EDIT: 4-24 adding the DAO timeline and implementation details for the contracts
This proposal aims to unify FEI and TRIBE holders around the common goal of FEI’s long-term stability and success by:
- Offering $0.95 redemption of FEI using 300k ETH from PCV delivered in batches to the ReserveStabilizer contract
- Doubling staking rewards by allocating 100 million TRIBE (1/4 of the Fei DAO Treasury) to the existing FEI-TRIBE staking pool, linearly decreasing over two years
This proposal is designed to reduce the post-Genesis sell pressure on FEI. The purpose is to move FEI closer to the peg while the fixes to the direct incentives mechanism are audited. The current level of sell pressure should be addressed to enhance stability, while the protocol has a healthy amount of PCV in its current state. TRIBE voting to bring FEI up to $0.95 will restore confidence in FEI’s peg and the community behind it.
This proposal strikes a balance between the effective exchange rate of the “simplified undo button” proposal and $1 redemption for FEI. Reweights can operate more efficiently with a smaller gap to close in the subsequent proposal.
The allocation of an additional 100 million TRIBE from the DAO Treasury to staking rewards is an essential part of this proposal with dual objectives. First, it offers TRIBE holders who believe in the long-term potential of the project a way to significantly increase their stake in it. Second, it generates demand for FEI, which will help support the peg and retain PCV.
The core team will vote for this proposal. It balances the interests of FEI and TRIBE holders, while being simple enough to implement in a safe and expedient manner. We are finalizing the code and will have it reviewed by multiple security researchers and smart contract engineers during the snapshot vote.
- Reduce sell pressure on FEI
- Allows room for mechanisms to operate with a floor of $0.95
- Creates demand for FEI through staking rewards
- Incentivizes TRIBE holders for supporting FEI-TRIBE liquidity
- Equal opportunity of exit price compared to reweight-based peg restoration
- Increases the collateralization ratio
After FIP-2 is voted on, the plan is to reinstate the incentives system with the following steps:
- Re-enable reweights with a fixed cadence (e.g. every 4 hours)
- Complete the audit on proposed fixes for direct incentives, including a vote on new DI parameters, and then reinstate them
- Deep integration of FEI into DeFi and diversification of PCV by deploying it productively to support the peg
After incentives are in place, we are excited about the possibilities that are available through generalized PCV deployment. A sufficient amount will remain as liquidity, while the DAO could allocate the rest to things like financing interest rates on lending markets and deploying to yield platforms to increase the PCV.
- Snapshot voting will start on Wednesday, April 21 at 4pm PST, and last for 48 hours.
- DAO submission Monday, April 26 at 12pm PST lasting for 3333 blocks (~12 hours)
- DAO voting begins after timelock lasting for 10000 blocks (~36 hours)
- If passed, timelock for implementation begins Wednesday, April 28 around 12pm PST lasting 24 hours
- Redemption is live around 12pm PST Thursday, April 29
- Increased staking rewards begin Monday, May 3
The 3 contracts on this branch FIP-2 by Joeysantoro · Pull Request #95 · fei-protocol/fei-protocol-core · GitHub will be deployed to mainnet before the DAO vote.
Exchanges FEI for ETH at $0.95
It is granted the Burner role so it can exchange FEI without a separate approval transaction
Sends 5k ETH per hour to EthReserveStabilizer
If the EthReserveStabilizer has at least 5k ETH it will not drip. This helps prevent against oracle attacks by not leaving too much ETH in the stabilizer
When the FeiRewardsDistributor receives new TRIBE, it allocates an amount proportional to all prior drips to the very first drip, frontloading the distribution. If the 100 million TRIBE are sent directly to the distributor then the following week would have 6x rewards (1x base rewards + 100% boost x 5 drips).
To smoothen out the front-loading, the TribeDripper sends the 100 million TRIBE to the FeiRewardsDistributor over 3 weeks using 47m, 31m, and 22m TRIBE respectively.
Week 1: 1x base rewards + 47% boost x 5 drips = ~3.35x
Week 2: 1.47x base rewards + 31% x 6 drips = ~3.33x
Week 3: 1.78x base rewards + 22% x 7 drips = ~3.32x
Week 4+: 2x base rewards