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Last updated: Dec 19, 2023
HandleFi is a multichain DeFi protocol that offers various fiat-pegged stablecoins available to borrow against cryptocurrency collateral. The platform’s stablecoins are issued in the form of fxTokens, currently available on Ethereum, Arbitrum, and Polygon.
The developers of the project note that even though there are trillions of daily trades made on a worldwide foreign exchange market, the global DeFi industry still lacks localized stablecoin solutions. HandleFi aims to change USD-peg domination with its set of multi-currency stablecoins.
The platform was launched in March 2021 and got support from some notable investors, traders, and operators such as Distributed Global, Lemniscap, DACM, CMS Holdings, OneBlock, Orthogonal Trading, Apollo Capital, Hardfork Ventures, and others.
Currently, fxTokens come in the form of various cryptocurrencies soft pegged to their fiat analogs such as Australian Dollar (fxAUD), British Pound (fxGBP), Chinese Renminbi (fxCNY), Eurodollar (fxEUR), Phillipine Peso (fxPHP), Singapore Dollar (fxSGD), and Swiss Franc (fxCHF).
As with any other collateral-backed debt-issuance platform, HandleFi maintains the peg for minted fxTokens via a liquidation process. In cases when the collateral provided falls in price below its minimum c-Ratio a user may redeem their collateral at a 1:1 rate. The liquidation process starts when a vault's c-Ratio falls below its liquidation trigger. In this case, the protocol uses its fxKeeper pools that contain fxTokens staked by the community to execute liquidation promptly and at the lowest loss possible, so that the fxToken’s holders are ensured that only required amounts of collateral are sold to repay the debt.
HandleFi plans to move towards algorithmically controlled fee and parameter mechanics, while initially these parameters are controlled by the DAO whose members are called troopers.
The HandleFi app is web-based and allows users to operate all the main features. It is possible to convert ETH into FOREX or any kind of supported stablecoins or simply mint fxTokens in exchange for cryptocurrency collateral. And vice versa, users may burn previously minted fxTokens to redeem their collateral back at a 1:1 ratio. The remaining option allows holders to stake their FOREX or fxTokens to earn protocol rewards.
HandleFi also introduces its own bridge providing a way for users to move their FOREX and fxTokens across Ethereum, Arbitrum, and Polygon, with more chains to be added in the future.
HandleFi wallet support includes MetaMask and any other crypto wallet integrating the WalletConnect Protocol.
FOREX is the native governance token on the HandleFi platform. It is used for rewards to the platform's users and will empower holders to participate in the governance of the protocol. The total supply of FOREX is limited to 420 million tokens.
After the FOREX staking feature went live, a gFOREX form was introduced. gFOREX is a time-locked form of the governance token generating a generous APR for its holders - at a level of 37% in December 2021.
The HandleFi team is fully anonymous and discloses no details on its core developers neither on its whitepaper nor on its website and social profiles. HandleFi audits can be found in the protocol dashboard on this webpage.
Similar to Fei Protocol, HandleFi features a concept of protocol-controlled value and deploys liquidity acquired from users into external pools to amplify the community’s gains. For now, such external exchanges are Uniswap and Sushiswap on Arbitrum and Curve on the Ethereum blockchain.
It is expected that other types of collateral will be added to HandleFi soon, starting with wBTC and DAI. With the protocol becoming more mature, it will expand the supported collateral to project’s assets like CRV and interest-bearing assets.
The developers also plan to add fiat onramp options for users to easily onboard the protocol.