Launch a $oneFOX-$FOX Angel Vault

Summary - After discussions with the $FOX community during previous governance calls and tokenomics meetings, ICHI has been encouraged to submit a proposal to launch an ICHI $oneFOX-$FOX Angel Vault. This would allow the FOX DAO to build a treasury of DAO owned buy-side liquidity and protect the $FOX price during a market crash.

Abstract - Liquidity is the money made available for trading. Most approaches to market making and liquidity involve putting up $FOX tokens and a base asset (usually ETH) for sale. This works great when $ETH is going up in value versus the dollar but leaves the $FOX price exposed to drops in the value of $ETH versus the dollar. Only single-sided $oneFOX is added to the proposed $oneFOX-$FOX Angel Vault. This protects $FOX price against market corrections.

Motivation - $FOX price would be better protected against bear markets without hurting the upside during a bull market.

Specification - Angel Liquidity Vaults are a Uniswap v3 liquidity management protocol that allows LPs to deposit single-sided assets into a Uni v3 pool. They combine the rewarding and simple experience of Uniswap V2 with the concentrated liquidity of Uniswap V3. They enable projects to build a treasury of project owned liquidity and everyday DeFi users to earn fees without needing to manage their pool positions.

Click here to read more about Angel Vaults.

Liquidity may be added to the Angel Vault in the following ways:

  1. Direct deposits by the $FOX community treasury,
  2. Incentivizing deposits by LPs,
  3. Purchasing LP with programs such as Olympus Pro Bonds, and/or
  4. Leveraging the assets backing $oneFOX to mint more $oneFOX and deposit it to the Angel Vault.

This liquidity should total a minimum of $2M $oneFOX to enable profitable rebalancing of the Angel Vault. $10M or more liquidity is recommended given FOX’s large Uni V2 FOX-WETH pool. We aim to decide on the appropriate methods and amount during the discussion process.

Benefits - ICHI’s Angel Vaults are the easiest and most cost effective way for projects to increase their liquidity floor, enabling:

  • LPs to earn more trading fees with less,
  • Liquidity rewards to increase the amount of buy side liquidity without also incentivizing sell pressure,
  • The inflationary cost of rewards to be offset by the deflationary minting of the project’s branded dollar, and
  • DAOs to build assets under management (AUM) backing their branded dollar and supplying DAO owned liquidity.

Drawbacks - If $FOX price declines in value, $oneFOX will be sold for $FOX. LPs will only be holding worthless $FOX tokens if $FOX price goes to $0.

  • Protect $FOX’s Price Against Market Crashes with an Angel Vault
  • Do Not Protect $FOX’s Price with an Angel Vault

0 voters


Hi Bryan, thanks for proposing this, I know there was some talk about this already and I loved what I have heard so far. I do have a few questions.

  1. I would love to get @MrNerdHair 's thoughts and analysis on this from a security standpoint. I remember a few things came up towards the end and caused some delays/issues getting the $oneFOX launched due to getting some stuff fixed. Have these contracts been audited by any 3rd parties yet additionally?

  2. Could you also let us know what the initial deposit/cost to the dao would be regarding getting this spun up on the initial batch? It looks like 2 million minimum, but upwards of $10 million+. What was Ichi’s spun up with initially?

  3. Is the Ichi-Vault the only one that exists now? If not, how have the other vaults done in the recent sell-offs? I have seen the Ichi results but would love to see it modeled out with a non-stable coin-related coin, especially with the sell-offs as we have seen recently.

  4. Based on how the poll is worded, it’s guaranteed to protect the price, is that an accurate representation?


I have to admit that I haven’t spent enough time to be fully confident that I understand all the aspects of risk associated with this proposal. My current best guess is that the primary risk is to the investors in the angel vault; because they are providing liquidity at price points other than the prevailing market price, they’d theoretically underperform compared to an optimal capital allocation. I believe the argument is that lower costs associated with impermanent loss and transaction fees would compensate for this loss, though. (I’m not 100% on how that works, but it seems plausible.)

