FIP-51: Fei <> Rari: Token Merge

There is a lot of good conversation here, and I am a bit perplexed that the compensation conversation takes place after two weeks of work on a proposal not even originally proposed by GFX, and I think it overshadows crucial details about the proposed agreement terms. I would suggest moving the compensation request conversation to a separate thread, but I will share my thoughts here for visibility. The ongoing discussion about the Tribal Force would be better suited for this discussion if the plan was for long-term contributions to the Tribe DAO, which would be a big win for the Tribe community, as GFX has a strong track record of successful contributions to other DAOs.

It is great that GFX has increased its presence to provide its services to our communities in this exciting time. However, I think the request for 3M TRIBE is excessive (as many have stated). Furthermore, M&A is an area in DeFi where we may not need rent-seeking intermediaries / advisors.

This engagement sets the stage for future Tribe DAO relationships, and should not be taken lightly.

As it relates to costs, I believe this proposal and work rendered are more in line with how we pay for audit work, which includes code review and final report writing. GFX mentioned their team worked for two weeks on this proposal (part-time?) and given current audit rates ranging from 15k-24k per week, this is what I would suggest to be a generous range for compensation.

The post is also unclear if GFX plans to provide business consultancy or technical execution team. If it’s for business consultancy, the proposal shows a lack of understanding of our v2 and also omits important details, such as vesting schedules and retention policy for DAO employees. It would also be helpful to understand how GFX came to the conclusion which blocks were selected for pricing. If the plan is to be the technical execution team, it is in the best interest of the Tribe DAO to put the work out to RFP (as mentioned already) to other reputable devs, as well as to require accountability if there are execution issues.

In the post on the Tribal Force thread, it would be great if the GFX team could introduce itself (like our other contributors), including who your seed investors are, and the added benefits that GFX could bring to the DAO and the governance process. It would be helpful to know how much the company would commit to the DAO per week, and then to request a TRIBE vesting plan to reflect continued service with monthly reviews by the community and a clawback if either party decides to terminate the relationship.

Given that GFX is requesting to be paid in TRIBE for its services before the merger, this poses a moral hazard, as there could be an incentive to value TRIBE higher than RGT unfairly. As such, the work for this proposal should be paid out in FEI to ensure that GFX is a credibly neutral third party. If GFX wants to join the Tribal Force, they can join the discussion and apply, and current conversation suggests payouts in 50% FEI and 50% TRIBE.


Agreed. We should only be paying out advisors to the merge in FEI as payouts in TRIBE create perverse incentives.

Agreed. We should only be paying out advisors to the merge in FEI as payouts in TRIBE create perverse incentives.

hard disagree here

advisors need to be incentive aligned in the long term. paying in FEI or paying without vesting removes incentive to maximize long term health the of the protocol. any advisor should not merely want the merge to go through, they must also want the merged DAO to thrive to the greatest extent possible

paying out in TRIBE with vesting is the only way to do it, because TRIBE will be the token of the merged DAO

I agree with lots of the other points made by Bri. having GFX as a long term partner seems extremely beneficial to Fei. but if the payout to GFX entails some form of partnership that should be detailed in the terms


Hey all,

I’m a core contributor to Rari Capital and am sharing my thoughts on the GFX compensation and structure of a long term agreement that aligns incentives correctly.

I greatly value GFX and its team and think they could be a powerful resource in the potential future of the Fei-Rari DAO and would love to strike an agreement that all three parties are happy with. My issue is that discussing a long term agreement within the context of this merger just doesn’t work as there are numerous issues and potential moral hazards as outlined by many people in the forums.

My solution would be to compensate GFX in Fei for their help in fostering the merger with a commitment to revisit a long term relationship between GFX and the new DAO governed by Tribe. These discussions are more fit for their own governance proposal. An isolated discussion and vote will likely lead to a deal that both sides prefer and better aligns incentives. A successful merger could demonstrate GFX’s capabilities of fostering healthy governance discourse as well as their technical skillset. It could set the stage for what future services they could provide to the new DAO.

I will be cross posting this on the Rari Capital forums as well

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GFX are not advisors at all in this context. They are consultants full stop and in the context of this merge, the fee they are being paid in FEI will help them remain neutral to both sides.

Them being paid and having their reputation at stake is enough of an incentive to create a structure that allows the newly merged DAO to thrive for the long term. If their ideas work well once implemented, other DAO’s looking to merge will go to them in the future for similar advice and their business will do well. Conversely, if things do not work with their proposed structure, other DAO’s will not engage them.

Trying to mix them as a consultant and advisor at the same time creates moral hazard that we can easily avoid by just paying them in cash.

