Proposal: $oneFOX Stablecoin, For $FOX Sake

Exactly, ICHI was created by a group of people who had spent years working with crypto projects trying to solve that very issue. The bottomline: it never made sense to rely on different communities for the different features of currency. Every community should govern store of value, unit of account, and medium of exchange to further their mission.


I posted the meeting thread link above to the discord, not sure if you saw that or not.

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Thanks. found and join - let’s coordinate a community call there :ok_hand:


So let’s say I mint $1 of oneFOX. I put in $0.50 USDC and $0.50 FOX. I will get out 1 USDC out of the USDC vault upon redemption; half I know will be there because I put it in, but the other half has to be covered by the community selling FOX from the FOX vault to rebalance.

As a holder of oneFOX, I’m exposed to the downside risk that the community will fail to rebalance in a bear market, but I experience no corresponding upside risk. Why would I ever hold oneFOX instead of immediately redeeming it for USDC so that I can avoid that downside risk? Or to put it another way, why would I loan the treasury $0.50 in USDC interest-free?


These are great questions @MrNerdHair and even after reading through the docs I didn’t fully understand myself.

@ICHI or @Kobayashi perhaps you could answer that here in the thread for those following? Would probably help us understand the idea a lot better.


The way ICHI model works is that there’s always $USDC to redeem, and as such a new oneToken will never start with a 50%/50% minting ratio. these are the 2 options that gives this confidence the pool is always able to cover the redemption:

  1. $oneFOX launches with 100% minting ratio - this means every $oneFox is minted with exactly $1 USDC - only once enough collateral is build, gradually minting ratio will decrease so more $FOX are required to mint $oneFOX

  2. Shapeshift DAO deposit a pre deposit loan to the $oneFOX contract, which serve as a treasury collateral, and that builds the confidence there is enough backing. in that case minting ratio can start at 80%/20% (the loan can be anywhere between 0-$1000K worth of $FOX to the entire DAO treasury…)

In this case of 80%/20% - let’s assume $1M minted at launch - the pool holds $800K USDC and $200K $FOX , plus the pre-deposit loan from Shapeshift DAO - so there’s enough USDC for anyone to claim $0neFOX to $USDC


Can you go into a bit more detail about this pre-deposit loan? I’m having trouble understanding how $1M oneFOX can be redeemed for $1M USDC if the pool contains only $800K USDC, $200K FOX, and a pre-deposit loan of even more FOX. If there’s no liquidation risk for the DAO, how can there be no risk of default for oneFOX holders?


There is a minimal treasury reserve ratio to maintain. when the treasury value (= value of the native token in treasury- $FOX) goes below that minimum value, it will rebalance and exchange $FOX to USDC to ensure there’s always enough $USDC for redemptions.
We currently use 150% treasury reserve ratio whenever treasury backed is $50k+

Let’s assume $1M $FOX was pre deposit to the treasury (without minting $oneFOX).

After the first $1M $oneFOX minted (let’s assume 80%/20%) minting ratio - we have
$800K USDC + $1,200K worth of $FOX backing $1M of $oneFOX.
Treasury reserve ratio = 1200/200=600%.

Checkout this dashboard of existing treasury status:



I do see that this scheme substantially reduces the risk of default, but it’s still non-zero. An 80-20 minting ratio still means that you’re effectively loaning the treasury $0.20 USDC interest-free. Sure, the risk of default may be low, but why wouldn’t a oneFOX holder immediately redeem for USDC to eliminate that risk?


$oneFOX will offer better rates for saving in compare to other stablecoins and
as more use cases are introduced, the utility in the Shapeshift ecosystem grows, and holders of $oneFOX can get better discounts to favor the use of the protocol native stablecoin over 3rd party stablecoins

Overtime - the $oneFOX collateral put to work and growing, can further subsidize incentives and work valuable to the Shapeshift DAO.

All of the above make #oneFOX more attractive for saving & using / spending in the Shapeshift ecosystem.

As for the risk - notice that the pool is always fully (and over) collateralized - so the edge scenario is more $FOX is converted to $USDC.


@MrNerdHair You are right. If the FOX community adopts a oneFOX policy that its holders consider risky, they will switch to another stablecoin or even back to fiat itself.

They could decide to make oneFOX significantly safer than USDC … backing every oneFOX with a USDC + building a treasury of FOX.

Or they could decide to make oneFOX riskier with one of your hypothetical situations.

But the important thing is that economic policy should be up to the FOX DAO not Tether, Centre, or some other community/government. Not your stablecoin, not your money.


Finally took the time to catch up on this thread and dig into ICHI. Thank you @ICHI for reaching out and teaching us about this fascinating new primitive you all have built, it’s tough to keep up with all of the innovations these days. Cool to see projects like 1inch and Gitcoin have already launched their own community stable coins.

I would love to dive deeper with you guys on a public call in the discord and just followed up in the thread @huntthewick created about scheduling something next week.

In the meantime, can you share the formula, or even better a chart or spreadsheet here and/or on the call for calculating mint ratio based on reserve depth? Is this something $oneFOX holders can config as long as a minimum collateral ratio of 150% is upheld?

Also, if I understand correctly, it sounds like in a black swan scenario where if the price of the collateral asset decreases significantly, it would be possible for a “bank run” to occur. In this case, would the community treasury be automatically liquidated for USDC and then 1 $oneFOX redeemed for 1 USDC until the reserves run out, such that the last $oneFOX holders are left with nothing?

Also curious to hear examples of how you envision $oneFOX being used in ways other than the obvious flow of the DAO minting it to pay it to stakeholders in the ecosystem who then convert it back to USDC.

Why would a stakeholder prefer to be paid in $oneFOX vs. USDC?