Investors should also keep in mind the obvious risk that by participating they’ll be exposed to oneFOX. There’s a variety of mechanisms in oneFOX to limit risk, but there’s still a non-zero amount; the oneFOX treasury could be be mismanaged, or it could turn on the money printer and tank the reserve ratio. In any case, there’s some level of liquidity risk involved. (On the other hand, that risk is mostly correlated with decreases in the price of FOX – which is exactly the scenario where an angel vault investor would be swapping out of oneFOX and into FOX.)


An angel vault is certainly guaranteed to provide some protection against downward price movement, but I don’t think that’s really useful information. I think the more relevant point is that based on how the poll is worded, Brian’s a sales guy at heart :slight_smile:

  1. I remember a few things came up towards the end and caused some delays/issues getting the $oneFOX launched due to getting some stuff fixed. Have these contracts been audited by any 3rd parties yet additionally?

A: Yes, the contracts have been audited by a 3rd party: Certik. There were no delays launching the current feature set. We wanted another feature and decided not to do it after some delay.

  1. What was Ichi’s spun up with initially?

A: $2M

3a. Is the Ichi-Vault the only one that exists now?

A: Yes, it is the first one. We are recruiting the December cohort now.

3b. I have seen the Ichi results but would love to see it modeled out with a non-stable coin-related coin, especially with the sell-offs as we have seen recently.

A: The $FOX token will experience the next market crash without the Angel Vault’s protection if you wait until that crash to study the vault’s performance. This risk must be considered when deciding how fast to act on the proposal.

Meanwhile, the ICHI token is not a stable token. It is a governance token. Its price has been highly correlated to ETH in both up and down markets. The Angel Vault changed that during last week’s flash crash because the $oneUNI tokens in the vault were used to buy ICHI. These transactions are recorded and easily verified.

  1. Based on how the poll is worded, it’s guaranteed to protect the price, is that an accurate representation?

A: The proposal doesn’t mention any guarantees and there are obvious risks beyond a market crash. However, the Angel Vault protects the price by providing a buyer of last resort for the tokens. In financial terms, this is called a liquidity put contract: The protection is limited to the size of the vault. If the vault is small, it will provide little protection.
If the vault is larger, it will provide more protection.
If the vault is of enough size, there are not enough FOX tokens in the other liquidity pools (ie, FOX-ETH) to crash the price.


Correct, we are selling protection in the form of a liquidity put. It provides a buyer of last resort. The FOX tokens will get purchased from the other liquidity pools when prices drop, thus supporting the price. A vault of $104M would fully back the price of all $FOX tokens included in $FOX’s current market capitalization with no slippage. In practice, vaults have slippage, most circulating $FOX tokens aren’t for sale, and other liquidity sources exist. As a result, it doesn’t take nearly that much capital to provide meaningful protection.


I like this idea in principle but maybe you can help me understand something:

$FOX is illiquid which means there are few sellers compared to the total supply, and the price of $FOX is marked to market. Does the absence of liquidity not act as a natural resistance to sustained downside price action in its own?

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$FOX price will be strongly correlated to $ETH price because of the large Uniswap V2 liquidity pool. This is especially true if nobody is buying or selling in large volumes. It is good when $ETH is going up and bad if it is going down.

A Uniswap V2 $FOX-$USDC pool would break the correlation both up and down.

An Angel Vault only breaks the correlation when ETH is going down while enabling it to still be correlated on the way up.

Basically, any V2 style liquidity pool or centralized market maker will put up a lot of $FOX for sale. You can’t use an Angel Vault to put up $FOX for sale.


