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ICHI, a white-label stablecoin solution for DeFi projects, has just raised $3.5 million to continue its partnership drive.
Conducted by the ICHI Foundation, several firms including Fundamental Labs, TRGC Limited, Lattice Capital, Lightshift Capital, and several others all participated in an ICHI token sale to raise funds.
The capital raise will provide the stablecoin provider with the necessary resources to continue recruiting more decentralized finance (DeFi) projects for its services.
The service is simple; instead of selling the native governance token in exchange for stablecoins to conduct business or generate liquidity, ICHI provides the tooling to turn those native tokens into collateral for a stablecoin.
Called the ICHI oneToken, several notable DeFi projects are already involved.
There is, for instance, a oneUNI token for the Uniswap community, a oneFIL for the Filecoin community, and a oneFOX for the ShapeShift community.
Each of these oneTokens is worth $1 and redeemable at a 1:1 ratio with the market’s second-largest stablecoin, USD Coin (USDC).
Each token also has a unique minting ratio. The oneFOX token, for instance, is collateralized by 80% USDC and 20% FOX tokens, ShapeShift’s governance token. Conversely, the oneUNI token is collateralized by 98% USDC and 2% UNI tokens. These ratios and collateralizations are determined via ICHI’s governance mechanism.
There are currently nine different oneToken-branded dollars within the ICHI ecosystem.
With new funding in hand, the objective is to add to this list.
“Stablecoins are foundational infrastructure for crypto and are experiencing parabolic growth. We expect this to continue in the years ahead as economic activity continues to move on-chain,” a co-founder of Lattice Capital, Micahel Zajko, shared with Decrypt. “Token projects are emerging as sovereign nations with their own governance systems and missions to increase the value of the native asset. ICHI sits at the confluence of these two trends which positions it for significant growth in the years ahead.”
ICHI and decentralized stablecoins
One of the primary value propositions of ICHI is that it removes a project’s reliance on strictly centralized stablecoin providers like USDC and Tether’s USDT.
Both of these projects have faced criticism for either blacklisting certain addresses or a lack of transparency into how their tokens are collateralized. Each of these issues flies in the face of crypto’s core tenets of censorship resistance and transparency.
Decentralized stablecoins such as Maker’s DAI, Terra’s UST, or even one of ICHI’s oneTokens, present a possible alternative.
It's much more difficult to shut down or block transactions made in this variety of stablecoin, since the underlying collateral is a decentralized cryptocurrency (or at least a larger portion of the collateral is decentralized). Additionally, these stablecoins are not managed by a centralized entity, but by a collective of various token holders.
oneToken-branded stablecoins do, however, have a long way to go before they are as abundant as other, more popular competitors. DAI and UST have market caps of $11.2 billion and $9.2 billion respectively, while the largest oneToken stablecoin, oneUNI, commands a market cap of just $11.2 million.