Hopefully things go well and we want to partner with them for the long term, but that should be a separate proposal and conversation that is outside of the scope of their involvement in the merge. The conversation on a longer term engagement should happen after the merge, not before or during.

substitute everything I said about “advisor” for the word “consultant”. the argument remains the same. maximize motivation to thrive in the long term

hi Jack. I like your idea about separating out the long term partnership into a separate proposal. this merge can serve as a first step, and it’s complicated enough on its own without also planning out an important partnership

I think it’s very important for the merger to be designed with maximum long term incentive alignment (i.e. paying with vested TRIBE) for the reasons I stated above. but if the rari folks prefer flat payment I’d be willing to concede on this point

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make sense. Actually,I think your conclusion should be made by gfx research, but they have not calculated part of deal seriously. So i am not sure 3.5m dollar is suitable.
you know. it will be paid by FEI separately

Here are our answers to several questions we have seen over the last 24 hours. Please continue to post comments/questions/concerns, and we’ll do our best to answer them.

Q1: How were pricing terms decided?

A1: GFX is acting in the capacity of a neutral facilitator, which means helping Tribe and Rari achieve their goals. We focus on the how and not the what. GFX does not have a position on valuations or pricing and did not lead discussions about what an appropriate valuation should be.

Q2: What happens to tokens that are vesting in each protocol?

A2: RGT that can be moved may be exchanged in the same way that any other RGT can. There is no effect on TRIBE vesting schedules or quantities.

Q3: How much is Rari’s debt that Tribe will assume?

A3: There are currently around 11.6 million REPT-b tokens. Rari has in the past committed to repaying these at a total value of around 11.6 million DAI.

Q4: Why is GFX requesting payment in TRIBE rather than FEI?

A4: Payment in TRIBE aligns GFX’s interests with the long-term health of the new, combined protocol. Requesting payment in TRIBE rather than FEI demonstrates GFX’s firm belief that we support the protocol rain or shine. If the community would prefer us to be paid in FEI, we are fine transitioning to that.

Q5: Does Section XIII.A.2 prohibit the use of the TRIBE backstop?

A5: It should not, and we will make that clear in a revision.


In our excitement to share our draft Rari-Fei merger agreement yesterday, we failed to communicate all of the efforts that went into developing the details within the document, engineering the smart contracts, governance proposals, and simulations/testing in 13 days – all with a national holiday in the middle – to produce a workable roadmap as expeditiously as possible.

The GFX team became hands-on by the 17th when we wrote the merger agreement’s initial (rough) draft. Our goal was to ask the hard questions, assist the Tribe and Rari parties in answering them, and build a framework for a DAO-to-DAO merger. Over the last two weeks, we have fielded input from the Tribe & Rari teams, closely monitored the community’s comments, consulted with the Reverie & Llama teams, and did the heavy lifting of consulting with DeFi knowledgeable lawyers (hard to come by).

This DAO-to-DAO merger is a first of its kind, and the GFX team has been put to the test to develop a neutral agreement that supports both communities’ needs. With our team’s professional experience in protocol governance, engineering, and finance, we have rapidly developed a robust and detailed proposal for the communities to consider.

We paused development efforts on our core products in order to prioritize and build the best possible proposal with no precedent to use as reference – in short, we hustled hard to put the needs of Tribe and Rari ahead of our own.

The PegExchanger and Ragequit contracts, as well as the two governance proposals to perform the merger and their accompanying tests/simulations, have already been developed. On Monday, a Code4Rena contest kicked off to verify our work.

As for the structure of our compensation, we are interested in being long-term community members and are willing to receive the 3M TRIBE over two years by utilizing Tribe’s linear vesting contract. We think of our efforts in this merger as the beginning of a long-term relationship with the protocol. Further, to signal our intentions to be active members and not mere absentee token holders, GFX will allocate a full-time team member (@fei.saver) who is already very knowledgeable on the protocol to be our liaison at Tribe.

In addition to the knowledge, engineering, and resources our team offers, we also want to delicately highlight the potential liability GFX Labs is taking on by solely developing the contracts and agreement, rather than the protocol doing that task itself and on a short timeline. While we have gone to lengths to reasonably mitigate as much risk as possible, this is something entirely new, and with that, along with the amount of capital, come risks that we take on.

On the whole, GFX is very excited to support the first-ever DAO-to-DAO merger and hope this milestone indicates the increasing maturity and sophistication of DeFi and the vital role that third parties play in maintaining and improving permissionless protocols.


@GFXlabs thank you for the answers - I know there’s been quite the explosion of commentary around this in the past 24 hours; please know that we appreciate the work that you and your team have put into this so far even though discussions may get heated at times in these forums!

