FIP-38 Tokemak TRIBE reactor / Treasury Swap

Proposal: FIP-38
Status: Last Call

Tokemak aims to create sustainable DeFi liquidity and capital efficient markets through a convenient decentralized market making protocol. Fei Protocol is uniquely positioned to be an important source of liquidity for DeFi, and should collaborate with innovative protocols building to take DeFi to the next level.

A TRIBE reactor on Tokemak will improve liquidity for TRIBE trading pairs across trading venues and open up additional opportunities to leverage Tokemak with the aim of including FEI as a base asset when the Toke Community diversifies from centralized stablecoin base assets.

To initialize a TRIBE reactor, Tokemak requires an operational reserve of TRIBE to efficiently deploy TRIBE liquidity to trading venues (Uniswap, SushiSwap, 0x, Balancer) and make TRIBE LPs on Tokemak benefit from IL mitigation. This can be structured as follows:

The Fei DAO to make 3-5M USD in TRIBE available to the Tokemak reactor reserve by proceeding with a DAO-to-DAO trade for 3-5M USD in TOKE:

  • This collateral would allow Tokemak to source an initial 18M USD worth of liquidity (9M USD of TRIBE + equivalent 9M USD of ETH) [Tokemak guardrails are set to deploy 3x the reserve and scale up overtime]

  • The acquired TOKE would make the Fei DAO a powerful Liquidity Director (can get more TRIBE-ETH liquidity)

  • Generalized liquidity can be directed across the ecosystem, ensuring best prices and minimal slippage for TRIBE trading

  • Opportunity for both TRIBE LPs and the Fei DAO to earn additional rewards

  • Initiating a reactor will also result in additional ways for the DAO to leverage Tokemak, such as single-asset staking with tTRIBE staking. This will effectively roll pool 1 and 2 into one, resulting in multiple benefits:

    • Simplified process to provide liquidity (effectively single-asset staking) and low risk should increase the willingness of especially less sophisticated holders to participate in LP
    • Users that were previously single-asset staking now become LPs, further increasing TRIBE liquidity across DeFi
    • TRIBE, as the tTRIBE holder, would be the recipient of a sizable amount of TOKE rewards, which could be either used to further increase LD power, or to supplement pool rewards
    • TRIBE rewards could be lowered as LPs benefit from IL mitigation and/or rewards are supplemented by additional TOKE rewards
  • In favor for 5M or higher USD
  • In favor for 4M USD
  • In favor for 3M or lower USD
  • Not in favor of Tokemak reactor

0 voters

1 Like

I assume the reactor will be available for public deposit?

1 Like

Yup exactly. We can consider supplying extra as a DAO if there is demand for that

why not remove 5M LP from FEI lab on UNIV2 ?
TRIBE IDO financing should be used for FEI and TRIBE operations, right?

1 Like

Great question! Fei Labs funds are used to fund Fei Labs operations. This treasury swap would belong exclusively to the DAO, so the funds should come from the DAO.

1 Like

Support the proposal, and hope for better governance:

FEI Labs operations should focus on the interests of TRIBE holders, including but not limited to the operations of FEI and TRIBE, and make full use of IDO’s financing (FEI lab LP on uniV2).

FEI DAO is an autonomous organization of tribe holders. In phase 0, FEI lab is the main decision maker. In phase 1, maybe FEI v2 runs for 1 year, FEI DAO can establish a more complete governance structure and rules of procedure, and FEI even more Decentralized, more powerful.

1 Like

Interesting ways to deploy TRIBE in the Tokemak ecosystem, as well as additional ways for single-sided TRIBE deposit/staking. Curious on how the community here feels towards double-reward pools and more rewards in general, or more governance power in deploying TOKE to incentivize liquidity pairs of FEI DAO’s choosing. I would be in favor of strategies for the DAO to accumulate more TOKE so that it can remain flexible in deploying the 2 above-mentioned TRIBE-based strategies in parallel.

We can vote to supply additional TRIBE to the reactor for example and earn TOKE rewards. I also think we should deploy some ETH to Tokemak

1 Like

I am huge fan of this idea. :slight_smile:

If Fei is to purse a strategy like the TOKE strategy, then we should try build a large position. Buy a commanding position and then farm to continually build more ownership. The allocation is very small, the gains are oversized, so this investment has strong asymmetric returns. Cornering the distribution of key project’s tokens is a strategy that will only strengthen the value of the TRIBE token long term. Metagovernance is the most unvalued influence in DeFi.

1 Like

ETH deposits are currently yielding around 11% APR in TOKE on Tokemak with single sided deposits and over 200% on TOKE/ETH LP positions.

I think in addition to the treasury swap we should consider a TVL commitment of between 5-10k ETH as a single sided deposit.

  • more than 10k ETH deposit to tokemak
  • 10k ETH deposit to tokemak
  • 5k ETH deposit to tokemak
  • No ETH deposit to tokemak

0 voters

11% is pretty good on single-sided, but since we’re gonna have a large position in TOKE as part of the trade, I’d recommend placing all of our newly bought TOKE in LP with ETH. Additional ETH should be added single sided as well. Opportunities like this are quite rare.

1 Like

I’d like to see if the community would prefer TOKE-ETH yield to just ETH, as it has far higher APR and we’re already committing to purchase TOKE.

  • Only single-sided ETH deposit (11% APR)
  • Use TOKE and ETH for TOKE-ETH LP (200%+ APR)
  • Mixed deposit: Keep 50% TOKE as single asset, TOKE-ETH for the rest, deposit remaining ETH in single asset

0 voters

If the Tribe / Tokemak partnership can improve liquidity for TRIBE trading pairs without having to rely on costly yield farming, would we revisit Tribe yield farming rewards allocation? For example, Alchemix has adjusted their reward emissions since placing in Tokemak’s top 5 for the CORE event. Tribe could reallocate yield farm rewards to incentivize something else.

Snapshot posted! Snapshot

We can definitely revisit, although tbf the yield farming is more of a token distribution/partnership tool for Fei protocol in my opinion. We could PCV any of these tokens and halt all rewards, but this would be very contentious