FIP-XX: Add tFEI to FeiRari and Seed 10M FEI to Tokemak

Status: Draft
Authors: @Fishy @joey

Add tFEI to Rari Capital Fuse Pool #8 “FeiRari” at a collateralization ratio of 70%, as non-borrowable collateral. Supply will be capped to 25M tFEI. Seed 10M Fei to the Tokemak FEI Reactor. Create a 3M tFEI/FEI pair on Curve.

tFEI (staked FEI on Tokemak) is a relatively safe asset that allows FEI holders to gain additional utility from their FEI. Adding tFEI to the FeiRari pool also strengthens our partnership with Tokemak, and allows FEI holders to acquire more stake in Tokemak’s governance. This also sets the precedent that useful FEI derivatives will be integrated more deeply in the FEI ecosystem, giving other DAOs more confidence building on FEI. Seeding FEI to the Tokemak reactor as a DAO also grows our TOKE holdings, giving us more TOKE with only platform risk as a potential cost. The AMM pair is necessary, as liquidators may be averse to holding tFEI for a whole Tokemak cycle in order to get their FEI collateral.

Add tFEI to Rari Capital Fuse Pool #8 “FeiRari” with 70% LTV, as non-borrowable collateral. Cap supply to 25M tFEI.
Seed 10M FEI in the Tokemak FEI Reactor.
Create a Curve pair with 1.5M FEI and 1.5M tFEI, A factor of 200, fee of 4 bps, basic.

The proposal will use approval voting.
The voting options will be as follows: Add tFEI YES, Add tFEI NO, Seed 10M FEI YES, Seed 10M FEI NO.

I’m generally in favor but we need to iron out a few details:

We need a tokemak amm pair for liquidations. We can make tFEI/FEI as a protocol but that requires us to have some way to keep the TOKE yield we earn. Tokemak is a bit weird with yield for contracts so that is a blocker on this proposal

1 Like

Bumping to get input on pool choice/parameters. Will go to last call if no changes are suggested in 48h.

Not a fan of this proposal :

  • releasing an additional 16M FEI in circulation
  • increase our exposure to Tokemak
  • increase risk in FeiRari

I think we should withdraw our ETH from Tokemak, the yield is now ~4% TOKE, where we could get ~4.7% with stETH. Also, the TOKE we earn can’t be used for voting yet, and we’ll get exposed to imperment loss after Tokemak starts deploying liquidity for real.

As a heads up : I just claimed the rewards, we now own 10,290 TOKE (~320k$), and currently risk 10,000 ETH for it (24M$).

Even if we don’t pull out our ETH, I still think we should at least wait that we are able to vote with our TOKE before we interact more with their protocol.


Lets get in touch with the Tokemak team and calculate how many incentives we can direct with this TOKE. Getting some benchmarks vs Convex and stETH would be useful on making an informed decision here.

If we can’t delegate the TOKE effectively and direct liquidity, I’d be in favor of pulling out ETH