decentralized Monetary treasury explained:

What problems are ICHI trying to solve?

• Creation of a community treasury.
• Avoid having to sell native currency to fund activities in stables. Selling native tokens decreases the value of the token.
• Keep value locked in community.

This ICHI branded dollar allows you to retain your own native currency but still get dollar value out of it. There’s a lot of benefits from doing this. Uniswap has done it, 1Inch has done it.

ICHI strives to be the comfiest community in crypto. The entire team is working hard to stabilize the price and prevent any liquidations. As we saw, you can loan money as ICHI, that’s the part where bitcoin plays into it : as it decreases in value, this made the system mess up.

ICHI Advantages and disadvantages:

• ICHI Token benefits include:

*It offers better payouts, incentives and rewards in DeFi as stable money.
* It offers the benefit of generating a branded dollar for the community.
* It provides LPs with one-sided deposits on Uniswap without the need to manage locations

• The disadvantages of ICHI Token are:

* The risk outlook is high for the short and medium term.
* Uncertainties continue in the long term.

You can find risks when :

• Minting ichi.farm stable coins :

1- Smart contract issues, bugs, or economic loopholes with the ichi.farm protocol.

2- Risks with digital assets used as collateral, typically stable coins:
* Maker DAO risks:
* USDC risks: https://support.usdc.circle.com/hc/en-us/articles/360001314526-Circle-USDCRisk-Factors
*USDT risks: https://tether.to/legal/

3- Market, trading, liquidity, and exchange risks associated with non-collateral, cryptocurrency assets.

4- Governance risks: Governance could make poor decisions on treasury management or important stable coin parameters, such as minimum reserve percentage.

• Liquidity Provision :

When providing liquidity to the ichi.farm exchange, you are exposed to many risks:

1- Smart contract issues.

2- Impermanent loss: https://cointelegraph.com/news/report-impermanent-loss-on-uniswap-andother-amms-is-always-permanent

3- Market, trading, liquidity, and exchange risks

• Farming:

When staking liquidity pool tokens to get ICHI, the ichi.farm governance token, you are exposed.

too many risks:
1- Smart contract issues
2- Market, trading, liquidity, and exchange risks

ICHI HAS FALLEN: ( 85% decrease )

On April 11, the price of DeFi protocol Ichi’s native token suddenly collapsed, losing most of its value.
The token, which was worth $143 prior to the crash, has now dropped to as low as $1.70 — down a staggering 99% — before a slight rebound.

Following the incident, some commentators claimed that insiders carried out a “rug pull” and possibly sold a large chunk of ICHI tokens they owned in their own liquidity pools leading to the collapse of the token’s price.

However, in reality what happened was a major error on the part of the team. A problematic protocol change created a sudden rise in ICHI’s price, which was immediately followed by a large crash. They put more sell pressure than buy pressure and then spent the treasury to put more sell pressure. Not directly of course, they seem to not have understood how lending protocols work.

The protocol messed up bad by setting stables to 55% (or 60% for oneuni) and volatile ichi to 85% Any borrow rate of 85% outside of stables is a bad idea.
People were able to borrow up to 85% of their collateral, it should have been lower.

Honestly if “reparations” can be done, or at least a plan forward to make whole everyone; I think proceeding forward with the ICHI business mission is ideal. If not, at least a plan similar to REPT-B that RARI ended up doing.

Tokens for those that were out, eventually to be paid back. Luckily for them RARI and TRIBE joined forces and TRIBE wiped out their hack debt, but still, it can be done.

That’s it for today, hope you enjoyed our first article Many to come.
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