Fei Protocol
Summary
Fei Protocol was an algorithmic stablecoin project that launched in April 2021 with the largest DeFi genesis event in history at the time, raising approximately $1.3 billion in ETH, but whose novel 'direct incentive' peg mechanism immediately failed and trapped early participants with severe withdrawal penalties. After merging with Rari Capital to form Tribe DAO in December 2021, the combined protocol suffered an $80 million reentrancy exploit in April 2022 that precipitated a contentious governance crisis and the eventual dissolution of the DAO. Fei Labs and Rari Capital separately faced legal and regulatory consequences, including a class action securities settlement of $17.85 million and SEC charges against Rari Capital and its founders.
Connected Entities
1 entities · 10 linked investigations- + 4 more
Timeline(14 events)
2021-03-08
Fei Labs announces $19 million seed round led by Andreessen Horowitz, with participation from Framework Ventures, Coinbase Ventures, and Naval Ravikant.
CoinDesk2021-03-31
Fei Protocol Token Genesis Event opens. Participants contribute ETH to receive FEI stablecoins and TRIBE governance tokens.
CoinTelegraph2021-04-03
Genesis Event closes having collected approximately 639,000 ETH (~$1.3 billion), the largest DeFi genesis at the time. FEI immediately loses its $1 peg.
Decrypt2021-04-07
FEI peg reaches an all-time low of approximately $0.71. A vulnerability in the direct incentive rebate mechanism is discovered and minting rewards are disabled, trapping users.
Halborn2021-05-08
Rari Capital suffers its first major hack: approximately $10.6–$15 million is drained from its Ethereum pool via a manipulation of Alpha Finance's ibETH token valuation.
Halborn2021-10-01
Fei Protocol launches V2, removing the flawed direct incentive mechanism and enabling FEI redemption at $1.00 against PCV reserves.
Crypto Briefing2021-11-16
Fei co-founder Joey Santoro and Rari co-founder Jai Bhavnani jointly propose a merger of Fei Protocol and Rari Capital into Tribe DAO.
Blockworks2021-12-21
Tribe DAO merger formally approved: 90% of TRIBE holders and 93% of RGT holders vote in favor. Combined assets estimated at over $2 billion.
CoinDesk2022-04-30
Rari Capital Fuse pools exploited via reentrancy attack; approximately $79.3 million (~$80 million) drained. Fei Protocol pauses all Fuse borrowing and offers attacker a $10 million bounty.
CoinDesk2022-05-01
Non-binding Snapshot vote passes with ~75% approval to use Tribe DAO PCV to fully repay Fuse hack victims. Stolen funds begin flowing through Tornado Cash.
CoinTelegraph2022-08-19
Fei Labs submits formal proposal to wind down Tribe DAO, citing macro conditions and the Fuse hack.
Protos2022-09-19
Tribe DAO on-chain vote records 99% approval for full reimbursement of Fuse hack victims. Execution occurs September 20: 26.61 million DAI and 12.68 million FEI distributed.
Decrypt2023-10-27
Superior Court of California, San Francisco County, grants final approval of $17.85 million class action settlement over alleged sale of unregistered FEI and TRIBE securities during the Genesis Event.
PR Newswire2024-09-18
SEC announces settled charges against Rari Capital, co-founders Jai Bhavnani, Jack Lipstone, and David Lucid, and successor entity Rari Capital Infrastructure LLC for misleading investors and operating as unregistered brokers. Co-founders receive five-year officer-and-director bars.
SEC.govDecision Log
- hash: 4KCEQee1hnDp1hRdwPmmAKRbRv73rnNNNWEJjgHewB9C
This investigation is cryptographically anchored to the Solana blockchain and source URLs are archived via the Internet Archive.
model: claude-sonnet-4-5
generated: 5/30/2026, 12:57:49 PM
last updated: 5/30/2026, 12:57:57 PM
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