FEI DAO Investment Policy Statement (IPS)

Proposals
2

Hi @Bruno,

An excellent write up on your points backed by research. I have a few questions:

Risk Tolerance
What made you come to the conclusion of the target TRIBE risk profile of volatility 3M of 5% and Expected Shortfall of 12%? Is this based on a comfortable risk appetite as discussed within your Working Group or is there certain sampling of users who are comfortable with losing over a certain percentage of their portfolio? There is a lack of causality explained in getting to these figures.

Asset Allocation
On a similar note, what made you come to the conclusion of the target desired allocation of assets within a 6 month timeframe (not not longer/shorter)? As experienced with the recent market moves, 6 months is an eternity in the crypto space. Therefore, can you please elaborate whether this time period includes other unmentioned factors such as code development to diversify, waiting for suitable times to enter the market, FIP-6 implementation, etc?

Stablecoins and other Assets
Can you please comment on:

  1. Whether it makes sense to hold small amounts (basket) of other algo stablecoins, subject to your performance criteria to be included;
  2. Whether it makes sense to hold other large-cap DeFi tokens in an indexed form (DPI) or in their constituents; subject to your performance criteria to be included;
  3. Preferred vehicle for asset to be invested in;

Risk Management
To make this clear to users and the community, can you please give an example of one asset that you can apply your methodology on as an example case. You can/should use some of your research from the FIP-6 assets on DAI/USDC.

Implementation
I disagree that by holding indexed tokens we will miss out on governance. Again, I quote the Index Coop model, their governance token can be used for meta-governance, based on the underlying shares and components of DPI, which influences the INDEX token.

Performance and Changes to the model
Can you please comment on how/if based on market conditions and other influencing factors, whether and how the IPS will be modified, and under what criteria will be used to ‘reweight’ the investment portfolio into other assets, if necessary. There appears no consideration on whether the investment policy should respond quickly/slowly to changes in DeFi and the wider cryptosphere.

Again, great work and looking forward to developing this.

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