Idea: Tokenized Protocol-lended FEI

Lending FEI (through the protocol) is a staple in our PCV management system, but lending interest rates can often be inconsistent. This proposal seeks to solve this problem through issuing a new token, hereby referred to as protocol-lended FEI (plFEI). plFEI should be able to be deposited on various lending markets, and its key feature is the ability to lend FEI without owning it. plFEI yields the interest gained to the depositor, while allowing borrowers to borrow an equivalent amount of FEI. For example, if Alice lends 1 plFEI to a fuse pool with a FEI lending interest rate of 5%, she earns $0.05 per year. If Bob then borrows from that pool, he can borrow one whole FEI per plFEI Alice has lended. plFEI allows the protocol to earn cash upfront by minting and selling plFEI, and reduces the cashflow variability that the PCV experiences. plFEI is desirable because it allows lenders to earn far higher interest rates (because 1 plFEI should be worth less than 1 FEI). In order to reduce the risk of FEI being stolen, plFEI should only be whitelisted on select Fuse pools as well as mature lending markets like Compound and Aave.

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In general Iā€™m much more in favor of using other protocols to achieve our goals versus expanding core protocol mechanisms. Why not have fixed-income positions on existing yield?