Reserve Stabilization

[Bruno]

I was in doubt between options 2 and 3. My decision making is considering: (a) What is “fair” for Genesis participants? (b) What is good for the long-term perspective of FEI Protocol?

From my calculations, buying FEI at 0.9 ( 1- the value of TRIBE Bonus) will respect the essence of the stablecoin concept, to keep your value constant, receiving the same amount of the money you spent. So FEI users could exit at 0% loss.

Although I liked the option of “Undo Button”, it would take more time to implement. I think we need to move forward. The opportunity outside is much bigger than the difference between the options we have right now. We have plenty of issues to vote, such as: (1) how to improve peg mechanism? (2) how to compensate Tribe long-term holders? (3) What if the ETH crashes? (4) New integrations and bonding curves.

If the community decides to pass option 2, minutes after the market will bring FEI price near 0.9. This will be good to PCV, because we will need to spend less ETH to bring price to 0.9. It is an expectation game. Very similar to how Central Banks work. A buying order from PCV at $ 0.9, will create a floor of $0.9, facilitating more integrations and FEI expansion.

Thinking about the impact of this proposal on valuation, I see that we would remain on healthy terms with a Circulating Tribe / PCV of 0.67. Due to the arb movements cited above, this numbers could be even better as people would not sell FEI to PCV, but sell in the market before. The estimated 50% selling adoption to PCV would be smaller. As important as the PCV, FEI volume and adoption, will be the main value drivers for TRIBErs.

Source: Impact Evaluation

TRIBEs value comes from FEI users. Protecting the PCV is important, but also protecting FEIs reputation and building trust about the protocol and our community is important. The way we deal with this initial problem will send a signal to the market if they can trust TRIBE or not. Providing FEI users with a fair, simple and acceptable solution would be good for our product, FEI stablecoin.

Following the rationale above and thinking in the long term, I decide to vote on option 2. I think buying at $ 0.9 is a middle-way solution for everyone. My vote is to solve this issue and start building the future.

[doze]

where can i see proposals and vote please?

[macu9999]

NO CHANGE is the only option

[Bruno]

Here: Snapshot

[artur]

We want tribe rewards and compensations.

[Eswak]

@Eswak

I’ll support exit at 1$ out of market (direct redeem from the PCV) only if 158 TRIBE per ETH are also given back to the protocol (effectively un-doing the Genesis for people that want out now).

The 1$ redeem from PCV kind of made its way in my head, because I agree this is setting a shitty precedent not to allow FEI holders to exit at 1$. But then I saw these 2 messages from @joey on the Discord :

< 5 ETH | 80% preswap
5-50 ETH | 60% preswap
50-500 ETH | 33% preswap
500-5000 ETH | 18% preswap
+5000 ETH | 27% preswap
[…]
This is the first time I’ve seen it. It makes me consider who would actually benefit from FIP-1.

Allowing redeem at 1$ is essentially small investors bailing out large investors for a short term profit, and I don’t like it.

We are building a stablecoin product, so eventually everyone will be able to exit FEI at 1$ anyway, it’s just a matter of time.

Moreover, I think there is some risk with the proposed EthReserveStabilizer implementation, see the discussion here.

For all these reasons, I voted “no change” on the snapshot vote, and I encourage everyone to do the same. 1$ exit will get sorted out, but we need more time.

[Christian]

No change, for sure.

This would defeat the whole system. FEI would become a laughing stock in week two. The damage to its reputation would be incalculable. Let the system stabilize.

But one thing I don’t get? Maybe I am misunderstanding something. Isn’t a price of $0.80 for a stablecoin supposed to closely imidate the price action of the USD pretty much the “wet dream” for anyone who wants to store money in a stablecoin?

The system is designed to bring FEI up to near $1 on the medium run, right? So if I buy FEI now, I will eventually gain 20%… on a, forgive the language, freaking stablecoin!!

This should cause an interest in FEI, more demand drives FEI up automatically, and once surplus demand (beyond $1 price action) is created, also TRIBE will go up while FEI will go down to $1 again (if understand the system in its rudimentary form correctly).

So where is the problem? Why should these apes be given a dollar or 90 cents per FEI in the first place?

I am holding TRIBE, and I also have to take the risks within the design of the system. Who is returning my lost 50-65 % to me? The solution is easy, I’ll hodl.

Honestly, FEI whiners, grow up.

[nhokhachi]

good to do it i hate eth fee to hight

[Soapland_Tencho]

Let people trade in an experimental stablecoin for $1 because the experiment failed? No… FEI holders knew the risks. Let’s have a vote to just split PCV amongst all the $TRIBE holders.

[Brisket]

Such a good idea! Hey soapland why don’t we try to gather 51% of tribe and split the ETH between us. Now that we got the fei holders, do we really want to share the bounty with the useless 49%…

[Christian]

On the contrary, switching FEI to reserve stabilization after only two weeks will make FEI a laughing stock. The consequences cannot even be foreseen. It practically would end the project, because then we are no different from DAI.

