Rari and Fei, a love story…

Today the Rari and Fei merger passed temperature checks on both sides. I figured it’s only natural for me to present my vision for the future of the merge with you all, so that you can be as excited as I am about the grand vision for the Tribe (= Fei + Rari).

Rari Capital

The first step is zooming out and understanding the goals of these protocols independently. Rari’s goal is to truly make any asset usable as collateral and make any asset in the entire world work for you. The Rari protocol allows you to earn yield and borrow tokens that may not be widely available, that truly provides the financial freedom our world needs. There should be no more credit scores, no more banks — Rari should be the fuel that enables the next generation digital economy to run.

Fei

On the other hand, Fei is set on a mission to provide a superior alternative to the basis of the entire world: money. At its core, Fei Protocol’s goal is to create a stablecoin that is completely decentralized, unshackling us from the constraints of the economic regimes of our past. Due to Fei’s organic infrastructure, their protocol can symbiotically support and nurture new DeFi primitives such as providing liquidity to infant Fuse pools.

Fei + Rari

Together, Rari and Fei will become an empire, truly accelerating the trajectory of one another. The chief benefits of such a merge are the following: powerful network effects, supercharged brainpower and strong protocol synergies.

Through the creation of isolated pools that Fuse provides the building blocks for, liquidity is undoubtedly a top priority. This is where Fei has been able to step in. The Fei DAO has minted millions of Fei into various Fuse pools, resolving previous liquidity crises. New Fuse pools often do not provide borrowing power on day 1 as there are no incentives for lenders. The Fei DAO solves this chicken and egg issue by minting stablecoins and benefitting from the lending interest rates. On the other hand, Fei boasts a superior mechanism for stablecoins, however the utility and actual usage of stablecoins will be the defining characteristic of the winner in the space. Fuse has been able to provide a strong foundation for Fei to bootstrap real usage — beyond just liquidity mining.

(i) Network Effects

In the medium term, we can blitzscale on each other’s behalf. We can take an extremely calculated approach to deploying on Layer 2’s and king-make each other. A close collaboration results in Fei being able to directly mint onto any of Fuse’s deployments with ease and at scale. We will spur Fei to become the dominant stablecoin and Fuse to become the dominant lending and borrowing platform.

This merge will transcend merely winning on Layer 2’s and introduce even cooler products that we can build on Layer 1. There are tons of new ideas in the pipeline. Need liquidity for your DAO asset? Take advantage of what we are working on with a joint collaboration on the Fei Boost product (more on this coming soon). In verticalizing the DeFi stack, we will create a significant moat around our products that become impossible to compete with.

We are truly stronger together.

(ii) Supercharged Contributors

Such a powerful collaboration is unable to be achieved through strategic treasury diversification or by simply staying casual partners. By going all in with one another, we can enable unprecedented levels of collaboration. The sheer creativity and development that will emerge from this joint collaboration will go above and beyond each individual team. Our efforts will have sincere impacts on real people across the world.

The sets of contributors — from both teams — cannot be overlooked. The contributors of Rari Capital are the absolute A-team and over the past few months, I’ve realized that the Fei team is a lot like ours. Both groups are fundamentally creative and synergistic teams.

(iii) Protocol Synergy

Lastly, the intersection of Fei and Rari promises protocol synergy. In the short term, this means peer-reviewed code by the smartest people and awesome product rollouts. In the long term, it means that you have two distinct groups, working for a decentralized protocol towards serving financial equality. I am unsure what products will come out of this in five years or even what they will look like, but — given the unparalleled respect that I have for both teams — what I do know is that it will be groundbreaking.

This is only the beginning: the pursuit of verticalizing DeFi within the Tribe stack doesn’t end with lending and borrowing. What happens when an AMM joins? A fixed interest rate protocol? We can offer superior services across the board because of the aforementioned protocol synergy and tight collaboration that these products will have. In no way will we stop the composability elements of either platform or prevent other partners, but we intend on leaning into our own family to build the best products possible. This will also serve as a moat around these products. Neither liquidity nor code themselves serve as moats. However, an entire DeFi stack built of stablecoins, liquidity, lending and borrowing, kickass teams and so much more — that is a powerful, unforkable moat.

Looking Ahead

To me, this is the start of something really powerful. If executed properly, we know we are capable of building DeFi in the most efficient and effective way possible while delivering on the promises of financial equality. The emergence of FeiRari (see, even the name works) will enable us all to reimagine the way that we as humans conceptualize and utilize value itself. This product lineup will scale to onboard all value within the platform in the most seamless and beautiful way possible.

I know that this partnership was announced with very few long-term roadmaps outlined, yet we sincerely hope that by reading this our communities will come to understand that this is a highly calculated move; FeiRari will enable us to build some seriously cool shit as we usher in the next generation of DeFi, and, ultimately, empower us to make a difference for humanity as a whole.

what if…building @raricapital

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Jai Bhavnani

Jai Bhavnani

what if…building @raricapital

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