Fuse and ICHI have collaborated to launch the ICHI angel vault on Uniswap V3 for the FUSE-oneFUSE trading pair. Fuse also launched a liquidity rewards program for the depositors on the vault.
In July, we announced the collaboration with ICHI centered around the creation of the oneFUSE stablecoin for the Fuse community, as well as its associated community-governed decentralized monetary authority. At the time of publication, a total of 1.68 million oneFUSE are in circulation, according to the ICHI dashboard.
The oneFUSE stablecoin is pegged to the US dollar and is fully backed by USDC and Fuse’s native FUSE token. Currently, the minting ratio is 90%, meaning that a user wishing to mint 10 oneFUSE needs to deposit 9 $USDC and $1 worth of $FUSE.
The FUSE deposited when oneFUSE is created is allocated to the oneFUSE treasury. If a user redeems oneFUSE, they receive 1 USDC for each oneFUSE, while FUSE tokens remain in the treasury. Thus, the minting of oneFUSE reduces the circulating supply of the token and slows the downward pressure on the FUSE token price.
Today, we are happy to announce a major upgrade of the Fuse-ICHI partnership, the launch of an ICHI-powered Angel Liquidity Vault for the FUSE token on Uniswap V3.
ICHI Angel Liquidity Vaults explained
Uniswap V3 is the latest and the most popular version of the Uniswap automated market maker (AMM)-based decentralized exchange protocol. Its key difference from Uniswap V2 is that the funds that liquidity providers deposit into pools do not cover the whole possible price range of trading. Instead, LPs are free to concentrate their liquidity within a certain price range in which that will be used for swaps across the pool.
Uniswap V3 also allows depositing liquidity into an existing pool in just one token. An ICHI angel vault is essentially a deposit of an ICHI-powered stablecoin into a Uniswap V3 or similar pool with that stablecoin and another token made just below the current price. Its main aim is to absorb the price shocks to the price of the token through additional liquidity on the buy side that comes into action when the price starts going below the current price range.
If the price of the angel vault-supported token goes up significantly, the vault can be modified to target a price range just below the new price.
An Angel Liquidity Vault for FUSE
Fuse has created a FUSE-oneFUSE trading pool on Uniswap V3, as well as an ICHI angel vault on the pool. In doing so, Fuse joins the first cohort of projects to make this move alongside ShapeShift DAO and Wing Finance.
In order to create more buy-side pressure on the FUSE token, Fuse has launched a liquidity rewards program to incentivize additional deposits of oneFUSE to the angel vault. At the time of writing, those depositing oneFUSE to the vault can expect to earn a 120.8% APY, not including their share of the Uniswap V3 trading fees.
The Fuse team is thrilled by the successful evolution of the collaboration with ICHI, and we hope that the launch of the angel liquidity vault for the FUSE token will help stabilize its market price. A Fuse price with support against a bear market will boost user confidence in the token and strengthen conviction around future use-cases for the FUSE token.
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