Thanks and looking forward to learning more


To add some additional color to Willy’s question about holding oneFOX instead of USDC:

  • How are existing users of Ichi stablecoins dealing with the friction that comes with having a non-fungible store of value (in other words, a holder couldn’t simply swap oneFOX for another token, or for goods and services as in the case of USDC)? As such, there are “switching costs” when using oneFOX, relative to holding plain old USDC. Can you spell out how the economic benefits of oneFOX outweigh those switching costs?

For community members checking out Ichi for the first time, I found this deep-dive to be helpful: How Does Ichi Work? The Decentralized Monetary Authority Model - YouTube

With respect to audits and code stability/security, Ichi has gone through that process with both CertiK and Quantstamp; both are very reputable names in the smart contract auditing space.


Awesome Qs. Sorry for the slow reply as I was on an anniversary vaca.

Q: In the meantime, can you share the formula, or even better a chart or spreadsheet here and/or on the call for calculating mint ratio based on reserve depth?
A: During our POC, we started with a simple formula (copied from We discovered that it was useless and random. With ICHI V2, we broke minting ratio logic out into a separate contract called mintmaster. Mintmaster can be used to apply any formula you can implement to the minting ratio of a specific mint action. oneFOX governance decides which mintmaster it wants to use at any given time. For now, we mainly use static minting ratios set for safety based on around 4 different common patterns. But we expect that many more will emerge to maximize benefits to a specific economy. I could talk for hours on this topic :slight_smile:

Q: Also, if I understand correctly, it sounds like in a black swan scenario where if the price of the collateral asset decreases significantly, it would be possible for a “bank run” to occur.
A: Single day market volatility is a known risk and you can set up the ICHI system according to your maximum single day market decline tolerance, even a decline to worthless. BTW, a single day decline to worthless is possible for every asset in the world. It is even more possible for assets sitting on blockchains that are just a decade old (at most). We have a long list of risks in docs.

Q: How can $oneFOX be used?
A: Every community deserves its own money. Money is only good for two things: spending and saving. Without $oneFOX, the FOX DAO will be limited to incentivizing saving schemes. :frowning: With $oneFOX, the FOX DAO can incentivize spending and saving. This means it can incentivize full economic participation by any business or person :slight_smile: Ask yourself, if you plan to be the most influential community in crypto, why would you pay banks like Tether and Circle to be at the center of your community and steal your influence? Does it make sense to rely on them for one of the most important functions of money? Would it be better if you had complete freedom over how to spend, invest, and otherwise use your money?

Q: Why would a stakeholder prefer $oneFOX vs. USDC?
A: Because with $oneFOX they can benefit from $oneFOX powered discounts when spending and interest when saving. USDC has yet to spend the value accruing in their bank account on Fox DAO’s priorities.


Hey @ICHI after the great AMA/discussion this last week, it would be great if you or someone else from the ichi community could put together a draft proposal (in ShapeShift proposal format) for the DAO to consider so we can start talking seriously about what it may look like to move this forward?

Then any other questions/examples can be talked about in reference to that draft proposal in this thread and we can start aligning on potentially moving this to the next phases of governance.

It would also be worth the community discussing if we are going to move forward an ichi proposal what sort of discounts we give to those who mint $onefox as well as if we want to allocate any fox farming rewards to a an eth/$onefox or usdc/$onefox pool or the like (maybe even look into pools) as well as potential ichi farming awards to go along with it. Based on the convo earlier this week that seems like an important aspect to go along with the proposal itself.


I approach any business venture with a focus on what legal ramifications there are/might be and try to stay as current as I can with my finger on the pulse of what the current direction the regulatory bodies that would enforce them is. US, UK, Japan, China, Russia, UAE, ect…

Recently just read up on the UKs Regulatory Approach to Cryptoassets and Stablecoins: Consulation and Call for Evidence.

Specifically, as it relates to this subject, stablecoins seem to be a target of regulatory oversight in the UK. The reasoning laid out is to differentiate a “utility coin” and a “security” or what else they call e-money token’s (EMRs), which seems to be structured similar to the US FinCen, registered money services transmitter business guidelines, which would bring these types of issued assets into the scope of regulatory scrutiny.

It’s great that ShapeShift is transitioning to a DAO, but I’ve already seen oversight committees release statements that if a DAO is structured in a way that there are only a few “whales” whose votes dictate the direction of a DAO then that is who will be held responsible if the DAO comes into the crosshairs of regulatory enforcement.

Disclaimer: I am not a ShapeShift “whale”, but the same could be said for any DAO that mints it’s own stablecoin. I might make a suggestion to ICHI to contact your congressmen/senator or state blockchain association that is helping shape policies.

Disclaimer: I do contact my congressmen and senators, and any relevant government entity or otherwise when I have something to address that is in my cross hairs.

Something to consider. Just another risk. :ok_hand:

For reference.

"In the Journal interview, Gensler took issue with the claim by many DeFi developers that because they handed project control over to a decentralized autonomous organization — or DAO — no SEC oversight is required.

“There’s still a core group of folks that are not only writing the software, like the open source software, but they often have governance and fees,” Mr. Gensler told the Journal. “There’s some incentive structure for those promoters and sponsors in the middle of this.”

Calling the term DeFi “a bit of a misnomer,” Gensler added that most projects “facilitate something that might be decentralized in some aspects but highly centralized in other aspects.”


Link to draft proposal … Proposal: Launch $oneFOX


Ideation post created (voting starts in a day): Boardroom Management Portal


Proposal is Live - please go vote!

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Update: We received feedback that the participation reward should not have been included in a Shapeshift proposal. As a result, we deleted the first posting of the proposal to give the Shapeshift community an opportunity to discuss it.