Voting for $0.90 will kill trust in the protocol and hurt it in the long term. $1 is best option to restore trust. It’s supposed to be a $1 stablecoin, not a $0.90 coin.
It’s hard to tell. What I’m about to say is a simple analysis of what would happen in one extreme scenario. There’s a lot I can’t take into account because it’s a very complicated system, given all the psychological forces that affect it.
So here’s the question I’ll try to answer: what will the price of tribe be if all of the circulating FEI is bought by the protocol at $0.9 or $1 and the price of tribe reaches the floor that protects us against 51% attack?
Note, before anything, that this floor is only theoretical at the moment because most of the Tribe is timelocked or in possession of the DAO. This explains why the price of tribe has often been below this price floor in the past week.
Ok. At the moment I estimate there are 813M - 290M = 523M circulating FEI. This number could grow as people speculate that they’ll be able to sell at $0.9 or $1, creating an incentive to buy FEI from uniswap. But let’s assume for simplicity it’s 523M.
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If FEI is bought at $1: then the remaining PCV will be 1024 - 523 = 501 M. In this case the market cap of tribe would have to be at least 1002 M to be protected against a 51% attack. This would value each tribe at about a $1. That said, though $1 would be near the market price, it’s redeemable value if we, as a community choose to abandon the project as the FEI holders want to abandon at the moment would be around $501M/138M = $3.63. Of course, no individual will be able to choose to sell at that price, but the community might choose to vote to do so all together. I don’t think that’s a desirable outcome, but it’s an important one to consider when we consider how much we lose if we adopt this proposal. In one sense, the tribe of price might drop to around 66% of its current value. On the other hand, it’s redeemable value if we choose to abandon the project is around $3.63. That means we could all still profit upwards of 25% on our genesis investment and also return seed investments.
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If FEI is bought at $1: then the remaining PCV will be 1024 - 523 = 553 M. In this case the market cap of tribe would have to be at least 1106 M to be protected against a 51% attack. This would value each tribe at about $1.106. It’s redeemable value if we choose to abandon the project is around $4.00. Again, I think that would be extremely undesirable outcome. But it paints a clear picture of the situation we’d be in.
What all this is to say is that, despite all of the scaremongering we’ve witnessed over the last week, the Fei Protocol remains in a rather strong position. We can indeed afford to pay out every single FEI holder. Whether we should is another matter. I think we shouldn’t because it won’t solve the problem that we’re all most concerned about: the incessant attacks against the team and the project. My take is that those attacks are more so based on people’s inability to accept their responsibility and competitor’s fears that Fei Protocol will be tremendously successful. Needless to say, the picture I paint above shows that neither of those concerns will disappear after passing options 1 or 2. After all, those that leave might eventually realize they made a mistake and lost money relative to staying with us. And our competitors will do the very same computation I just did and realize that the Fei Protocol remains in an extremely strong and promising position.
Ask Bitcoin, Ethereum, or Avalanche: the path of disruptive technologies is riddled with catastrophic mistakes from its users and resistance from the legacy infrastructure it threatens.
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Redemption at $.90 or not at all. 1 only rewards those that joined genesis for the airdrop not long term supporters. Those that don’t want .90 can wait until the price recovers to 1 in the future. The bigger issue it seems is long term supporters may be split between no change and .90, which could cause the $1 to win.
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@eswak I agree with this idea.
1.) Propose exit price at $1
2.) But to redeem, also require the return of the proportional amount of TRIBE bonus received at genesis.
If exiting at $1, then it’s only fair that the TRIBE bonus received at genesis is returned as well. If they already sold that TRIBE, then they can buy it back on the market. (Side bonus of boosting TRIBE demand).
In fact, this may be the best of both worlds since we can reach the protocol-promised peg of $1 while not disproportionally favoring those who bought FEI, got the TRIBE bonus, and then dumped.
No one thinks it’s bad for genesis participants to benefit from their investment. At least what I think is that they should benefit when the peg is restabilized algorithmically. People that currently hold FEI took a risk. Plain and simple. I agree that tribe holders will vote for what’s best for the protocol. I don’t agree that this proposal will allow us to start over with a clean slate. It will set the precedent that the community is susceptible to unreasonable outcries and is willing to spend the PCV to satisfy threats. What will happen next time we’re in this situation? What will happen if the tribe community feels like this decision was unjust? Will we dilute the Tribe or misuse the DAO’s funds to appease them?
In all seriousness, what would happen if a terrorist organization made an explicit threat to commit a heinous act unless we sent all of the PCV to an address in their control? Should we?
Of course that’s a considerably more dire scenario than the one we’re in at the moment. But it’s alike in quality. A subset of the community that made a mistake is threatening to wreck the protocol’s prospects if we don’t capitulate to their demands for an unfair remuneration. Should we?
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That will only be fair if fei holder get their exit price in eth not usd otherwise tribe
holders just performed a nice haircut to genesis participants for free.
Brother, this is lucid! I wish we could have a watching party. 
It’s rather amusing that only you have pointed this out. Maybe you’re the only one that’s figured it out.
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Hmm. I’m thinking this has a relatively easy solution if the founders are privy to it. They can abstain from the snapshot vote and heavily favor the on chain vote in whichever direction the snapshot vote took. I say this lamenting that we might miss the sight of another gamification.
