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ICHI

ICHI is a decentralized finance (DeFi) protocol that focuses on creating sustainable liquidity through its Vaults. The protocol combines single-token deposits with concentrated liquidity to optimize capital efficiency for liquidity providers.

Categories:

DAO

DeFi

Updated:

2023-06-28

Tags:

Liquidity Management

Ticker:

ICHI

Token Strength.

Token Utility:

The $ICHI token is the native token of the ICHI protocol. It can be used to provide liquidity to ICHI Vaults. Holders of ICHI tokens can stake their tokens, thus receiving xICHI which gives users: 
- ICHIpowah to propose and vote on ICHI governance proposals to determine future features and/or parameters of the ICHI platform as well as protocol improvements, with voting weight calculated in proportion to the tokens staked.
-Rewards for participating in governance proposals. Only users who have participated in submission of proposals, commenting, reviewing and/or voting are entitled to receive ICHI token governance rewards.

ICHI token is also used to incentivise and reward the community for providing liquidity to the Vaults and reward community members for their contributions.

Demand Driver:

There are multiple parties who are likely to buy the $ICHI token:
- Investors and Speculators: Individuals or entities looking to invest in the ICHI token for potential capital appreciation or trading opportunities may buy the token. These buyers often speculate on the future value of the token based on factors such as market trends, project developments, and overall sentiment.

- Liquidity Providers: Users who wish to provide liquidity to the ICHI protocol's liquidity pools may need to acquire the ICHI token to participate. Liquidity providers play a crucial role in the protocol by depositing their tokens and earning fees or rewards in return. They may purchase the ICHI token to contribute to the liquidity pools and engage in yield farming.

- Governance Participants: Individuals or entities interested in actively participating in the governance of the ICHI protocol may buy the ICHI token to acquire voting power and influence decision-making processes. These participants often have a long-term interest in shaping the direction of the protocol and ensuring its success.

Value Creation:

The value created by ICHI protocol lies in its decentralized finance (DeFi) ecosystem. It prioritizes sustainable liquidity and capital efficiency. By addressing liquidity provision challenges, ICHI combines single-token deposits with concentrated liquidity in Vaults, fostering sustainability. This approach enhances capital efficiency, reduces impermanent loss, and offers a stable trading environment. With a focus on these elements, ICHI protocol revolutionizes the DeFi landscape.

Value Capture:

Value Accrual to Protocol:
- The ICHI Protocol collects 10% of the trading fees generated from Liquidity Providing activities.
- A portion of the trading fees, specifically 10%, is designated to cover the gas fees incurred during the process of rebalancing the pools.

Value Accrual to Token:
- By staking ICHI tokens and locking them in a smart contract, there is a potential for the token's price appreciation. This is because the staked tokens are effectively removed from circulation, leading to a reduction in the available supply.

Business Model:

The business Model for ICHI Protocol:
Revenue comes from: 
* Liquidity Provider (LP) Trading Fees:  A portion of these fees is collected by the protocol as revenue. Higher trading volume generally translates to increased revenue for the protocol.

Revenue is denominated in:
Uniswap v3 Tokens

Revenue goes to:
- The DAO’s treasury
- Balancing of pools
- Liquidity Providers

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Protocol Analysis.

Problems & Solutions
Problem: 
* Currently, decentralized exchanges (DEXs) like Uniswap v3 lack sophisticated and decentralized market-making infrastructure, resulting in inefficiencies compared to centralized exchanges (CEXs). As a result, most trading volume still occurs on CEXs due to their access to institutional market makers.  However, this comes with the risks of trusting a custodian, such as the chance of fraudulent behavior.

Solution: 
* ICHI Vaults is a trustless market-making protocol that enables the use of sophisticated algorithmic strategies on Uniswap V3. Liquidity providers can use ICHI Vaults to have their funds managed in a capital-efficient, non-custodial, and transparent manner. All activity occurs on the blockchain, providing transparency for protocols to monitor performance.
Predecessors
Arrakis: Arrakis is web3's trustless market making infrastructure protocol that enables running sophisticated algorithmic strategies on Uniswap V3. Liquidity providers can utilize Arrakis Vaults to have their liquidity be managed in an automated, capital efficient, non-custodial and transparent manner. https://www.arrakis.finance/ 

Gamma: A protocol for active liquidity management and market-making strategies. Gamma offers non-custodial, automated, and active concentrated liquidity management services. https://www.gamma.xyz/

DefiEdge: Permissionless Liquidity Management on Uniswap V3. DefiEdge provides the solution to deploy liquidity and optimise yields on Uniswap V3. https://www.defiedge.io/

Investment Take

... coming soon

Tokenomics Timeline.

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    Ecosystem Users.

    NameRole
    Communities
    Communities are the primary participants in the ICHI ecosystem. They are groups of individuals or organizations that create and govern their own Decentralized Monetary Authorities (DMAs) using the ICHI protocol. 
    Liquidity Providers (LPs)
     Liquidity Providers (LPs) interact with the ICHI ecosystem by depositing tokens into the Vaults, providing liquidity for trading, earning fees and yields, and potentially participating in governance activities. 
    Token Holders/ Stakers
    Token Holders acquire the $ICHI token for various reasons. $ICHI holders possess governance rights which allows them to actively engage in community governance by proposing and voting on protocol changes. ICHI tokens offer opportunities for yield generation through staking programs or liquidity provision in the protocol's Vaults.

    Resources.

    Author.

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