I’ve not yet commented on the initial proposal as I’ve been collecting my thoughts and weighing the various arguments put forth; there are a few key points I’d like to highlight now.

At a high level I’m going to touch on the following:

  • the existing work completed
  • the overall compensation amount
  • the potential for future collaboration
  • the (lack) of vesting schedules in the proposal, and
  • my proposal for the most efficient path forward from here

Existing Work

The work completed so far consists of the proposal plan and the background research, and consultations of important members in the community to develop a fair structure for the merger and the mechanics within it.

The proposal is well written, but is lacking some critical details - such as the debt-token amounts and doesn’t touch on existing team vesting, nor does it specify who or how many core contributors exist on each side, or their current (and planned) hours-committment going forward.

This consists of two smart contracts and one simulation for the proposal-dao-votes on each side, with some helper utilities and inline contract ABIs, written and created within the past three days as per the commit history.

The above, assuming I’m not missing anything major, is it as far as the written-code goes. While I don’t want to minimize existing work, I do need to clarify that the two smart contracts and single simulation written does not consist of any amount of effort I’d consider worth the ask. Additionally, there are no unit or integration tests provided (often the most time-consuming part of writing code, especially smart contracts), and the existing simulations have very few comments, magic data/numbers throughout, and will require some amount of refactoring and analysis to understand fully (though the description in the main readme file is definitely helpful)

Edit - The above statement about lack of unit tests is incorrect. There do exist some unit tests that I did not see initially; my apologies for the incorrect information. (see here)

Overall Compensation Ask

To be quite honest, I’m very surprised that the overall ask is still the same (+ linear vesting) after the community response here; the amount asked seems (to me) an order of magnitude out of line with the current (and future!) work proposed, and I would absolutely not support it. I believe many others feel similarly.

Even a linear vesting schedule doesn’t seem appropriate when the existing Fei Labs core members have a 5-year back-weighted vesting schedule.

My Proposal

Let’s separate out work done already and future commitments to work together. Compensation as part of this merger proposal should be based off of work for this merger, and future cooperation should be agreed upon in a separate proposal; I think this would be much more agreeable to the community.

To be very clear - I think the amount you proposed is reasonable given a full-time commitment over the next several years, but I don’t think that should be a part of this proposal itself - it’s a rider and should be a separate issue.

Summary/Moving Foward Thoughts

Here’s the two main things I think need to get figured out before the merger can move ahead. I’m sure I’m missing some things that others consider just as important, but these are what I consider major.

  • Rari Infra Team Vesting Schedules
    • Fei Labs core members and advisors have a 5-year vesting schedule. We’ll need to discuss Rari members/founders/advisors possibly doing the same (this has been discussed somewhat internally by Fei Labs core members, and I’m surprised it wasn’t at all in the proposal)
  • GFX Labs Compensation
    • whether or not to include past and future compensation in this proposal, and how much that is, and if future, the details of the timelock if there is one

Here are my most updated thoughts on the merge:

Overall I am happy with where the proposal is, and many of the alternatives discussed for specific clauses seem reasonable. I made a specific request to GFX to change their contributor payment to be lower and add a clawback.

Very grateful to see the community continue to discuss and get this proposal to a place where the largest number of stakeholders can be excited about the vision :slight_smile:

Cross posting on Rari forum


One of the most exciting and unexpected outcomes of this merger proposal is that GFX decided they wanted to be more involved with the DAO. They are a respected, high quality team that brings legitimacy to the Tribe while supporting our communities’ steadfast journey to decentralization.

I want a future where many DAOs and companies contribute significantly to the success of the Tribe and I know that GFX can play an important role in getting there.

Keeping the value they bring to the table in mind, I strongly support @joey’s proposal to adjust the compensation for GFX from 3M TRIBE to:

  • 250k TRIBE upfront for spending significant time and resources over the past 3 weeks in aligning stakeholders, structuring the proposal and writing the contracts for the proposal
  • 1.5M TRIBE vested over at least 2 years with clear clawback conditions directed at keeping GFX as an active participant in the Tribe

I think this deal reflects the following:

  • GFX is a highly qualified team that the Tribe wants to keep engaged and value-aligned long term. They were always considered the top choice for structuring this deal and should be compensated accordingly
  • GFX started engaging in our community less than a month ago with no significant contributions before that
  • Both the Fei and Rari communities had options on who to work with to structure the deal, but would not have chosen to work with GFX if they knew they would insist on a 3M TRIBE condition (initially with no vesting!). While I know its dangerous to refer to “the community” in the abstract, this specific point is heavily supported by the feedback on this thread.

