The ICHI team has built businesses and products for large multinational businesses as well as early crypto start ups including:
- Lending services for sellers in the Amazon marketplace
- Enterprise blockchain as a service at IBM
- Artificial intelligence offerings at spx.ai
- Public cryptocurrency software at Hedera Hashgraph
The team’s expertise covers smart contract architecture and security, distributed application development, front end development, and product management.
The core team formed as a community to create ICHI, a protocol for issuing stable and secure stablecoins for any cryptocurrency community. V2 of the platform was rewritten for scale and stability in under 6 months including audits by Quantstamp and Solidified. Since its launch, it has supported the launch of about one community stablecoin a week while empowering each community to fully govern its own community.
Today, the stablecoin market is dominated by tokens managed by financial institutions. This requires (1) users to sell their crypto to get a stablecoin and (2) the financial institution to centrally manage collateral behind the stablecoin. As a result, value continues to accrue in large centralized institutions responsible for managing their balance sheets while putting the entire crypto economy at risk.
The current stablecoin market now exceeds $100 billion as traders turn to USDC and Tether as a way to reduce exposure amid declines in the prices of Bitcoin, Ethereum and other cryptocurrencies. Yet, these stablecoins actually put the crypto economy at greater risk by independently governing their collateral with their own profit motives in mind.
We believe that each community should be able to fully govern their own currency: both a long term store of value and a stable medium of exchange. The demand is evidenced in the financial and launch support received from projects including:
ICHI’s Decentralized Monetary Authority (DMA) protocol solves this parasitic stablecoin relationship for the first time by enabling any crypto community to create a stablecoin, oneZEC, that is backed by a blend of fiat-backed stablecoins and ZEC. This increases the demand for ZEC and increases value locked in the community treasury.
In addition to enabling any crypto project to create an in-house stablecoin, ICHI’s protocol, audited by Quantstamp and Solidified, provides Zcash with the tools needed to operate their own economy by managing the collateral in the oneZEC treasury. The treasury backing oneZEC ensures a stable offramp fo fiat, generates yield for the community through use in DeFi, and can incentivize usage across payments and any other community prioritized use case.
ICHI would deploy a Decentralized Monetary Authority (DMA), a DAO-like set of smart contracts customized for the purpose of managing community currency, to create. oneZEC on Ethereum. The oneZEC asset would be accessible by any Ethereum wallet or application, including the ICHI Application (app.ichi.org).
ICHI would incentivize the initial minting of oneZEC, and create AMM pools to support liquidity for the stablecoin.
The ICHI platform:
- Allows third party projects to issue their own collateralized stable currency (oneToken) for any cryptocurrency community.
- Applies market forces to set level of reserves backing the stablecoin between 0-100% to provide stability that is just as good as fiat-backed stablecoins, which a user can redeem for exactly 1 USDC.
- Locks up existing native project tokens to collateralize oneToken, and is fully on-chain creating more demand for said project token backing oneTokens.
- Gives oneToken holders the ability to govern their own individual project’s Treasury.
Additionally, ICHI introduces a Decentralized Monetary Authority (DMA) as an innovative DAO-like governance model for managing each oneToken. The DMA ensures minting and redemption at $1, governance of community treasuries by oneToken holders, and autonomous execution of any yield or incentive strategies chosen by the community.
Decentralized Monetary Authority:
oneTokens are ICHI designed stablecoins built for cryptocurrency communities. oneTokens keep their value at $1, are purely on-chain, and are supported by a community treasury in each oneToken’s native project tokens. They provide the hard peg of centralized stablecoins without sacrificing on decentralization.
Table 1: Feature Comparison by Category of Stablecoin
|Feature||Algorithmic||Fiat Backed||Crypto Backed||ICHI Stablecoins|
|Mint for Exactly $1||No||Yes||No||Yes|
|Redeem for Exactly $1||No||Yes||No||Yes|
|100% On-Chain Reserves||Yes||No||Yes||Yes|
Core Technical Concepts:
A key principle of ICHI’s architectural design is Modularity. The ICHI platform allows for components to be modular (similar to a microservices architecture) in order to allow for simplified and safe updates/upgrades when certain logic within contracts need to be changed. Additionally, the platform has certain components that are meant to be permanent, yet can be upgraded through a Proxy process. This allows ICHI to be simple and safe to upgrade as well as customizable (as it pertains to oneToken implementations). It increases separation of concerns, enables code reuse, and gives clarity into which jurisdiction applies to each guarded function.
The figure below provides a view of how each of the components in the oneToken system are deployed and what contract owns/admits each component.
The function of each component in the oneToken Component Interaction Diagram is shown here.
One of biggest risks to the crypto economy is the mismanagement of collateral backing fiat stablecoins managed by centralized financial institutions. Billions of dollars in value could be destroyed through institutional failure without true audibility or community governance of how collateral is used. This could prevent mainstream adoption, hinder value exchange on decentralized applications, and ultimately harm crypto communities.
When minting ichi.farm stable coins, you are exposed to some risks:
Smart contract issues, bugs, or economic loopholes/exploits with the ichi.farm protocol
Risks with the digital assets used as collateral, typically stable coins:
- Maker Dao risks
- USDC risks
- USDT risks
Market, trading, liquidity, and exchange risks associated with non-collateral, cryptocurrency assets
Governance risks: Governance could make poor decisions on treasury management or important stable coin parameters, such as minimum reserve percentage
When providing liquidity to the ichi.farm exchange, you are exposed to many risks:
- Smart contract issues
- Impermanent loss
- Market, trading, liquidity, and exchange risks
When staking liquidity pool tokens to get ICHI, the ichi.farm governance token, you are exposed to many risks:
- Smart contract issues
- Market, trading, liquidity, and exchange risk
Success of oneZEC could have two unintended consequences:
- Users will require additional education and awareness of this new asset and the use cases for which it is best suited.
- Activity could continue to grow on Ethereum where the asset will first be issued.
All success metrics are publicly verifiable and shared between ICHI and the community who is creating their stablecoin. The following are those metrics we find most indicative of usage of any ICHI stablecoin:
- Minted onZEC
- Treasury ratio
- Total Value Locked in oneZEC
- oneZEC holders
- oneZEC transaction volume
- renZEC price
Launching oneZEC does not have any dependencies from a technical perspective. oneZEC can be deployed in a matter of hours with sufficient liquidity of renZEC in an AMM.
The core dependencies center on the community governance processes to incentivize the initial minting ond usage of oneZEC.
Step 1: Receive feedback on oneZEC proposal
Step 2: Define shared incentive amounts to provide users of oneZEC
Step 3: Deploy oneZEC DMA
Step 4: Announce
Step 5: Start liquidity rewards
Budget request: $250,000 in the form of renZEC or ZEC.
- $50,000 to mint the initial oneZEC.
- $200,000 deposit to the oneZEC community treasury (governed by oneZEC holders).
This will be matched by at least $200,000 in liquidity rewards from the ICHI community distributed to oneZEC users.