FIP 33: Swap between Balancer DAO and Fei DAO

Proposals
1

Proposal: FIP-33

Status: Last call

Summary

OTC deal where FEI DAO exchange FEI and TRIBE in equal proportion for 200,000 BAL (~US$ 4,400,000) form Balancer DAO.

Motivation

Balancer will play a key role in Fei v2. In the new version, PCV will be managed using a Balancer v2 Investment Pool. This has the potential to add PCV (almost $1B) to the Balancer platform.

As Fei v2 brings significant TVL to Balancer, it would be beneficial for both communities to strengthen the partnership through a Treasury swap.

DAO to DAO partnerships are moats, durable competitive advantages. DeFi composability works better when communities work together. Balancer is a highly respected and innovative project, the perfect fit for Fei Protocol, the main liquidity source for DeFi.

At the same time we diversify PCV by holding BAL, TRIBE will be into the hands of a long-term ecosystem partner.

Moreover, as our core operations will be in Balancer platform, it is important to have some voice in the governance discussion there.

Specification

Fei DAO will deploy an appropriate version of the Badger DAO OTC Contract as the one used in the Index OTC purchase.

200,000 BAL from the Ecosystem Fund would be exchanged for the equivalent USD value of TRIBE and FEI in equal proportions from Fei DAO Treasury, using the 20 day smooth moving average price at the time that voting ends. Price feed will be BAL/USDT (Binance) and TRIBE/FEI (Uni-V2) FEI/ETH (Uni-V2).

Fei DAO will deposit BAL into BAL/WETH 80/20 paired with ETH from the PCV and commits to holding for the long run. The Fei DAO will also be eligible to earn BAL rewards (currently at 22% APR) , which will be further held by Fei and possibly reinvested in the 80/20 BAL/WETH pool. Balancer DAO will be eligible to earn TRIBE rewards by participating in Fei’s incentivized staking programs (Uni v2, Rari, Curve, etc.).

In the context of the long-term partnership, both DAOs will hold the exchanged governance tokens for at least one year.

According to the discussions, this is just the first step and in 3 months, we will submit another proposal to swap more tokens.

8 Likes
2

I am in favor of this. Great to align both protocols together long term.

6 Likes
3

I am massively in favour of this DAO to DAO swap. I would like to see the BAL be swapped solely for TRIBE tokens, so it is a governance token for governance token swap. However, if Balancer would like some FEI then that is great.

Regarding the 80/20 BAL/ETH pool, I believe Balancer is moving away from how LM rewards are currently distributed and towards something that requires the Balancer LP token to be deposited into a staking contract to earn LM rewards. If this is executed before the new Balancer staking contracts are rolled out, this may just mean the BLP tokens get staked at a later date .

Looking at the size of this deal, 200,000 BAL places Fei Protocol inside the Top 50 BAL holders and that is including the community wallet addresses. I actually think we can go larger here. I would like to see Fei Protocol inside the Top 15 token holders. Another 200,000 BAL tokens should do it and given the oracles and DEX liquidity, a bonding curve can be used to achieve this separate to the token swap deal.

On a slight side note: There is a little over 103,000 BAL tokens in the DPI vault. So if there was a proposal come up on the Balancer forum, INDEX holder can vote with their ~103,000 BAL holding.

5 Likes
4

Love this proposal too, also agree with @Matthew_Graham that there is room for more. Maybe we could start with 200k and consider extending this in say 3 to 6 months?

Regarding getting also FEI, the rationale behind it is that the Balancer DAO treasury would have some more stability which can be a big plus in volatile environments like ours.

5 Likes
5

It is a good idea to start with 200k now and add more in 3 months!

3 Likes
6

Totally in favor of this, Balancer is an amazing project backed by an equally amazing team

3 Likes
7

100% agree with @Matthew_Graham’s version of the proposal. Balancer is an important part of DeFi and ensuring FEI has a major role in important projects can only be beneficial for us.

1 Like
8

Great! Moved to last call and added the mention of the new proposal in 3 months to increase the size of swap.

1 Like
9

Snapshot created: Snapshot

10

The swap was successfully executed: Ethereum Token Holdings 0xd51dba7a94e1adea403553a8235c302cebf41a3c information

Great to make this first step to build a long-term partnership between Fei DAO and Balancer DAO!

2 Likes