FIP-XX: Expand OA FEI deployments on Fuse

Status: Draft


Expand OA charter to allow more aggressive deployment of FEI in Fuse pools.


Various Fuse pools such as #6 and #8 have had high utilization (and therefore high possible yields) without being adequately addressed by OA’s FEI deployment powers (added in FIP-39). FIP-39 grants OA this power:

First, I recommend changing the utilization threshold to “above target on average over a week”, instead of a week straight, in order to allow OA more ability to generate yield for the protocol, and grant FEI borrowers lower rates.

Second, I feel that forcing a whitelist on every verified pool is unnecessary and slows growth. The pools have already received a form of approval from the Fuse team, and so we should use an exclude rather than include basis when deciding what Fuse pools we want to use.
For an initial exclude I recommend Vesper Finance, due to their previous mismanagement of their pool.


Change target utilization from “above target for a week straight” to “above target on average over a week”

Authorize OA to deploy FEI in all verified and non-excluded Fuse pools.

Establish an exclusion list to allow the DAO to prevent deployments in risky fuse pools, include Vesper pool 23 in this list. The exclusion list can be changed with a snapshot vote.

This will be an approval vote.

The options for the vote are as follows: do nothing, Change target utilization to average, Establish Exclusion List/Authorize YES, Establish Exclusion List/Authorize NO.

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moved to proposals, starting 48h hour last call!

Does this include all pools? FIP-39 was only for approved pools which I believe only include aave and feirari

Proposal expanded to include increased authorization of OA, and an exclusion list for risky pools. Moving off of last call for additional discussion.

This would give OA more flexibility. I am in favor of this.

From FIP-39, OA can “seed up to $2.5m FEI in any verified Fuse pool but not unverified pools without a snapshot vote.”

I understand that OA already have flexibility to seed FEI in the pools even if it is below 80% utilization. I do not see why we need a rigid target of 50%, as the interest rate just “explode” after the kink. The idea here was to avoid, when possible, an extremely high interest rate for users.

I do not agree with that, I think it would be better to evaluate the risk case by case.
If we put a rigid 50% target we are taking out flexibility from OA to analyze the risks. Also, it will probably not be achievable as we have the limit of $2.5m per pool. I would like to see more discussions and views on that.


Removed the rigid 50% target. Thanks for the feedback!


At this point I think we need a specific FeiRari + Fuse OA committee with full discretion (maintaining DAO + Guardian Veto).

I think we have several strong candidates on this thread, and I see this as a separate responsibility from the existing OA multisig


Overall, this is a great post. Every new Fuse pool owner that I talk to wants FEI in their pool and there’s no reason why we shouldn’t provide the liquidity. On the other hand, it is extremely important to properly ensure each pool is safe and provides as little risk as possible to the Fei protocol and community.

I was a fan of the criteria outlined in FIP-39 and most of the pools do follow those requirements. I would just like to see a more streamlined process from Rari governance to verification to criteria checks to seeding the pool without a long delay. Now that Rari and Fei are merged, how about we propose using FIP-39 as a template in order to verify pools? Would decrease the amount of time and provide the OA with the power to seed all verified pools.

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I feel this is necessary, if a pool wants to be seeded, they can come here to the forum and present their protocol and security model etc. We have deployed FEI to pools already that have infinitely mintable assets or EOAs that can add any assets to the pool without delay etc. In general I think our whitelisting for Fuse pools are not strict enough already, and nobody really has time to perform an audit of all assets and all protocols that own Fuse pools, in OA or dev team, so I think we should work on that aspect, instead of establishing even more flexible rules. Someone with technical knowledge could be in charge of writing a small report/forum post on each prospective pools, and if no objections arise, OA could seed the pool a few days later.


Related to @Eswak 's point, what are the criteria for being a verified pool? If being whitelisted and being verified have similar requirements, we can streamline things by unifying whitelisting and verification. Deciding whether and how much FEI the DAO should seed into a verified/whitelisted pool would of course be a separate decision process.

Was not aware we were that liberal with our deployments. At this point I support
Unifying the whitelist + verification process
Creating a Fuse OA team (as described by Joey)
Reevaluating the 2.5M per pool limit
Changing from above utilization for a week straight → above utilization on average for a week (I feel this doesn’t add additional security concern as long as we more deeply evaluate pools, which we should already be doing)
Reevaluating pools with infinite mint/eoa access/other mutability risks (this could be completed by Fuse OA/a technically knowledgeable community member)