With the launch of veFPIS, we asked Frax founder Sam Kazemian his thoughts on FPI and what it means for the Frax ecosystem. Below is the interview with Sam K:

Q.) In the simplest terms, what is FPI? Why is it significant?

A.) FPI is the first decentralized stablecoin to be pegged to a basket of consumer items and aims to be a useful unit of account onchain that's not a national currency unit.

Q.) How does FPI fit in the Frax eco? How does FPIS accrue value?

A.) FPI is the most ambitious part of the Frax ecosystem because we see it as the successor peg to USD stablecoins in the entire crypto industry. The vision is that a couple years into the future FPI will be what a lot of DAOs, users, and projects save their assets in and price costs in. That is as large, if not larger, potential than another dollar pegged stablecoin. FPIS accrues value as the main gov token.

Q.) How do you expect new variables to be added to the CPI peg overtime?

A.) Yes, definitely. We think that the CPI peg weights and items can and will be voted on by veFPIS holders through onchain governance in the long term.

Q.) As FPI increases in circulation, how will yield keep up with targeted inflation over time?

A.) That's the most challenging part of the protocol. We have some unique mechanisms and yield opportunities but overall FPI adoption is easy, the peg is not. Thus, there is a mint cap to FPI that means more FPI cannot be minted past the limit the protocol can keep the CPI peg. Demand is very strong for FPI so at the beginning there needs to be a mint cap.

Q.) How do you plan to decentralize FPI governance overtime?

a.) veFPIS is the primary way governance will take place. There will be onchain votes on the CPI peg and weights similar to a gauge vote but with CPI baskets.

Q.) In the same way FPI is a stablecoin is built on top of FXS/frax ecosystem, is it possible in the future for Stablecoins to be deployed permissionlessly in a similar manner erc-20th tokens are deployed on ETH?

A.) We don't have plans for this and focus on stablecoins that are crucial to the Frax vision which is FRAX, FPI, frxETH, and possibly frxBTC 😉

For more info on veFPIS watch last weeks Frax in Review: