We should be pursuing more framework based approaches for making decisions about PCV, TRIBE rewards, and FEI deployments so we can streamline governance processes. @arcology brought up a similar point in Discord.
This post focuses on FEI deployments specific to lending platforms including Rari Fuse, CREAM, Sushiswap Kashi, and Aave.
I think we should aim for a few objectives with lending FEI deployments:
- Bootstrapping markets - without an original source of FEI to borrow, markets cannot have borrowers and can’t have the APY to generate yield.
- Partnership - being able to easily bootstrap USD liquidity for leverage in a market is a strong value prop for potential partners (for example the Olympus pool party integration)
- Visibility - by being in many markets with high liquidity, people see and use FEI in diverse places.
- Earning yield for PCV - by earning FEI back to the protocol, we improve the collateralization and net PCV equity
Sizing for FEI deployments should be scoped to the maturity of the market.
We currently have 10M FEI lent out on FeiRari. Which we consider a medium maturity market.
I propose the following framework:
|Medium||5-10m||FeiRari Fuse, C.R.E.A.M|
|Low||1-2.5m||Fuse and Kashi partnerships, e.g. Olympus|
This framework is somewhat subjective, but it will allow us to move faster on these integrations as we assess the market demand for FEI liquidity across various platforms and userbases.
We should also aim to cap the size of overall lent out FEI, to prevent a Soros attack (borrowing and shorting FEI to drain protocol reserves). I propose a soft limit of 10% of PCV value to be authorized under this framework.
If approved by the community, we can move to make a single combined DAO vote for:
- 2.5M Kashi FEI-ETH
- 2.5M Kashi FEI-TRIBE
- 5M C.R.E.A.M FEI
- 1.33M Olympus PoolParty FEI
And make future DAO votes based on this framework without explicitly snapshotting each integration. For example future Kashi pairs and Fuse pools with partner protocols can get 1M FEI to bootstrap liquidity.
- I support this framework, including other projects not referenced
- I support this framework, only for projects listed
- I do not support this framework