FIP-XX - Co-Incentivized FEI<>RAI Balancer Metastable Pool

Proposals
1

Overview

FEI accumulated RAI in its treasury and it’s deploying it in Aave v2 and Fuse. There is a better way to use this RAI in combination with FEI with the help of a FEI<>RAI co-incentivized Balancer Metastable pool.

Abstract

FEI has been using concentrated liquidity pools extensively over the last months and has also been diversifying the underlying collateral held in the PCV. FEI DAO also accumulated RAI in its treasury and it’s currently lending RAI in Aave v2 and Fuse.

We (the Reflexer team) believe there is a better way for FEI to achieve multiple goals at once, namely:

  • Further deepen FEI liquidity
  • Diversify the collateral base even more using RAI
  • Accrue more PCV revenue from RAI held in treasury via RAI<>FEI trading fees

We propose the following solution: launch a Balancer v2 Metastable pool with FEI & RAI and co-incentivize it together with the Reflexer community. Furthermore, we (Reflexer) can post a proposal on the Balancer forum to gauge interest for allocating BAL incentives to our pool.

Implementation

Reflexer is open to incentivize a FEI<>RAI Metastable pool with up to 20 FLX per day, assuming the FEI community would be open to match these incentives.

FEI can deploy its curent RAI treasury in the Metastable pool or take advantage of the recent Curve<>RAI integration and source more RAI collateral which can be separately deployed in Balancer. This way, FEI would deepen its liquidity, as well as make the collaboration between our projects even stronger.

Next Steps

  • FEI and RAI communities discuss this proposal over the next 1-2 weeks
  • Reach out to Balancer and post a proposal on their forum about co-incentivizing the FEI<>RAI pool with BAL
5 Likes
2

hi there stefan

Im a huge fan of this idea

fei currently holds $20M worth of RAI, about 25% of the supply

putting at least half of that into balancer with incentives on top sounds like a no brainer

benefits

  1. deepen FEI liquidity on balancer, synergistic with other upcoming FEI balancer plans
  2. create DEEPEST source of RAI liquidity by a huge margin
  3. strengthen protocol ties with RAI and Balancer
4 Likes
3

Great idea.
I think this will strengthen collaboration and protocol strength for both RAI & FEI.

4 Likes
4

longer term it would also be very cool to leverage Balancer’s boosted pools feature to rehypothecate the unused portions of the liquidity for additional yield

for example this pool rehypothecates stables into aave so that the liquidity earns 1) trading fees, 2) liquidity mining, and 3) aave fees

4 Likes
5

Love the idea, if we can have triple incentives (FLX/TRIBE/BAL) that would be very interesting too :+1:

I think we can make it a Boosted pool, both RAI and FEI are listed on Aave, so no additional code should be required on Balancer side.

Is there a way to know, on-chain, what the RAI/USD target price should be ? I think metastable pools require a target change rate - would Reflexer be able to develop a RateProvider ? On our side we’d need to develop a PCVDeposit for Balancer metastable pools (which we are interested to have anyway).

2 Likes
6

So a Metastable pool can also be Boosted? If that’s the case then I don’t see why we wouldn’t start like that.

There’s already a contract used by Curve and mStable to read the latest RAI target price so Balancer can use it as well.

2 Likes
7

Great idea. Better way to utilize RAI in treasury, and further strengthening of protocol ties

1 Like
8

Posted a proposal on the Balancer forum about co-incentivizing the FEI/RAI pool:

Would love to hear more feedback so we make this a reality!

2 Likes