I posted the below on discord, but popping it here for visibility:
I think this is rewarding 0% preswappers. Why? Well we have to ask why is FEI trading at 0.85 (after burn or on secondary markets)?
- Well if you bought 13FEI for $13, you also got 1 TRIBE free.
- If you sold that for $2 you’re now down $11 but holding 13 FEI
- So what do you need the price to be to break even? 0.85…
Anything >0.85 rewards 0% pre-swappers (admittedly $2 per tribe is somewhat of an average of the last few days, but 2.5 or 1.5 doesn’t change the math enough to make 0.95 or 0.90 justifiable)
To put it another way, let’s say I’m a whale that wants to make a quick buck, here’s what I’d have done:
- I buy 130m FEI in genesis at 0% preswap.
- Post genesis I sell my airdropped 10million tribe for an average of $2.
- Ok now I have $20m and 130m FEI.
- Now I sell that FEI for 0.95 (the current proposal) giving me $123.5m.
I just made a cool $13.5m (10% ROI in a matter of days). Where is that money coming from? Well the PCV is handing it out to people who don’t believe int he project.
This is just reweighting isn’t it? When a re-weight happens, PCV ETH is spend to stabilize the price.