FEI is intended to be an algorithmic stablecoin that does not (in time) need to be excess collateralized by assets backing it. In general, diversification does not provide value to FEI, only to TRIBE.
While I agree that diversifying PCV has the potential to benefit TRIBE, I am voting against FIP-6 for the following reasons:
- The current proposal simply trades ETH for stablecoins, without an associated plan for yield generation, management, etc. On its face, I am not convinced that the atomic act of converting ETH into DAI/USDC has a higher expected value than holding ETH.
- The execution plan as described, selling ETH on Uniswap v2, is fraught with costs, slippage, signalling, manual operational risks, etc…it is “lossy”.
I suggest that the TRIBE community consider an alternate path:
Use ETH PCV to create a one-sided range order on Uniswap v3 , e.g. offering to sell PCV for 2800 to 4000 USDC (or some other range determined by the community).
This would have the following advantages over the status quo plan:
- Yield-generating strategy, that produces income (in the form of trading fees) for TRIBE holders (instead of slippage and costs)
- Programmatic diversification, not human/manual/operationally led
- Ecosystem benefits: additional liquidity
- Scalable to other PCV diversification goals (e.g. DeFi tokens, DPI, WBTC, etc)
This approach has the potential to single-handedly make TRIBE the most important liquidity source in the entire DeFi ecosystem.