I was thinking about recent news and the increasing regulatory attention to DeFi and stablecoins (see here).
One interesting take from Anthony Sassano about this context is very relevant for us:
I’m also talking decentralizing the entire stack. The team, the front-ends, the supporting infrastructure - all of it needs to be as decentralized as possible to resist any adverse regulations and law enforcement action. We also need to address the biggest pain points - centralized exchanges and stablecoins - by building decentralized alternatives.
Another thing that the regulators are going to show us is which projects are actually decentralized and which ones are DINO (‘decentralized in name only’). I don’t think any of the crypto-based systems that claim to be decentralized have had to deal with a serious adversary like a regulator before - but they will very soon. Whether they are layer 1’s, layer 2’s, DeFi apps or whatever else - there will come a time when they will all face the wrath of a well-funded regulatory adversary - and they will lose if they are not truly decentralized. This is exactly why all teams should be building their systems to be as decentralized as possible from day 1.
This is really the only way the crypto ecosystems wins - we always knew that the regulators would be coming - and now it’s time to fight. Let’s decentralize everything.
In the case of stablecoin projects, I think we will have some natural selection of the projects with more decentralization in assets and operations.
We are well positioned on the decentralization of the assets held by PCV. However, when talking about operations we can improve a lot. And it is natural that as Fei is just in the beginning, it is very dependent on Fei Labs. Creating new versions of the product is very time consuming and knowledge specific. So, the works related to peg mechanism and product development is more difficult to decentralize at this time and will continue to rely on Fei Labs.
However, I think it would not be healthy to have Fei Labs covering all the other operation areas. In my opinion, some activities that could be operated in a more decentralized way are:
(1) Growth & Marketing & Education & Content production
(2) Protocol finance and analytics
Other projects are going in that direction of decentralization of operation. See all the experience from Index Coop with working groups, MakerDAO with core units and Rari Capital starting now with their Task Force.
I know the grants program is already covering part of these areas, but the grants model tends to attract more spot and isolated contributions. To attract more recurring contributions in a coordinated way and aligned with a strategy, these structures could help.
While in May I saw a great need for FEI DAO to structure its PCV guidelines and how we would diversify our reserves, now I see an urgent need for a focus on Growth & Marketing. As you can see below the number of TRIBE and FEI holders are having difficulties to increase the number of holders (exception is the spot movements related to Tribe listing in CEX).
Source: Dune Analytics
I think Fei could have something similar, a Growth & Marketing structure coordinated by community. The scope could include, for example: communication planning & strategy, content production, including educational materials, social media content and monitoring, influencers relationship, sponsorships. Just a starting point here.
The idea of this post was not to present a specific proposal, but to incentivize the discussion in this important subject for the future of Fei. Discuss how can we decentralize operations and have a more resilient protocol.