PCV Guidelines - New Version

Hello Tribe!

After feedbacks from the community, we have a new and simpler version of the PCV Guidelines (ex-Investment Policy Statement).

All feedback is welcome as this document is a work in progress. We hope this could help community to have more clarity and convergence over potential next deployments of PCV.

To gather the community sentiment and priority regarding some PCV deployment options, we kindly ask to answer the poll below.

1. What would be your priority in terms of PCV allocation considering the following options (you can vote in two options):

  • Provide liquidity for FEI-stable coins pairs
  • Provide liquidity for FEI-WBTC pairs
  • Provide liquidity to FEI-DeFi Large Caps pairs
  • Generating yield with ETH (eg.: using Lido to stake)
  • Generating yield with other stablecoins

0 voters

2. Do you agree with a target allocation in stable coins between 10% and 30% of PCV with the objective to provide liquidity for FEI markets or generate yield?

  • Yes
  • Yes, but with a higher allocation
  • Yes, but I prefer an upper limit of 20%
  • Yes, but I prefer an upper limit of 10%
  • No allocation in other stable coins at all

0 voters

3. Do you agree with a target allocation in BTC up to 10% of PCV?

  • Yes
  • Yes, but with a higher allocation
  • No allocation to BTC

0 voters

4. Do you agree with a target allocation in DeFi Large Caps up to 10% of PCV?

  • Yes
  • Yes, but with a higher allocation
  • No allocation to DeFi Large Caps

0 voters

*We considered DeFi Large Caps, projects with more than than $ 1 bln of market cap.


Instead of an allocation to 2 segments “DEFI large caps” & mid/small, why not a position in DPI index? it has a large liquidity and gives a very good exposure to DEFI. It is market cap weighted with monthly rebalancing, so mostly composed of large caps and no work to maintain it.

1 Like

Thanks for the comment!

DPI is a great product when thinking only with the investment perspective. The advantage I see in buying DeFi Large Caps is to provide liquidity for FEI-Token pairs (FEI/UNI, FEI/COMP, etc). In addition, it could enable meta-governance, which would not be possible by holding DPI.

I’m converging to the view that PCV management should be run largely around on-chain data + (maybe) crypto crowd sentiment modelling and respective metrics — I’m moving towards Joey’s view of PCV as a special beast of its own, it’s not an investment portfolio/sovereign wealth fund/endowment/treasury and its risk management and composition should be treated accordingly in compliance with its purpose.

1 Like

There could be some great synergies to align ourselves strongly with a project like Index Coop, FEI could be a great liquidity source for their Index tokens and we can easily add them to the Fuse pool for additional leverage @Bruno

The PCV is a great advantage and also a limited resource, so we should try to optimize for the highest impact deployments in terms of FEI utility.


Yes, interesting view, I did not think by this perspective at the first moment. But, it is true, providing liquidity to FEI-DPI could be good to drive FEI adoption. It could be complementary of providing liquidity to FEI-DeFi Large Caps.

@Bruno, thanks for the updated statement.

I second the view that Fei could be useful as a liquidity provider for other defi large caps. I think in this sense Index Coop or even BasketDAO could be a good place to start.

One thing that seems to be missing is the relationship between PCV and collateralization, namely the CR%. At this point we have been well in excess of 200 - even 300 percent collateralization. I would like the PCV to respond to this with more agility. While the PCV is used for liquidity provision and peg defense, we have been pretty capital inefficient with most of the ETH just sitting there doing nothing much. I would like to see the WG to look into the possibility to:

  1. Set a minimum limit of collateralization (say 150-200% initially and then possibly down to 110-150%) with any assets above that be put into other uses.
  2. Allocate ‘excess’ ETH into providing additional liquidity with other stablecoin pairs
  3. The pairs above would ideally with other algo-stables (synergistic with outreach/integrations);
  4. If there is deemed sufficient liquidity, then I seriously suggest to utilize ETH for additional yield (such as Lido staking, or others)

Finally, the relationship between PCV and TRIBE should be explored if not outlined. Is there any principle of PCV management that will flow back to TRIBE holders (perhaps some % of PCV management revenue should go back)?


Great points as always, @arcology !

@Eswak is developing the code for providing liquidity to Uniswap V3. It will be easier to use it in the case of the pair FEI-other stable coins. We will need to think better what would be the market making strategy to other non stable pairs, as FEI-DPI or other specific DeFi Large caps.

This is being cited in the section " Strategic Minted FEI Deployments", but I agree we could also outline this in the “Risk Management” section as well.

I think the current CR is the result of a relevant reduction on circulating FEI. As FEI recover from this drawback, CR will naturally be reduced with more circulating FEI.

Even with other uses as providing liquidity or generating yield, deploying the assets will not affect the collateralization rate. What affects the CR is the minting of FEI to incentivize FEI lending makets for example. So, it is not clear to me how this minimum level could drive the overall strategy.

Yes, these could be the next steps with PCVSwapper code, we can use ETH to buy DeFi tokens, stablecoins, WBTC, etc and provide liquidity against them. That was the idea that motivated the poll in this post and the target allocation table.

As this is more simple, it could come first in a small % of PCV to start.

I think it will be difficult to reach consensus on it right now. I would prefer to just outline it on the " PCV Inflows and Outflows" section and we come back to it in the following months when protocol matures and the revenue generation become more clear. I will adjust there.

@bruno @joey regarding meta-governance, $INDEX token could actually be a good complement to holding a DPI position.

$INDEX is very powerful, it gives leveraged meta-governance to its holder. By leveraged, I mean that with a small holding in $INDEX, you get the voting power of a lot larger position in the underlying token.

Let’s take for example this proposal ( Add RAI to Aave V2). There is total of 62k of $INDEX (approx. worth $1.5m) voting for this proposal, which will “represent” the whole Aave position in DPI (20.4% of $142.4m, or $29m).

So in this example we have a leverage of 19x in the meta-governance ($1.5m having voting power of $29m). This is just an example and with votes on more contentious issues there will be more participation of $INDEX voters, decreasing the leverage of each one of these voters, but I think it can be interesting to consider for large DAOs like Tribe.


It is a good point. I am a fan of Index Coop, they do an amazing job! I think we could look more closely on this opportunity in the future. For now, I think the priority would be driving FEI liquidity and volume.

I read in their forum that they were struggling to reach a minimum quorum to participate more on meta-governance decisions and proposed something as a committee. It would be interesting to see what they will decide to do.

1 Like