Ichi.farm: Price Stability + Crypto Adoption
Capture value for your favorite coins instead of using dull or centralized stablecoins that compete with crypto.
Fair Launch: Ethereum Block Number 11260000
By: Masanobu Fukuoka
“I believe that a revolution can begin from this one strand of straw.” Masanobu Fukuoka, One Straw Revolution
1. Price Stability and Excess Reserve Funds
Cryptocurrencies will be used as electronic cash by billions of consumers when crypto can provide these three features:
- Minimal price volatility so consumers can reliably pay expenses and taxes,
- Discounts and incentive models capable of compelling mass adoption, and
- A way to drive the value of consumer adoption back into scarce crypto assets.
Ichi.farm proposes the following plan:
- Mint stablecoins for every cryptocurrency community, each collateralized by their respective coin.
- Apply market forces to set the level of reserves backing the stablecoin between 0–100%. Capture excess reserves in each cryptocurrency.
- Fund adoption incentives with the excess crypto reserves through a community governance process.
Over the next 90 days, ichi.farm will give the Bitcoin community, Ethereum community, and 8 other cryptocurrency communities a stablecoin and an excess reserve fund, governed by their respective communities and denominated in their respective coins.
2. The Core Innovations of ichi.farm
The design of ichi.farm was inspired by several other crypto projects and is indebted to their innovation and experimentation. Here are a few of the most important insights:
- Crypto Stimulus Spending Powers Consumer Adoption (Inspired by Chai and Crypto.com)
Both Chai and Crypto.com hit 2M+ unique users in 2020, proving that incentives drive consumer demand to keep and spend crypto. However, both projects are limited by their focus on driving adoption for their own cryptocurrencies. Ichi.farm is designed to provide purchasing power protection, attractive yields, discounts and perks to any existing cryptocurrency. - Demand-driven Reserves (Inspired by FRAX and Chainlink)
Ichi.farm stablecoins start with a 100% reserve ratio. Next, market demand gradually decides whether the actual reserve ratio moves down towards the minimum reserve ratio or back up towards 100%. Ichi.farm copies the Chainlink model of providing utility to existing cryptocurrencies by putting important stablecoin decisions like minimum reserve ratio and the investment decisions regarding excess reserves into the self-governance of these communities. - Bumper Crop Yield Farming (Inspired by Bitcoin and Compound)
Today’s DeFi projects lure yield farmers by promising them a return in proportion to their wealth. But this is unnatural: nature doesn’t farm while farmers sit and watch. Successful farming should require knowledge and persistent effort like Bitcoin mining. Ichi.farm’s bonus structure will reward “bumper crop” ICHI tokens to hard working farmers.
3. The ICHI Governance Token
Ichi.farm is a living agreement between major cryptocurrencies to drive mass adoption of crypto through purchasing power protection, attractive passive income, and superior incentives to actually use each of these cryptocurrencies. The terms of this agreement will be proposed, voted on, and governed by a single governance token, the ICHI token.
Masanobu Fukuoka hopes that strong leaders will emerge from each cryptocurrency community to assume multi-sig responsibilities for that cryptocurrency’s stablecoin and associated excess reserve fund. Masanobu Fukuoka believes that holders of the ICHI token should propose and vote on ways to recruit, nominate, elect, and compensate these leaders.
4. A Stablecoin for Every Cryptocurrency
Each cryptocurrency community will govern a fully-autonomous ichi.farm stablecoin designed for their cryptocurrency. For example, ETH-oneETH LP token holders will govern oneETH, the stablecoin for the Ethereum community. At first, each ICHI stablecoin will be minted by depositing $1 of an existing stablecoin (ie, USDC) that serves as collateral in case the stablecoin holder would like to return it for $1. However, as demand for the stablecoin increases, the protocol will gradually adjust the reserve ratio so that you pay $1 of value in two parts: (1) in an existing stablecoin, such as USDC, and (2) in a major cryptocurrency, such as ETH. For example, at a 99% reserve ratio, you must pay $0.99 of USDC and $0.01 of ETH to get a new oneETH token.
5. Trading Fees and Staking Rewards
You can provide liquidity into pools for each of the ichi.farm stablecoins and earn rewards in the form of ICHI tokens as well as trading fees (0.3%). Using the Sushiswap contracts, 0.25% of the 0.3% trading fee goes to active liquidity providers (LPs) while the remaining 0.05% is converted into ICHI and distributed to ICHI stakers.
6. The Fair Launch
The ICHI token will have a 100% fair launch. There is no initial development fund, no pre-mine, and no investor allocation. This maximizes decentralization and community participation. 10 ICHI tokens will be fairly farmed per block for 500,000 blocks. This makes a total supply cap of 5M ICHI. The liquidity pool schedule is in Table 1.
7. The Farms
At launch, 5 ICHI tokens per block are split between eligible farms (liquidity pools with active rewards). The farming schedule is in Table 1. Each farm’s share is distributed to yield farmers in proportion to their staked liquidity tokens. These initial cryptocurrencies were chosen based on market adoption and their diverse approaches to decentralized governance. The last 5 cryptocurrencies will be selected by a community nomination and voting process. ICHI staked in the ICHI-ETH, ICHI-oneETH, ICHI-oneBTC, and xICHI pools will be used to calculate ICHIPOWAH (ICHI voting power) in the community voting process.
