FIP-69: FEI/FOX Token Swap & Collaboration

(Please note this Last Call is an update to the draft proposal here: [Proposal] FEI/FOX Token Swap - #5 by erikvoorhees. An update for the ShapeShift governance process has been posted here: [SCP-56] FEI/FOX Token Swap & Tribe Collaboration - 🏛️Proposal Discussion - ShapeShift DAO).

As this has gotten ample support both here and in the ShapeShift community, we’ve moved the proposal along with an option to approve a token swap whereby each side contributes $2 million, $5 million or $10 million of their native token. (Choose below).

Hello FEI/Rari Tribe!

This is Kent; I lead the Tokenomics workstream at ShapeShift. On behalf of all of us at the DAO, congrats on your merger. We’re super excited to see what new doors this opens for both communities.

Here at ShapeShift we’re very familiar with both platforms, having already plugged into their unique capabilities. On Rari, our FOX Token is available in both the Tetranode Pool and our own “Fox and Frens” pool. We recently used Rari to borrow FEI in order to fund our December payroll. Additionally, we’re a proud partner in the FEI liquidity-as-a-service (Laas) program and are currently tapped into a steady stream of TRIBE rewards in exchange for providing FOX liquidity.

Looking ahead, we’re excited to collaborate even more closely with your newly-united TRIBE. To provide just one example: our decentralized, open-source interface could help your community connect with more users and offer them an improved experience by facilitating direct integrations with RARI pools. Similarly, the addition of FOX rewards to Rari pools could create a win-win for both projects; FOX would become more widely used and distributed, while simultaneously incentivizing greater use of Rari.

From a tokenomics and treasury management perspective, our top priority is to diversify a portion of our treasury–which primarily consists of FOX–into stablecoins. (The current state of the treasury, including most of our active DeFi positions, can be viewed here: zapper dot fi/account/0x90A48D5CF7343B08dA12E067680B4C6dbfE551Be.

Given our existing relationships with the FEI/Rari communities, we’ve identified a promising way to achieve a portion of that desired stablecoin exposure (while at the same time, deepening our current win-win relationship): a DAO-to-DAO swap of FOX Token for FEI.

For ShapeShift, FEI’s price stability, vibrant community, expanding ecosystem, and RARI merger are highly desirable attributes. For FEI/RARI, potential benefits of this token swap include:

  • Treasury diversification
  • Direct integration into the ShapeShift platform
  • The ability to vote on DAO proposals (FOX is ShapeShift’s governance token)
  • Exposure to ShapeShift’s various value-accrual mechanisms:
    • Revenue-sharing agreements with DeFi projects integrated into our platform, such as Yearn
    • Revenues generated from commissions from validators operated on behalf of the DAO
    • Revenues generated from allocating assets in the DAO’s treasury to DeFi strategies

Where we’re headed:

The roadmap for the ShapeShift DAO is ultimately driven by the community of FOX Token holders. Currently the community is aligned on–and rapidly progressing toward–the following mission and vision:

Vision: We envision a borderless financial system built on open, decentralized protocols.

Mission: We shall be the pathway into this borderless financial system; an open-source, multi-chain, self-custody crypto platform enabling billions to achieve financial sovereignty.

An early, in-progress version of the new ShapeShift is soft-launched at https app dot shapeshift dot com (sorry, the forum is only letting me post two links) and we’re planning an official launch for January 17th, 2022. This version is open-source, supports multiple wallets, multiple blockchains (not limited to EVM-compatible networks), and is architected for complete decentralization.

The new ShapeShift, powered by a full open-source stack including HDWallet , Unchained , Chain Adapters, and Web repositories, will enable completely decentralized access to DeFi protocols across any chain. Additionally, the upcoming FOX Chain will provide backend node infrastructure for any interface that wants to be truly decentralized, including ShapeShift’s.

Finally, through integrations with DEX and DEX aggregator protocols such as 0x, THORChain, and Osmosis (in-progress), ShapeShift enables users to seamlessly move crypto assets across chains with no KYC, custody, nor added fees. With the understanding that both the decentralized interface and blockchain data infrastructure are imperative to bringing DeFi to the masses, the ShapeShift community is actively coordinating to build this.

What exactly does this proposal entail?

$X million worth of FOX would be exchanged for $X million worth of FEI, where “XX” would be determined in this Last Call phase (Separately, ShapeShift is voting on approving up to up to $10 million FOX for $10 million FEI.)

The price data used to determine the equivalent token quantities will be determined at a date and time that both DAO’s mutually agree upon in advance, with the Chainlink feed for the respective tokens providing the relevant price data. The two communities will mutually agree upon considering additional token swaps in the future, should this initial swap prove beneficial for TRIBE and ShapeShift.

In addition to executing its side of the DAO token swap, ShapeShift would commit to integrating Tribe products into its platform (initial discussions about this are already in the works), as well as adding FOX rewards to Rari pools.

Ultimately, we view this potential token swap as just one more building block for constructing a solid, enduring foundation of partnership and collaboration between both of these vibrant DAO’s. We look forward to joining you in helping to build a more inclusive, open, permissionless, and vibrant future.

1 Like

The $10M seems like too much, with barely that much in FOX liquidity available on Uni V2, which is the biggest pool for FOX.
https://v2.info.uniswap.org/pair/0x470e8de2ebaef52014a47cb5e6af86884947f08c

Seems like too much of a risk to hold such a sizeable position given the liquidity