FIP-XX: Remove FEI-USDC 1bps Incentives

Status: Draft
Author(s): @Fishy

Remove TRIBE emissions on the FEI-USDC Uniswap v3 LP. Utilize one of the solutions below to solve the USDC->FEI pipeline problem.

The FEI-USDC pool on Uniswap v3 is inefficient for its purpose and consumes several million TRIBE of rewards each year, an absurdly high amount for its value. FEI-USDC in its current form only serves to allow USDC holders to cheaply convert their USDC into FEI, which according to the 1192x dominance of FEI in the pool (at time of posting) isn’t even a common occurrence.

An easy replacement is a router through MakerDAO’s USDC-DAI PSM which then routes through our current DAI PSM. While this increases gas fees as well as PSM fees, the current solution isn’t worth the millions of dollars of emissions we are paying for this service.

Another possible solution is moving the LP position to FEI-USDC 5 bps, which is used much more frequently at over 22x the 7d volume of the 1 bps version. This pool is also far more balanced than 1 bps, with only a slight FEI dominance compared to USDC.

This problem also may be solved in a few days by our Curve pool, as the A factor is ramping up to allow lower slippage swaps.

A specification is subject to discussion in the thread below.

1 Like

The USDC-FEI 1bps is good, but our peg isn’t that’s the issue. This FIP will fix it but we need first get the FEI Saving Rate and/or others solutions to increase DAI reserves (sell RAI, FEI-A vault on Maker, borrow on Aave).

USDC or DAI doesn’t make much a difference as it is arbed by the DAI PSM the same way (flashbots are using the DAI-USDC PSM).


fully agree. these incentives can/should be removed eventually, but not until other issues have been resolved. otherwise incentive removal will compound those issues