Idea: burning FEI from IDO LP tokens on unstaking

After the Genesis and the pre-swap, IDO contract was loaded with ~80.8m TRIBE and 260.5m FEI (making the starting price 3.22 FEI per TRIBE, the effective price for 100% pre-swappers was of course lower due to the additional TRIBE airdrop). LP tokens that hold these assets are timelocked and belong to the FEI team and VCs (the exact numbers for these tokens were never disclosed). I will avoid talking about how fair is it for the team&VCs have vested access to unsold TRIBE from IDO during four years, since it is a completely different topic. For now I just want to focus on FEI locked within their LP tokens.

FEI that were loaded into the liquidity pool were originally minted without any assets backing them, just like FEI in FEI-ETH pool. But the LP tokens from the main pool belong to the protocol and these FEI can not ever go into circulation. The LP tokens from FEI-TRIBE pool don’t belong to the protocol and because of this I believe we should not allow these FEI to go into circulation.

I encourage both other FEI/TRIBE holders and FEI team to discuss what can be done from both economical and technical side of things (i.e. what do we need to do and how are we going to implement that and is it actually possible to implement).

In my opinion something like @Eswak proposal should be implemented. For each TRIBE that team/VC is getting from the LP tokens, they have to burn 3.22 FEI.

Let’s imagine that they want to unstake LP tokens worth 1 TRIBE and X FEI, where X is the current TRIBE price in FEI. Here are some numbers depending on the price:

  1. X = 6.44 (2x the initial IDO price), they will unstake 1 TRIBE and 6.44FEI, burn 3.22 FEI and finally receive 1 TRIBE and 3.22 FEI.
  2. X = 1.932 (0.6x of IDO price), they will unstake 1 TRIBE and 1.932 FEI, convert 0.25 TRIBE to 0.483 FEI and burn a total of 2.415 FEI (=0.75 * 3.22) and finally receive 0.75 TRIBE.
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I agree! No one cares about the people of Preswap now! Everyone thinks that their huge losses are justified