I have seen lots of ideas on how to resolve the problem we find ourselves in. I will not be reinventing the wheel. I will include, by reference, links to the ideas I agree with - perhaps with little modifications in parameters.
To all long-term TRIBE token holders, I believe the peg problem can be resolved and will make the FEI Protocol stronger in the long term. This situation forces an upstream confrontation of inevitable downstream problems – better we resolve them now. I do not believe we need to implement a new protocol as @fei.saver proposes here
We all agree on the following:
(1) Immediate action needed to achieve and hold peg.
(2) An exit valve is needed flush out FEI selling pressure.
(3) Motivate integration of FEI with other Defi protocols.
(4) Address the precipitously falling TRIBE token price by creating demand/dissuading selling.
(5) Achieve 1 – 4 with minimal depletion of the PCV as possible.
(1) Immediately Achieve and Hold Peg
@Joey outlined our options here:. From this poll by @Eswak, community members see #4 (using the reserves to stabilize the price more directly by selling ETH for FEI) as their favorite option but remember that peg is needed immediately and according to @joey, this option will take 1 to 2 weeks. @joey when do you expect we will begin voting on proposals?
I believe #3 (setting a pre-defined cadence for reweights) is the best option for immediately achieving peg – although it will take many iterations. #3 also makes #1 (forced reweights) unnecessary. It is also the second-best option according to the @Eswak poll and requires “minimal contract change” according to @joey.
(2) Exit Valve for Desperate FEI Sellers
For this, I agree with @federer and incorporate his proposal to “Allow FEI holders to redeem 0.95 worth of $ETH for 1 FEI”. However, I would modify from $0.95 worth of ETH to $0.90 worth of ETH for 1 FEI. Two things, (i) this option is largely for desperate FEI sellers with opportunity costs and immediate need for funds. They have sold their share of the genesis 10% TRIBE allocation and made some money – so this exit channel will result in an approximate wash scenario. (ii) FEI sellers have sold and are selling with penalties of almost 49%. I think desperate FEI sellers will be delighted with a $0.90 worth of $ETH for 1 FEI redemption offer. This is analogous to selling the reserves with a fixed discount or an auction described by @joey although I don’t believe there should be a discount at all.
(3) Motivate Integrations
Capping the burn and mint to 5% will help achieve accuracy between oracles and actual FEI prices – the predictability of which will encourage (if not motivate) integrations. It will also remove the fowl taste of unfairness decried by FEI sellers – and doubly serve the original purpose of Direct Incentives (DI) – which should not be thrown out the window just yet.
(4) Address the Precipitously Falling TRIBE Price
Demand for the TRIBE token can be achieved by doing either or both items below. Note that only an announcement and commitment to these incentives are needed now – the immediate goal remains to achieve and maintain peg.
(i) referencing the proposal of @cozeno – “Possible Secondary Airdrop for pre-swappers”. Caveat here is that the airdrop vests linearly for 6 months beginning 6 months after allocation – so vesting completes after 1 year. Airdropped TRIBE tokens can be from the 40% of TRIBE supply managed by the DAO.
(ii) voting in a ‘yield allocation advantage’ for $TRIBE token holders that maintain token balance in their wallets between days 7 post genesis and a future date - i.e., the beginning of the first PCV deployment for yield. TRIBE token holders that meet this requirement will receive 100% of the first 6 months of yields from the first deployment of the PCV in staking AAVE, Compound, YFI, Bancor, or whatever yield bearing strategy the community votes to deploy the PCV on. For this strategy, it is important that the exact date of the wallet sweep is not known now – the exact date will be proposed retroactively and voted on by the community sometime in the future. Again, the sweep date should fall any date between day-7 post genesis and the beginning of the first PCV deployment. The FOMO on yield allocation will drive demand – or at least dissuade further selling.