1 fei = 1 USD = stronger tribe.
@oecan-x happy for you and hope you don’t sell all fei to eth.
Tks @rockatansky !
I think one possible solution would be to calculate the value of this airdropped TRIBE and discount of $1. This is what I have done here:
It seems that redeeming Genesis Participants by around $ 0.9 per FEI would be fair and more simple than requiring ppl to buy TRIBE.
I think we should use the ETH price from Genesis. We are not redeeming ETH, but FEI. Investors wanted to be exposed to a stablecoin, not ETH when they invested. I consider that in the above calculation.
I also made calculations about the impact for Fei Protocol If we have a 60% of FEI being redeemed:
Source: Impact Evaluation
How is this a nice gesture to one person while the rest of the community is suffering? I have over $250K invested in Fei protocol with 80% preswapped? Please use the 75% of the PCV (~350,000 ETH) to buy both Fei and Tribe.
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This is genuinely great work. That being said, once again in this scenario, all the proceeds of the ETH appreciation go to the PCV and tribe holders, I don’t see which logic justifies that since Tribe holders refuse to assume the risk that go with the project. All in all , in this scenario this was all a free call option on eth from fei holders to tribe holders
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come on don’t be this selfish and call yourself “tribe elder” @oecan-x wrongly sent the fei to contract address which we are just sending back to him.
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Redeeming at $1 means those who came for the Genesis Tribe Airdrop are made whole on FEI and made a profit on TRIBE. While those who swapped for TRIBE are made worse off than they are today.
Given the TRIBE airdrop, a $0.90 or $0.95 redemption makes sense. This change has to get executed in tandem with 2 other actions:
- Resuming the incentive mechanisms: with a $0.95 redemption we practically set a price floor, we now need to work with other mechanisms to restore peg.
- Reward TRIBE preswappers who are currently holding, otherwise, FEI holders, the protocol, the VCs, and the team would all be in green except for the preswappers. This isn’t a good precedent.
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simply because few preswappers are not tribe believers. really hope the majority votes for 1 fei = 1 USD.
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I’m not sure if bringing in the arbitrageurs is a bad thing for the protocol. The goal was to have a stablecoin pegged at $1, and the market will forever work against the peg if the incentives are not aligned. Pricing below the peg will keep the market price below the peg, and the recovery process will be similarly grueling. Pricing at $0.9, the options would then be:
- Use remaining PCV to support the peg
- Additional auctions
- Wait and see
Essentially where we are now, with 1 FEI = 0.9 USD, smaller PCV, higher collateralization ratio, and likely disgruntled users. There remains no guarantee that the peg will converge towards 1 USD.
The TRIBE owns and controls this protocol.
Therefore the TRIBE should vote to do what is in the best long term interests of the protocol and right now that is:
- Preserve all PCV
- Fix incentive mechanisms
- Use some PCV in levered / force multiplied ways to push FEI price to $1 this plus fixed incentives should do it over a reasonable time window (3 weeks).
- Bring new code mechanisms into play based on data since launch and looking at other protocols.
- Provide a clear roadmap forward and message it loudly to the world.
Ignore all other noise. I vote #3 do nothing right now with PCV. We will get through this and find success in the end, hold strong.
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I’ve seen a lot of argument around who gained more, who lost more from what decision etc etc.
I just want to remind everyone that this is not about the past, this is about the future. For Fei’s long term success, the details of who got more or less from genesis+redemption is really minuscule compared the big picture.
This is about the reputation of the project, and the standing of Fei protocol in the DeFi community. It’s tainted now. And making the right decision (In my opinion would be a $1 redemption), would help restore the Fei protocol’s reputation and community standing.
DeFi isn’t a very big crowd, not yet. In our life time, DeFi is going to grow 1000x, or more, and I believe it’s going to take over the entire financial system. Trillion dollar projects are going to come out of this decade in DeFi, just like google, amazon facebook came out of the 2000s. We are all so early, we are literally the building the future. Among the people in the community, there will be the future Jeff Bezos and Mark Zukerberg, and more.
I am in this for the next 20 years. A 10%, or even 100% gain or loss on TRIBE does not matter. The upward potential in the long term far outweighs who gains what or lose what at this moment.
This like arguing whether to buy bitcoin at $20 and then selling at $10 versus $30. That literally does not matter in the grand scheme of things. Please zoom out, and don’t be lost in the details.
I just want to point this out, and please make the right decision that will help Fei’s long standing successs in the community.
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please be respectful and don’t call other names. I don’t think that we should focus on a case of one person. Use the time and energy on the bigger picture first and then go back to case by case. Don’t use this “nice gesture” as a way to push a different agenda.
FEI shiller: hey you want to buy our algorithmic stable coin, it’s super cool and innovative
Potential investor: yeah sure, looks great, I can sell it whenever I want for 1 USD, right?
Fei shiller: well, we had this genesis event and we are mad at some imaginary whales that may or may not exist for dumping or not dumping the governance token so it’s 0.9 now. Still good?
Potential investor: wait what?
Fei shiller: We had this event and then we voted and we discussed…
Potential investor: Bye!
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