[TCP] PCV Diversification Tribe

Context

DeFi is advancing at a high speed. In order for Fei to innovate and be competitive in this environment, we need decentralized structures working for the benefit of the community. Squads with autonomy and agility to go deep in some subjects, analyze alternatives and bring proposals to community decision.

Here we address the concerns regarding the concentration of PCV in ETH. To give details on this initiative, we are following the working group model proposed by Grant.

What are you proposing?

We are proposing the creation of a PCV Diversification Working Group for 3 months ending on 08/05/2021.

What is the core problem(s) you want to solve?

  • PCV concentration in ETH brings uncertainty about Fei Protocol ability to sustain the peg
  • Capital inefficiency of holding assets that are not helping on providing liquidity, generating yield or contributing to minimizing the risk

What impact will this project have?

  • Improve Fei Protocol’s ability to sustain the peg throughout the market cycle (ie: independent of price volatility). This will be important to encourage Fei usage and integrations with other DeFi projects.
  • Growth in PCV value over time leads to more collateralization of Fei, creates the opportunity to enhance TRIBE tokenomics in the longer term and enables the creation of new bonding curves.

What does this group aim to accomplish (objectives and key results)?

  1. Develop an investment policy and a risk management strategy for PCV (some initial discussions here)

Key result: a document with an investment policy and risk management strategy shared with the community

  1. Evaluate the alternatives and propose the mechanism and process to manage PCV (some initial discussions here and here)

Key result: a document describing the mechanism and the process and sharing the code to execute it

  1. Evaluate alternatives and propose the initial allocations to diversify PCV (eg.: the creation of a stable pool in Curve and Balancer, some initial discussions here)

Key result: document with the details of potential initial allocations and if necessary the code to implement them

The outputs from this tribe working group do not lead to a direct modification/upgrade of the Fei protocol. The outputs will go first to review from the community and then to community decision through voting.

How will this task be accomplished (methodology)?

Objective 1 - Investment policy and risk management strategy: Benchmarking investment policies and risk management strategies of institutional investors and DeFi; draft a proposal; discussion with community members; posting in the forum for review. Once completed and approved, this policy could be periodically reviewed and updated by the community.

Objective 2 - Mechanism and process to manage PCV: Benchmarking mechanism and process to manage treasuries on DeFi and funds from institutional investors; draft a proposal; discussion with community members; write the code, post in the forum for community review.

Objective 3 - Initial Allocations to Diversify PCV: Analyze the pros and cons of each option; contact teams from other projects, draft a proposal; discussion with community members; write the code (if necessary), post in the forum for community review.

We will start with objectives 1 and 2 in parallel. After completing them, we will go for objective 3.

What is needed to accomplish this task/project (proposed budget and use of funds)?

Team is initially composed by 4 people: 1 developer (@Eswak), 2 finance/DeFi experts ([@Matthew_Graham and @CountVidal) and WG leader (@Bruno).

The team combined experience includes working as institutional investors, limited partners in venture capital funds, private equity management, crypto treasury management and solidity coding. And more important than outside credentials, the team has already proven engagement in the community.

After talking with some community members, we decide to follow the model: work first and reward later without any defined budget. After seeing the concrete result produced by this tribe, the community can vote to reward contributors (eg.: paying with vested TRIBE tokens). We are interested in the long-term success of the Fei Protocol.

During this project, we are open to contributions outside this tribe. This group is just a way to better coordinate our efforts but needs to be deeply integrated with the community and other tribes (including other tribes building ideas related to PCV Diversification). If we receive valuable contributions that improve the products we are building here, we will propose that part of the reward should go beyond this group.

Working Group Leader(s)

Bruno Rodrigues

How will you report your progress to the community?

  • Biweekly forum post outlining the advances of the week
  • More frequent interactions and updates on the PCV Diversification channel in Discord
  • Present progress during monthly community call

Request for Feedback

Please leave comments with any feedback about these ideas.

Let’s build the future, together!

Do you support this TRIBE?
  • Yes
  • No
  • Yes, with modifications

0 voters

6 Likes

The first thing I noticed is this:

This is a very solid team.
@Bruno , we all know you have been a supporter since you joined the Discord. Later on, you became a shepherd and have done fantastic work in the economics channel.
@Matthew_Graham (Fire) and @countvidal also have been around since before Genesis and caught my attention with high-quality posts.
But would they essentially have the same role?
@Eswak has reviewed new code by the core team on github as well as proposing his own for the PCV diversification. All of this was voluntary. In my opinion, this is proof that if he gets compensated he would not disappoint.