Update. We just calculated Internal Rate of Return (IRR) for the $oneUNI-$ICHI for the first time. It is 34.75% without including ICHI Rewards! This includes everything else (trading fees, impermanent loss, etc). Angel Vault - oneUNI/ICHI - Google Sheets


These Angel Vaults sound truly angelic :angel:

I love the idea of incentivizing buy-side liquidity over sell-side and am in full support of launching one of these.

To launch one of these asap, I would support the DAO minting $2M of oneFOX as the recommended minimum. While it’s an aggressive goal, I’m working to secure $2M of USDC by the end of the month via success token sales. If all goes well and we achieve this, the DAO could mint $2M oneFOX with 1.6M USDC and $0.4M of FOX and still have $0.4M of stablecoins left, and then start earn double digit yield on its $2M deposit.

I also really like the idea of launching an Olympus Pro bond program to purchase protocol-owned Angel Vault liquidity. This would satisfy bringing a steady stream of stablecoins into the DAO while also building a steady stream of buy-side liquidity for FOX, offsetting any sell-pressure resulting from the FOX rewards.

The Fox Foundation can also explore using some of its stablecoins to mint oneFOX and deposit into the angel vault to earn solid yield while also benefitting the DAO.



ICHI price correlation with ETH is broken once again on a down day in two transactions:

  1. Vault purchases 3,049 ICHI from Sushiswap. Ethereum Transaction Hash (Txhash) Details | Etherscan.
  2. Vault purchases 5,594 ICHI from Bancor. Ethereum Transaction Hash (Txhash) Details | Etherscan

This only used 1.4% of the value in the vault. Simple and effective. :muscle::innocent:


Finally got the time to read through this post and start to grok this concept some.

Ultimately, this comes down to incentivizing buy side liquidity with oneFOX (and only incentivizing that buy side liquidity). I don’t have a full conception of how the AngelVault does its rebalancing of price points etc and would like to understand that more, but in general I like the concept of the DAO incentivizing the minting of more oneFOX and that oneFOX being incentivized to create buy-side liquidity for FOX.

So I think, especially once I understand a bit better exactly how the angel vaults work, I would be for this proposal moving forward.

The main question is around how best to incentivize the angel vault, here are some questions and thoughts on the proposed ways of doing that:

I really like this concept but want to understand more how this would work. Can the $FOX community treasury create more oneFOX other than by first procuring some more USDC somehow? The TMDC is actively working on diversifying some of the treasury into stables, so perhaps this could be done as it gets more under its belt, but it would be nice if that was not a barrier to entry to this. Is there a way for the community to leverage its treasury to do this faster? Maybe by getting some USDC via a rari loan or the like and then using some additional FOX to mint more one$FOX and deposit. The details are important here for this to work and gain community support, but I like the concept of the treasury funding this because it also creates natural protocol owned liquidity (of stables!).

This may be a great way to get the full community involved, im not sure it would even take a ton or have to be a huge APR for it to work. In some ways this may be the simplest way to go, I would support some sort of FOX LM program for this that targeted 2-10 mil in deposits at around 30-60% APR or so on the deposits.

My initial knee jerk reaction was that this is not the way to go since I think the DAO should first focus on expanding into other simpler olympus bonds (like bonds direct for USDC/DAI and ETH), I am not sure how many bonds the olympus team will let us put up in their pro offering (it seems at least 3), but I am nervous of using those important slots on this right away. That said if we could go up to 4 and do one stable, one for eth, and one for this vault I would probably support that and could see that working well to build real significant buy liquidity in this pool over time that is owned by the DAO.

I really like this concept because it sounds like we could just use the assets already in the $oneFOX treasury to support this. I don’t fully understand how that works though, how much more oneFOX could those assets already mint and how exactly does that work? I would like a fuller explanation of this mechanism and what it might look like, but I really like this idea in some fashion especially in the initial bootstrap phase of getting this vault up and going.

