Summary As promised on the last two ShapeShift DAO community calls, this is a proposal to partner with the ICHI community to create $oneFOX, a stable branded dollar backed by $FOX. You must deposit $FOX tokens to mint $oneFOX, a token valued at $1.

Abstract $oneFOX will be the 7th ICHI V2 stable asset, following stable assets created for Filecoin, 1INCH, Uniswap, etc. It never made sense for different communities to govern the different features of money. ICHI makes it possible for every community to have their own everyday currency backed by their scarce crypto.

Motivation More value will be retained within the $FOX economy. Instead of selling $FOX tokens for assets issued by other communities, ShapeShift DAO can use its own asset to conduct business or create dollar-denominated exposure/loans in decentralized finance.

Specification ICHI (conditional on a successful ICHI DAO vote):

• Launches $oneFOX (0x03352D267951E96c6F7235037C5DFD2AB1466232)
• Provides 67k ICHI in rewards to $oneFOX deposits over 3 months ($320k value)

ShapeShift DAO (conditional on this vote and a successful deployment of $oneFOX):

• Funds 50% of the cost of initial ICHI rewards ($160k). ICHI will use this entire amount to mint $oneFOX and hold it for a minimum of 12 months, increasing safety and enabling initial DeFi insurance.
• Loans 1.5M $FOX tokens to the $oneFOX treasury to lower initial minting ratio from 98% to 80%. Users will deposit an estimated additional 1.5M $FOX tokens in the initial minting period as a result of this loan.
• Docs and audits, including one from Quantstamp, are available on ichi.org for those who want a deeper understanding.

Benefits Here are a few benefits of $oneFOX to the $FOX economy:

• $FOX Use Case: You must deposit $FOX to mint $oneFOX.
• ICHI Rewards: Deposits of $oneFOX will earn ICHI rewards.
• -Revenue: 80% of the yield generated by ICHI strategies stays in the $oneFOX treasury which belongs to the $FOX community. 10% may be distributed to applications that leverage $oneFOX. 10% goes to staked ICHI ($xICHI).
• Protocol Locked Liquidity: The $oneFOX treasury will provide liquidity to $oneFOX and $FOX on exchanges such as Uniswap V3.
• Discounts/Interest: $oneFOX holders can vote to allocate treasury towards providing discounts when spending or better interest when saving.

Drawbacks If the $oneFOX treasury’s reserve ratio drops beneath 200%, ICHI’s recommended minimum, the ShapeShift DAO may need to contribute more $FOX, or $oneFOX Governance may need to rebalance $FOX into $USDC. This could happen if:

• The price of $FOX declines severely
• The value of the $oneFOX treasury’s investment positions declines severely
• A large quantity of $oneFOX is redeemed for $USDC in a short period of time

The $oneFOX treasury’s DeFi investment positions may also be subject to token lockup periods or market liquidity risk. As a result, $USDC redemptions may be delayed until a treasury rebalance is possible.

Mitigations Yield on $oneFOX treasury assets, $oneFOX minting ratio adjustments, and $oneFOX redemption fees drive over-collateralization, which reduces the likelihood of the reserve ratio dropping beneath 150% or redemptions being delayed.

$oneFOX Governance

$oneFOX is a token worth $1 that is minted with exactly $1 of value in two parts: part $FOX, part USDC. $oneFOX Governance controls various parameters of the $oneFOX contract and selects the investment strategy for the $oneFOX treasury’s funds. $oneFOX Governance may also upgrade the $oneFOX contract’s code or implement new investment strategies, though these actions require the approval of the ICHI DAO.

Governance within the ICHI system is divided into two sections based on scope of authority:

1. Global (ICHI) Governance - provides boundaries in which local/instance governance can operate. (Read more about ICHI governance here.)
2. $oneFOX Governance - can make adjustments to parameters affecting a single oneToken instance.

The ShapeShift DAO can perform any $oneFOX governance actions directly by passing a proposal, but a 4-of-6 multisignature scheme will be used for day-to-day operations. Two of the signers will be nominated from the ICHI DAO community, and four will be nominated from the ShapeShift DAO community. Here are the initial nominations:

• Joshf (ShapeShift DAO): 0x5b8de63AFdeEdc64eb752623b49fc3A8Bd221245
• Tyler (ShapeShift DAO): 0x71D1567aECb9aDB1BC41f1b91525344d0FAFdF93
• WillyFox (ShapeShift DAO): - 0x1D01A2FefB8883A5cfB8c77B19d9b96794581288
• Mperklin (ShapeShift DAO): 0x72E7b10ed4E45b57E5b97445BC5BA25501E76154
• 37Aces (ICHI DAO): 0x0dd4C0c16Fff6693e169Ef89235Cb92F9D8943EE
• Dhtal (ICHI DAO): 0xaD187f2D2e7957411475f7a66F1Fff273b38cAd5

A ShapeShift DAO proposal and successful vote is required to replace a Shapeshift signer with a new one, to replace an ICHI signer with a Shapeshift signer, or to change the threshold and number of signers. An ICHI DAO vote is required to replace an ICHI signer with a new ICHI signer.

Signing Process A full breakdown of the signing process, permitted transactions, and un-permitted transactions can be found here: https://docs.google.com/document/d/1w1-neGR-WZHhuB38okEMtR2m-kSbcr53tRNSbGyp2gI/edit?usp=sharing

For Launch $oneFOX Against Do Nothing