I understand the CeFi M&A anchor that GFX is using to get to the 3M number. I also have a deep conviction that in DeFi, we are in the business of disintermediation. We are not here to recreate the CeFi. The reason that GFX is seeing strong pushback from everyone involved in this deal is that the fee and its anchor are antithetical to the spirit of DeFi.

I sincerely hope that we can make the most of the enormous amount of work that has been put in by all the stakeholders necessary for this deal to go through and move forward on this together :evergreen_tree:


Hi Joey, is there a transcript or summary of this blockcrunch talk?

Thanks for this breakdown - very much appreciated! I am still curious as to where the 1.5m TRIBE and 250k TRIBE figures are coming from. As I said in my prior comment up above, there has to be some sort of background for these figures. For example: comps to other similar partnerships / advisory contracts, rough cost break down and how it tracks price-wise, estimated NPV from having them onboard, etc. I totally understand that projections like these can be subjective and we must not base everything on numbers, but just having a framework or path that explains how we got to ball parking these numbers would be transparent and help the cause of getting this matter out of the way of what seems to be an awesome partnership


Very good discussion and superb community call. I agree with the most of the latest posts and statements in the call in general.

Let me just weight in some additional view.

Something I haven’t read until now, I might miss some peaces here; please feel free to add or correct me: We discussed and pinged various players/ teams to support us on our journey. To my knowledge, there have been no official requests for proposals but definitely no order/ mandate for conceptual design or execution etc. I appreciate the input from GFX and see their good intention.

Regarding compensation we now see how hard to discuss and to negotiate it is after anchoring has taken place already. Nevertheless, fees should in general be built bottom-up and based on objective criteria. Besides monetary compensation we shall not forget what a prestigious assignment and industry first endeavor this is.

Let’s define the scope first. I basically see two NECESSARY parts: The technical and the valuation aspect. All objectives could be achieved by ourselves or by/ with help of third party contractors.

Frist, we need to get it structured and executed technically. As understood, this is basically what GFX outlined and would deliver as proposed. Others may be wiling to do it, too. Let’s not forget that we could alternatively write the code ourselves. We would probably all agree, that in any case we need at least some audit of the code to minimize the technical risk. On top of it, do we need (additional) insurance for the technical risk? Maybe, but I think no-one will provide it.

Second, a major part is excluded in the current proposal compared to classical meatspace world M&A: Determining fair valuation for and protecting thereby the merging parties. Same here, we could either contract (another) third party to determine it. Or we drop the discussion and agree on the current proposal from Jai/ Joey and avoid getting lost and/ or causing administrative delay and additional costs. I would vote for the first and start to shape the future as soon as possible. Do we need insurance for the business valuation risk, i.e. taking legal risk? Maybe, but again I think no-one will provide it for a reasonable fee.

So where does the ‚legal liability‘ funds/ fees discussion come from? As mentioned above, there is no risk nor third party willing to take technical/ valuation risk. For the valuation part we could mitigate legal risk (for the DAO) if we provide fair exit opportunities for all DAO members. Each DAO has bullet-proof exit criteria: (market-)sell you tokens. In our case, fair valuation should be time-stamped BEFORE the talks of the insiders began (whatever TWAP). And if the PCV based price derives from market price, we should consider the higher (which is esp. fair for TRIBE). So last but not least an agency could go after the DAO. We might do something here (even pro-active), but it’ not necessary to discuss or decide on for now.

Finally, another optional topic could be to get a long term contributor on board, but setting-up the latter should be a long and well practiced no-brainer for a/ two DAO(s). It should be separately discussed and executed on, even if combined in one deal.

I’m very excited about the merger and looking forward to seeing it happen. Thank you all!


Thank you all for the work done.
I’ve been with TRIBE with Genesis. I watched what problems the team faced, how they solved them and how they grew. And I really think that the team has come a very long way to be here today.

I really like the joint project with the Ondo Finance team. TRIBE has a great future ahead. Almost all DeFi projects will want LaaS and partner agreements with us.

PCV plays a very important role for us.
TRIBE is currently undervalued by multiples.
And if we take into account the intellectual value, then TRIBE is underestimated very much.

Rari Capital has a very dubious value.
Buying Rari is similar to a situation where large VCs like Nancent want to sell their overvalued and non-liquid assets for our PCV.

I am totally against this deal!
And I believe that we should involve real regulators so that they check everything, including the conflict of interests of both CEOs and large venture capital funds.


