The idea of diversifying the PCV has been floating around a lot recently. I often read about the proposal of buying other centralised stable coins(USDC etc) to thus ensure the stability of FEI. Of course, that is a valid method and approach when trying to achieve stability and it is important to not be too stubborn about being “purely” decentralised.
However, this approach could be too simple in my opinion. We have to keep in mind that the purpose of the PCV is not only to hold stable coins. We can come up with far more creative approaches. I mean the possibilities are endless.
Some things that come to mind are:
-farming with the PCV
-acquiring large portions of governance tokens in other projects and thus voting FEI into their system with our PCV
-lending with the PCV
etc
For further insight check out what Joey said in this podcast. (Timestamp: 21:00)
So yeah I just wanted to open this topic to see what ideas other people have, I think the PCV is a great tool to strengthen the protocol and it should be used accordingly.
Once the situation has calmed down and things have normalised, I think it would be fantastic to crystallise some of these ideas as proposals.
I’m against keeping PCV in stable coins, especially centralised ones. One possibility is to let FEI achieve peg and see how stable it stays for a period of weeks/months. And if it does, we could convert the PCV into FEI. But that’s in the long run and we do need an alternative for the short term as 100% in ETH for a long time would make me nervous.
On this regard, I’d like to see part of the PCV diversified in Curve 3pool tokens (USDT/USDC/DAI). We can then setup a (3crv, FEI) metapool pool using the Curve pool factory. From there, meeting the listing criteria to be included on their main interface should be pretty straightforward (no need to buy CRV governance tokens) :
A secondary market without direct incentives and with low slippage will also help to stay closer to the peg.
Another thing I’d like to see is, once the protocol generates yields, use that yield to buy PUT options to get protection in case ETH value crashes.
Wonderful ideas. See, this is more concrete(CRV) and we could turn it into a proposal, as we know all the parameters and we know that the PCV would be large enough to think about such a step.
Thank you for your input.
(Also this is just my personal opinion and (!)not financial advice(!), but I think CRV is undervalued)
Good ideas for the future.
Now it is necessary not to lose
the cost of PCV, first be sure to transfer PCV 50% to stablecoins, and then you can make plans.
Both the FEI/3pool(DAI,USDT,USDC) and TRIBE 3pool(DAI,USDT,USDC pools already exist on crv.finance, they just need liquidity added. So they should do that with the PCV.
I like the idea of parking a portion of PCV into Lido to stake ETH. The protocol could use those rewards similar to how Anchor utilizes them to create its own DeFi lending rate.
are we going to use the earning from PCV to buy back FEI and burn it?
if not, is this going to help FEI back to peg?
buying other protocol governance token to vote FEI into other defi platform, first FEI need to be staying within 5% of its peg target, 90% of the time. I think this is something we can consider later when FEI peg to its target value, but not now. we have more serious issue to resolve now.
Yes, that is indeed true. There are more serious issues right now, which is why this is in the “idea”-section of this discourse. It is to collect ideas and propose them in the future when things have calmed down.
Strongly agree with putting the PCV to work. Suggest we all try to agree on the following first:
Constraint: Maintain the portion of the PCV allocable to FEI in stablecoins (so that FEI is always collateralized 1:1).
These stablecoins can sit in a vault or, ideally, be sent to CRV, etc.
Objective function: “Maximize the value” of the PCV subject to this constraint.
This means we can use the stablecoins to farm, we can keep the “overcollateralized amount” in ETH, etc.
It just means we never bare the risk that FEI will be undercollateralized, which guarantees that we “should” have some edge over other coins that don’t have extra PCV (budget) to seek integrations, pay staking yields, etc.
What’s doubly nice here is that the returns can compound on the ENTIRE PCV - which is greater than the number of outstanding FEI.
This means that we can actually offer holders of FEI returns that are greater than they could get if they bought DAI/USDT/etc. and staked them in the pool themselves.
Hence they should buy FEI (to get paid) instead.
This also has the following two spectacular implications:
Team can drive usage of FEI thru direct cash (e.g., staking) incentives that exceed any other merely collateralized stablecoin. Why wouldn’t folks swarm to FEI … for cash?
Team can cream skim the excess returns over market to build a warchest for the Team and TRIBE to further grow the ecosystem
The only reason this is possible is because the folks who exited burned FEI and the price of ETH has increased.
What does everyone think?
p.s., I’d also happily sink the time into trying to make this work
I really like the idea of putting other stable coins to work for the PCV, instead of just having them sit “in the PCV” for safety. As other users previously said, something like CRV could be great, not only to put in other stable coins for the PCV, but also for the existing “empty” https://crv.finance/liquidity#pool=FEI3CRV-f-2 pool.
