FIP-40: Fei to participate in potential Rari RGT auction

Proposal: FIP-40
Status: Last Call

Summary

Fei Protocol to backstop RGT auction and purchase between 1-5m FEI worth if auction denominated in FEI

Motivation

Framework has proposed a treasury diversification on Rari Capital here: Proposal for Strategic Treasury Diversification via RGT Public Batch Auction - Rari Governance Forums

Their proposal would be to auction RGT for around $5.5m worth of stablecoins.

Fei Protocol and Rari Capital have an incredible partneship, with FEI being in almost all of the top 10 Fuse pools (#3 being FeiRari with over 100m TVL) and many more.

It would be natural for Rari Capital to want to hold FEI given its decentralized nature, solid backing of over 350% collateralization, and deep integration with Fuse.

Proposal

If the Rari community is excited about the general RGT auction proposal, and extends it to denominate in FEI, then Fei Protocol would contribute in the auction. Specifically:

  • Backstop RGT price at the same value as Framework based on 30 day rolling average
  • Commit to participating with 1m-5m FEI up to some maximum price
  • Participate at 5m FEI
  • Participate at 2.5m FEI
  • Participate at 1m FEI
  • Do not participate

0 voters

5 Likes

The synergies between our protocols are great, and buying RGT will only further solidify this relationship.

Let’s participate for 5 million FEI!

1 Like

I am in favor of this proposal - 5M FEI

2 Likes

Moving to last call! Please share any last feedback before snapshot in ~48h

1 Like

I support this given the strategic partnership between the two protocols.

The meaning of backstop is a bit unclear to me. Do we mean that we would bid in such a way that we would spend all of our committed FEI if the clearing price is lower than the backstop price? If so, we could call it our “minimum price”. It makes sense for the DAO to commit to a maximum price (if the price is above this we win 0) and a minimum price (if the price is lower than this we win 1m-5m FEI) as a function of the 30-day average. But I don’t know enough about Framework to say that we should use the same value that they use.

we should increase our influence and control of Rari at every turn possible, if rari is indeed likely to become host to potentially hundreds of millions of FEI and hub of FEI interest rate subsidies.

After the auction, we could do, as @Eswak suggested, an OTC deal with Rari Capital DAO. We could exchange TRIBE and FEI for RGT as we are doing with Balancer. Rari holding some TRIBE would be interesting to align even more the interests.

3 Likes

Lets see how the auction proposal develops, I think a treasury swap would be a great idea

2 Likes