As we progress in discussions regarding the FeiRari merger, I understand that there is a great deal of pushback regarding potential issues. I, as a member of the community, am elated about the potential of this merge, and I want you all, the rest of the community, to share such excitement. I am certain that this merger will result in an empire, where Rari and Fei are able to lead this charge into the future of DeFi. This piece will serve to address the bulk of pushback the organizations are facing as a result of this proposal and highlight exactly why just the thought of this merger thrills me.

A primary concern is the mere rationale behind such a merge. Many inquire as to why Fei does not remain focused on developing their own stablecoin. Furthermore, what are the specific benefits to Fei as well as Rari. Chiefly, I must concede that, given the historic nature of this merger, pushback is both merited and expected. Rari and Fei are moving into uncharted waters with the first DeFi DAO x DAO merger, and it would be erroneous to anticipate smooth sailing. Regarding the benefits for both parties, the coupling of Rari and Fei will advance one another. It proves a true merger in that it is indeed a joint effort. Undoubtedly, Fei could remain in its own lane, but the fact of the matter is that the two will help one another grow. Fei solves liquidity issues for various Fuse pools. Meanwhile, Fuse and Rari have been able to provide a powerful foundation for Fei to bootstrap real usage, wherein the concern surrounding the utility of stablecoins is resolved. Fei was the first DAO to spin up a Fuse pool and deposit directly from a DAO; this merger intends to build on that already-established collaboration. This is what they have already done, by incentivizing the two parties to focus on each other in a historic way, it will be a sight to see. A post with more details regarding the benefits to both parties is coming soon.

Beyond this, some express concern regarding paying Fei just forking Fuse instead of essentially acquiring the protocol. The benefit is not only in that of the adoption of the Rari protocol, but also the ability for both teams to contribute. The intense level of collaboration, creativity, and innovation from Rari and Fei’s A-teams can and should not be overlooked when assessing this merger. A judgement centered around spending PCV on what many see as an overvalued asset neglects the very point about the alliance of this A-team of developers, lindy of the codebase and so much more. Of course, this merger is not necessary, but the benefits of it are endless. Not to mention the economies of scale in this industry moving forward.

Furthermore, there seems to be a great deal of concern regarding Rari’s Hack and the corresponding undertaking of Rari’s hack liabilities — risk merge. I am here to assert that this will not prove problematic. Rari understands that many lost money in the early tribal pre-sale. Yet, if Rari and Fei were to combine organizations, the latter would inherit this debt regardless so they may as well pay it off now. The Rari contributors have learned a great deal from the incident and highlighted clear security procedures to ensure it wouldn’t happen again. Besides, I see the endless possibilities for value creation in the future as a redeeming — and perhaps abrogating — factor to the nearsighted issues surrounding equity. Many view Rari as the prime beneficiary; however, our views are oriented for the long-term, and we are willing to adapt (as exhibited by the developed nature of Rari and Fuse itself).

Finally, to address the community’s concerns surrounding additional inflationary issues: Rari is working on plans to ensure that dilution is kept to a minimum on the TRIBE side of things, resulting in a better distribution for RGT holders as well.

For the Rari and Fei teams, these are the nascent stages of something unfathomably powerful. The goals of the two separate entities are to disrupt the DeFi space and make a sincere impact on humanity moving forward. Having said that, I know that together, Rari and Fei can do this in a better, quicker, and more efficient manner than they ever could on their own.


Trying to look to the forest and adding a more strategic perspective about the merger with this article: To Merge or Not to Merge - Crypto Kailash

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I would like to add the following amendment :

In section “V. Voting Schedule”, chapter B “Rari governance”, add the following steps to the proposal :

This will remove all the ~30M$ vesting RGT to Rari team members, and we can also add terms to create TRIBE timelocks for these team members, with longer vesting periods, in section V.A.

As it stands now, the Rari team members will have fully vested in October 2022 (in less than a year), and since the deal is mostly about merging teams, we need to incentivize their team to stay longer than that. We have a verbal commitment from Jai that their team will switch to longer TRIBE vesting contracts, but it’s not very complicated to enforce this in the Merge proposal itself, so let’s do it.


We are withdrawing our Rari Capital Fei Protocol merger proposal from consideration. We are proud of our work and both communities, and we want to thank each community for considering our proposal.

If someone from the community wants to fork our proposal and engineering, they are welcome to. All we ask is the community sends a one-time payment of the community’s choosing to 0xA6E8772AF29B29B9202A073F8E36F447689BEEF6; otherwise, please do not use our work.

We are withdrawing the proposal because we believe that everyone’s strategic visions may not be fully aligned, and we have very high standards for both communities’ satisfaction with the proposal, in order to set an example for future DAO mergers.