Table 1. Farming Schedule
8. Bumper Crop
At launch, there will be an ICHI bumper crop of 5 ICHI tokens per block. Yield farmers may earn a share by seeking more valuable Block Ranks. Farm workers may also earn a share when they help harvest the bumper crop by paying gas to update the bumper crop balances of yield farmers.
Here are the basics of the bumper crop reward logic for a farm:
- A Block Rank is assigned to each farmer in descending order of staked LP tokens.
- A Block Number is cut from the end of the Ethereum block number. This number is less than or equal to the number of farmers.
- An equal share of the bumper crop goes to farmers with Block Ranks where the Block Rank divides evenly into the Block Number, or the Block Number divides evenly into the Block Rank. (Note: The number of winning Block Ranks may not exceed the maximum per block or the maximum per update pool transaction.)
A block’s bumper crop reward is paid to farm workers whenever the number of would-be winning farmers in a block exceeds the maximum winners per block or the maximum per update pool transaction. The amount a farm worker is paid depends on how many winners they update in a transaction and the current reward per updated farmer balance. If farm workers race to update the pool, the reward per updated farmer balance will go down. If farm workers are slow to update the pool, the reward per updated farmer balance will go up.
You can use this worksheet to simulate the bumper crop reward logic for any Ethereum block number and number of farmers.
9. Bootstrapping Early Success and Engagement
Famers will compete to earn valuable ranks and a greater share of the bumper crop. They will use the ichi.farm exchange which will drive more liquidity. Increased liquidity will improve user experience by reducing price slippage. This virtuous cycle will help bootstrap the early success of ichi.farm.
When farm workers update the farmer’s balances, they will spend time and effort and be rewarded for their work. This will improve the engagement of the community and, ultimately, the governance of the protocol.
10. Multi-Signature Governance Elections
Liquidity providers will use their LP tokens to vote on signers for each stablecoin and the ICHI token itself. The initial proposed approach is to use a Twitter nomination and Snapshot voting process similar to the one that gave Sam Bankman-Fried and the other Sushi multi-sig signers ownership of Sushiswap multi-sig wallet.
Masanobu Fukuoka hopes the community will propose, vote, and fund ways to organize elections, moderators, forums, etc, in advance of each election. When done properly, strong leaders will emerge from the community for each stablecoin, as well for the ICHI token itself.
11. Fractional Reserves
If market demand drives the reserve ratio to something under 100%, a multi-signature wallet will begin to receive value from cryptocurrency (for example, ETH) paid to mint new stablecoins (for example, oneETH). This is the ichi.farm excess reserve fund for that stablecoin. Its use will be governed by Snapshot LP token voting by the LPs in the liquidity pool of Table 1. For example, oneETH-ETH LPs will govern the use of the ichi.farm oneETH fund of excess ETH. The results of the votes will be executed by the multi-signature representatives.
12. Ichi.farm Excess Reserve Funds and Mass Adoption
The ichi.farm excess reserve funds (denominated in each cryptocurrency and created through demand-driven fractional reserves) are intended to be used to make consumer offers (ie, superior deals and perks at checkout) that will make it less costly to adopt the underlying cryptocurrencies. Ultimately, these roadmap decisions are left to snapshot voting by the LPs of the pools in Table 1 and the multi-sig execution of their elected signers.
13. Security Audit
The code’s first audit has been conducted by Bramah Systems. However, additional audits are important. 10 ETH will be immediately paid to the first of the following firms to announce that they will publicly audit the contracts: Trail of Bits, PeckShield, OpenZeppelin, Consensys, Certik, and Quantstamp.
14. How can you get involved?
Join the Discord server, follow on Twitter, and join our Telegram group. The UI will go live on http://ichi.farm at Ethereum block 11260000.
15. Smart Contracts
The contracts are available on Github with an MIT license. Source codes from other projects, including Uniswap/Yam/Compound/OpenZeppelin/FRAX, are subject to their licenses. Here are the contracts:
oneETH: The contract for the Ethereum stablecoin. There will be a oneBTC, oneLINK, etc contract for each additional stablecoin.
ichiToken: The contract for the ICHI governance token.
ichiFarm: The distribution of the ICHI rewards to liquidity farmers.
ichiBuyer: Gets 0.05% of trading fees for ICHI stakers.
ichiStake: Stake ICHI and get ICHI.
GovernorAlpha+Timelock: Compound Governance. Will not have multi-sig signers until community election. There will be a 48hr timelock. The transfer of excess reserves will be blocked for 30 days after the launch of each stablecoin to allow time for multi-sig elections.
collateralEthOracleFactory: Uniswap oracle for oneETH collateral.
oneFactor: You can input a number and get back all its factors. Used for bumper crops.
oneStablecoinEthOracleFactory: Uniswap oracle for ETH.