What needs to be done now is to give the system simply time to stabilize itself. The system has been designed to use market techniques to bring FEI up again to $1.00 +/- 1%. If it can achieve this in this difficult situation (caused by human failure, i. e. wrong reward principles during Genesis) and even under the current selling pressure, then and only then trust in FEI’s mechanism will be fully restored.

In cryptocurrencies, in general, the best things usually happen if one does nothing and lets the market sort things out. FEI has been designed to return to ~1 USD. Everyone who buys FEI now will make ~25% on a stablecoin, and those who already own FEI, will have no losses if they hold.

Plus, FEI was never advertised as being zero risk. In addition, most of the TRIBE pre-swappers were small investors (< 5 ETH), while most FEI holders are whales (500-5000 and 5000+ ETH) who signed up to get a free airdrop on a stablecoin. The middle-class who currently has large losses (mostly TRIBE owners; down 65%) shouldn’t bail out the affluent who have few losses (mostly FEI holders; down 19%). That’s morally despicable.

It can later be discussed what should be done with additional available funds (e.g. compensation or additional airdrops for those who were part of Genesis and kept their FEI and TRIBE until after the system became stable). But it’s important now not to intervene and to suspend system functions. FEI needs to save itself if we want that trust in FEI is restored.

Just my 0.02 FEI.

[sergi]

The reality is that FEI is oversized and the only way to adjust the protocol is by allowing FEI holders to exit either at $1 or $0.90 FEI. Once the supply of FEI has been reduced, sell pressure will be gone, FEI will have a chance to stabilize around the peg.

Only then, it will be possible for FEI to be used as collateral in other DeFi protocols.

That will create organic demand for FEI and help in maintaining the peg.

Those who vote “no change” are only extending the pain and make it more difficult for the team to stabilize the protocol. Plus, it doesn’t make any sense to protect PCV because it will decrease anyway in future reweighs. It’s way better to do it once and for all.

Vote for $1 or $0.90 FEI. No regrets.

[omg]

Don’t think this as redemption, or refund.
Think about what we are trying to solve to move FEI/TRIBE forward.

We want to reduce FEI circulation, hence we need to get FEI in and burnt them.
since FEI is peg to $1, it make sense to offer $1 for people to return their FEI.

1/ We get to reduce FEI circulation, easing the selling pressure due to immature FEI ecosystem at the moment, as we need time to build.

2/ Offer at $1 also help to bring the price back closer to $1, we need arbitrager to pull the price back.

I expect the first 300k ETH FEI to be redeemed very fast, but 2nd 300k ETH, would be slower. Because from the 1st redemption to the 2nd redemption, we would have more partnership, and other things going.

Stop thinking about TRIBE vs FEI, and what is fair price. Why this group of people benefit and not me, and this group has higher risk vs other group, and etc. We should think about FEI/TRIBE as a whole, and how we can proceed the original vision to become a defi stablecoin.

[moraka]

You are wrong to be thinking about whales. Most whales are voting for ‘no change’ because that helps them the most actually.

[Tribe1]

You forgot to mention that Amazon didnt write in BIG LETTERS:RETURN WITH PENALTY BELOW PEG

bad example

[Tribe1]

People bought a project in its infancy. Therefore the acepted the risks associated. When they have no patience/believe, they can sell at loss anytime. Like they knew first hand when they were able to read…

[lovemaila]

hope team do the best project. to the sunshine

[imtrang]

be a parter with binance is good for prject

[Choochoo]

There are alternative ways that data can be interpreted:

1. People are more willing to take more risk with small amount of money and are more conservative with larger sum of money.

2. With more funds committed, it’s likely that more time is spent studying the protocol and genesis mechanism. It’s not hard to reach the conclusion that the genesis is over-subscribed and large drop in TRIBE price is likely after genesis. Therefore it’s better to buy TRIBE after the initial drop.

The pre-swapping is not necessarily an indication of commitment to the protocol, but rather a risk profile.

In other words, here is an alternative interpretation:
Not allowing $1 redemption is to favor recklessness, and punish prudence and carefully studying the genesis mechanism.
Let alone leaving a bad taste in everyone’s mouth.

[kagan]

@joey, You say: “Ultimately, TRIBE holders are responsible for the FEI peg, and the long term vision of a scalable decentralized stablecoin is the top priority.”

But is that the top priority of TRIBE holders? Are TRIBE holders selflessly here to support a scalable decentralized stablecoin? Or is the top priority of TRIBE holders to maximize the value of TRIBE? Are those the same? It’s at least arguable that those two goals are not the same.

This Reserve Stabilization approach seems like a big risk for TRIBE holders. You’re giving away a decent amount of the value that TRIBE controls. What’s in it for TRIBE holders? Is this TRIBE holders sacrificing for the good of the whole? Is this the best way for TRIBE holders to maximize their value?

Why not give all the ETH to the TRIBE holders? Or maybe they should get part of the reserved TRIBE tokens?

I may be misunderstanding something, but if you want TRIBE holders to vote for this, you may want to see the situation more from their point of view and explain to them what they get out of it? The current sales pitch for this approach seems more like asking for TRIBE holders to sacrifice, when so far, TRIBE holders don’t have much reason to be trusting or eager to sacrifice.

Hope that helps.