However, the question being: Is a team of 4 good enough to manage a PCV as large as this?

How could we measure the success/failure of this period?
Also would you, as a team leader, take responsibility? (For example If one team member does not contribute, would you as a team leader be responsible to replace that person?)

Definitely a logical argument for establishing this working group. It outlines the urgency of the situation. :handshake:

If you truly succeed with this and manage to diversify the PCV, I think you should be greatly compensated. Using a part of the DAO treasury should definitely be an option. After all, it is in the interest of all community members to stabilise the PCV and to diversify it as soon as possible.

Great idea! We should leverage the skills our community (or even outside experts) has(have) to offer. To be honest, this is also where compensation might come into play. Let’s face it, some experts will only work if they get compensated. So once you guys set the bar, we can possibly get more people on board based on those compensations.

Thank you for starting this discussion @Bruno .

(Also maybe change the poll to a single option poll, so people can not vote “Yes” and “No”)

5 Likes

Tks for replying, Dio!

Their experience are complementary, one with more crypto treasury management experience and the other with more traditional finance management experience. We need to get the best from both worlds.

It is just a starting point. In my experience, groups from 3 to 5 people perform better than bigger groups as you have additional coordination costs. Anyway, the group will be interacting directly with other community members. The scope of this group is very limited and dont actually include managing the PCV. We are setting the structure so as the management part comes later. I dont believe PCV should be managed by a committee or a small group of people. We will bring ideas on that in the following weeks.

Excellent question! If we dont deliver the expected documents would be a failure. If we deliver and the community approves or approves with some changes I see it as a success.

As a team leader, I need to take the responsibility for it. If it fails, it is my fault, if it succeeds it is a team effort. In my view, the leader is just another word for coordinating multiple efforts to achieve results. If someone is not contributing, I would talk 1-1 with the member and if necessary could change. However, I don’t really think it will be necessary. As you pointed, the team is senior and very engaged with the community.

You can only choose one option I think. If you choose two the system dont let you vote. I tested here.

Tks one more time Dio for the questions. I am here to explain if you have further doubts.

6 Likes

@Bruno ,

Great proposal on the PCV diversification, and the team members selected gives a vote of confidence to the wider community that the decision-making and overall competency of the WG is in good hands. You have my support for the creation of the Group.

Now, a couple of questions:

  1. Where does the core team come into any of this? Would there be a forum (Discord or otherwise) that you will reserve with them (and that they will be committed to) to discuss the specifics of your proposals, including the economics, technical/viability aspects, adherence to overall Protocol strategic vision?
  2. Would there be a review period sometime during the tenure of the WG to evaluate the overall health of the WG’s activities and whether corrective action needs to be taken? (I would expect that this may take place in your monthly reporting regime)
  3. There are now competing proposals for a PCV management Tribe. While this would be a question posed to any WG proposal, in your case, how would you work with / coordinate / facilitate ideas with other members who may have similar ideas?

EDIT:

I would also propose that a performance-based bonus can be stipulated at the end of the WG’s tenure to incentivize the ‘work first, get paid later’. If the PCV management is a success I would vote grandly to compensate you and your team for it. Good luck.

3 Likes

Tks for the support, Acrology!

It means a lot for me as you are also very engaged in the discussions with the community.

In my view, it is very important the alignment with the core team, especially in this initial moment of the Fei community. So, we can have more effective initiatives. Even before Genesis, I have been exchanging ideas with them about the Fei Protocol. Here, it would be the same, through discord we will exchange ideas about how the group is advancing and collect some inputs.

We are going to report to the community biweekly through a forum post, but I think the real evaluation will come when we deliver the outputs. Before that, we are open to ideas/corrective actions and everyone can reach us easily in the PCV Diversification Discord channel. As we do not have any specific budget, what happens is that if the community does not see value in our work, we can dissolve the group and do not receive any reward.

I like this community energy and engagement. I think we need to foster it and hope it continues for the following weeks, months and years. We are open to talk with other tribes and people about the ideas related to the scope of this group. We will be here and in Discord, so it is an open channel. For sure, we are also going to proactively monitor other tribes related to PCV diversification and reach them if we see that there is something that could be valuable to our outputs here.

Tks for the support, I am very confident in this team! =)

2 Likes

I like the initiative. I do think there needs to be some sort of standardization if you will be compensating contributors outside of the working group. For example, why should a contributor trust that he or she will be fairly compensated for helping write an Investment Policy Statement?

Also, why is the timeline 3 months? From my experience in investment management (university endowment asset allocation, private equity, public equity), it seems as though 3 months is a long time for putting together an Investment Policy Statement, risk management strategy, and benchmarking. Is it the 3rd objective that makes this a 3 month long project?

If community members actively contribute, can the working group expand beyond 4 people?

Thanks for the post Bruno and appreciate your efforts.

2 Likes

I like the way you post your ideas as “a team”. The sooner PCV management starts the higher the value of Tribe will be… I suggest a monitoring body ( like @Grant, @Arcology, @Pavel) to keep track of your teams work.

Wouldn’t that be Bruno’s job?

If anybody should hold the entire team accountable, it should be the entire community and core team. :thinking:

4 Likes

It’s more like The team working on code and then having an audit. Weekly perhaps, monitoring WG will do the supervisory work without the PCV WG getting to far (in case of a dead-end months after) They will be both informing the Tribe.
Once entire team is ok, Fei Team and voting proceed. If one PCV WG member drops whatever the reason, monitoring will supply the replacement…

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One more thing before teaming up, if I am not asking to much, can we see WG cv’s posted?

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Yeah this will make decision making very easy. Like a simple one pager for the Discord and there could be a link which takes you to the much finer details on the forum.

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Hey @Bruno

Awesome to see this, in our conversations and here it is clear to me that you have put a significant amount of thought into this. I am fully supportive of the team you have selected as well, they have all proven to be excellent contributors to the project, and I cant wait to see the results of this Tribe.

Really like the cohesiveness here. Transparency is good esp. in regards to the PCV. I will work on establishing a dedicated place for updates to occur, perhaps we could even update via Twitter and other socials?

1 Like

Hey Ferdinand, tks for the points and for contributing with comments in an early version of this post.

Nobody in the group know how the community will value our work and if it will be fairly compensated. So it is everyone on the same situation.

After delivering the product, I think that it would be a good practice to bring the discussion with community in a transparent way about how and if the contributors should be rewarded. In this discussion, community can evaluate not only this tribe contribution but also the contribution from other community members. Considering all the inputs, we or other key token holder could submit to vote the proposed reward. What do you think?

It would be the limit date for all the working group scope, but we expect to deliver the most crucial aspects much faster than that. By crucial we consider the IPS in the following weeks and also a draft to make an allocation to a stable pool. We are focusing on these two aspects and then can think more deeply about objective 3.

I think it is possible, but growing besides 5 is not good for coordination and prefer to wait to see this first week. But the way we are going to work, everyone in the community will have space to contribute. The role of the group is to build a good first version. To reach the final document we will contributions from community.

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I agree with Dio message. We are going to be interacting a lot, we will not be “closed” group, but an open one with intense exchange with community. So what we are doing will be very transparent to anyone.

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High time that all the talk about diversification of the PCV got a little more concrete. :+1:

Love the team you picked here, I think 4 is a good size for the initial Tribe. You could expand on that if needed on a later point in time.

I agree with some other posters that a deadline of 3 months seems a bit long, but you’ve said in one of the comments that you plan to finish obejctive 1&2 much earlier than that. How about 2 or 3 deadlines, that can act as a sort of roadmap and will make sure the important objectives get done swiftly?

Really like this part, transparancy is key for maintaining the good faith of the community. With this you guys should be good to go on that front.

As the idea is to be paid after the outputs are delivered, I dont see this as necessary. I would not like to set this precedent here, as for other working groups people would have privacy concerns.

I like the way we structured and I think it is fair, we are being rewarded by our outputs and not by our CVs. Our CVs will reflect in the quality of the work produced here.

2 Likes

Hey Siddarth, I didnt get this comment. What will make decision making easier?

I feel like this point is important to stress, as for me the whole idea of the decentralized work groups is to be able to contribute to the project and get paid for bringing in results, without having to doxx yourself.
If we take a look at the work groups of Index Coop, which the Tribes took inspiration from, we can see that it is not necessary to disclose a CV to bring in good results. Works just fine over there :grinning_face_with_smiling_eyes:

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Tks a lot for the support, Grant! The framework you shared about working groups helped to the structure here.

We are open for ideas. Maybe we could start with the monthly community call. I think most important in the beginning is to be transparent with the engaged community members in discourse and discord. After we have more concrete results, maybe we can think about Twitter and socials to collect further feedbacks. But it would be good to listen to others on this idea.

Tks for the support, Meertitan!

I think that after the first week we will be able to set these specific deadlines.

2 Likes