Overall, the more I understand and think about this, the more I am bullish and would like to see the community move forward to make the angel vault a reality. The main question is how to incentivize and based on the analysis of above I think I favor a combination of (1) and (4) as a a starting place, perhaps in parallel with (2) as it gets going with a 2-3 month LM program focused on this, and finally I could see us launching (3) long term to really beef up the size of this vault but I don’t think that is where we should start most likely (though I am open to be convinced otherwise).

  1. Leveraging the assets backing $oneFOX to mint more $oneFOX and deposit it to the Angel Vault.

I really like this concept because it sounds like we could just use the assets already in the $oneFOX treasury to support this. I don’t fully understand how that works though, how much more oneFOX could those assets already mint and how exactly does that work?

The oneFOX treasury can print more oneFOX at will by “investing” its collateral in itself. If the vault holds, say, $20 of FOX and $80 of USDC, it can call the mint() function on itself, depositing its whole $100 balance back to itself in exchange for 100 oneFOX. This can be repeated ad infinitum to print arbitrary amounts.

The only check on this is that, according to the signing policy incorporated by reference into the oneFOX proposal, the minimum allowed treasury reserve ratio is 200%. There can be no on-chain enforcement of this number, so it’s up to the oneFOX treasury multisig signers to hold to that limit – or to the DAO to step in and undo any such mismanagement as best it can.

(Note that this doesn’t actually constitute an added security risk – a malicious (or incompetent) group of oneFOX multisig signers already has the power to outright steal (or burn!) the treasury, or invest it in junk, or invest it in something that invests in something that invests in oneFOX, all of which are more-or-less the same risk in different packages.)


I didn’t fully understand that, that explanation is helpful thank you @MrNerdHair . Maybe a combo of these options would be for the DAO treasury to simply deposit X amount of FOX into the one$FOX treasury to increase its collateral ratio, and then use what is in there to mint X amount more $oneFOX and use it to stand up this angel vault. If that could be done all with protocol owned FOX it could be relatively cheap/quick to do so.

You can 1) swap for $oneFOX for any asset on Uniswap V3 (once the pool is set up), or 2) mint $oneFOX with USDC + FOX. This %FOX paid to mint can be increased by depositing more FOX to the oneFOX treasury. You can of course borrow against FOX tokens to get the USDC required to mint.

ICHI is doing a 90 day reward program for this Angel Vault LP. Each month the amount of rewards is reduced. The logic is that this gives time for the other methods of supplying liquidity to accrue a significant amount.

Angel Vault liquidity has a number of advantages over other forms of liquidity:

  1. Simplicity: it is created with a single asset worth $1 ($oneFOX). People simply buy this asset and deposit it to make the LP.

  2. Efficiency: There are no FOX tokens deposited to create this LP. This means that you aren’t buying FOX tokens with the Olympus program. Instead, you are buying LP that is 90+% oneFOX. This LP could easily be converted to any other type of LP on an as-needed basis.

This is the most limited of the approaches as it does leverage the system. With today’s risk thresholds, we would ‘mint’ about $0.20 of $oneFOX for every USDC deposited to mint $oneFOX.

The combination of #1 and #4 allows you to generate about $1.40 of $oneFOX Angel Vault liquidity for every USDC used to mint $oneFOX!


One way to make the decision about which LP to buy with the Olympus program is to consider reversibility:

  • I buy $FOX with $oneFOX to convert Angel Vault LP to Sushiswap LP
  • I sell $FOX for $oneFOX to convert Sushiswap LP to Angel Vault LP

This is because you are purchasing 50% FOX tokens and placing them up for sale on an exchange when you buy Sushiswap FOX-ETH LP. In contrast, you are purchasing LP that can only be created with 100% $oneFOX when you buy Angel Vault LP and you are causing those $oneFOX to be deposited underneath the price of $FOX.

In addition, Angel Vault LP is much more capital efficient and has lower impermanent loss. This means you create lower slippage trades and more trading fees per dollar of LP with Angel Vault LP.

Next step, Ideation, can be found here: