No matter how many redemptions we do, people will then only buy FEI to sell it at peg which happened in the Genesis and is the reason we’re here in the first place. We’ll be stuck in this cycle till PCV goes to zero.
This fundamentally makes no sense unless the FEI is undercollateralized and everyone decides to sell. Otherwise, when people buy FEI, it will push the price up and as long as not everyone sells, the PCV will not be drained. The FEI is actually overcollateralized so this scenario will not happen.
I don’t mean to be rude, but this fundamentally misunderstands how basic economics work. When people buy they will push the price up. You can’t buy infinitely at low prices. That’s the whole point of using the PCV to buy at $1.00, it creates a peg. The PCV will not be drained unless FEI is under collateralized, which it isn’t.
Can any redemption of FEI be on a sliding scale from say $0.90 to $1.00 but also require you to also pay in TRIBE, but the sliding scale of TRIBE payment is exponential?
For example, I want to redeem FEI at 0.9 but I pay 0.1 TRIBE, but if I want to redeem at $1.0, I have to pay 1 TRIBE?
The intent here is allowing the emergency valve for an exit but also allowing those who exit to directly pay TRIBE holders for this exit mechanism.
It will force anyone who wants to exit now to buy TRIBE, which creates a buy pressure, and will allow TRIBE holders to benefit.
All captured TRIBE can then be redistributed/airdropped or used for other projects by the Team.
In terms of reducing technical complexity and edge cases I think we should keep this open to all. I also think we can add the TRIBE collected back into a re-airdrop for Genesis participants or a staking pool
I was going to say this seems to unfairly exclude people who bought FEI after genesis to stake for rewards, or to restore the peg to $1 (using the buy incentives).
Am I understanding correctly that @joey you also believe it is unfair to exclude these parties?
Great idea, this is a direction. In the future, we may be able to provide two ways to redeem. One is reweight, the other is quick withdrawal but requires burning tribe.
This is like selling 1 ETH for 2000 USDC and 100 DAI instead of 2100 USDC, or selling a car and saying the buyer has to pay 50% of the price in dollars and the other 50% in Euros. The seller, which in our case are the TRIBE holders who control PCV, might as well just ask for the same amount in a single currency (FEI). This is why this proposal is essentially option 2 with a different price.
Of course, since FIP-1 is almost over and option 2 most likely will not win, it is no longer redundant to consider this proposal.
Here are my thoughts on the undo button proposal that has received some attention from FEI mods in the discord.
a proper genesis refund would require:
Any user who wants a refund must return All FEI and TRIBE including airdropped TRIBE. Meaning they must return 100% of the amount that was distributed to them during genesis.
all tokens received by FEI are burned. this makes TRIBE more rare, and TRIBE holders will control more of the protocol. There can also be an option to burn the presale TRIBE in proportion to the total amount refunded.
though the overall ETH collateral of the project would drop substantially, doing a refund would help tremendously in several ways
those that sold would have to repurchase TRIBE and FEI on the market in order to benefit from the refund as only entire amounts should be allowed. this would bring upwards pressure on the tokens to bring them back to peg
there will be arbitragers that will seek to make money off the difference in current price to the refund price, which means there would be upwards pressure on price for those who didnt purchase during genesis. this will create upwards pressure to bring back to peg.
the peg for FEI would be met and even exceeded as there were many people who sold their FEI at a loss and burned it to exit. this would mean that FEI would reach dollar parity and fulfill its stable coin roll, but its even possible for FEI to go up even more in price as there isnt enough FEI after the burn for those that sold to rebuy to get their refund.
after those that want the refund leave, the protocol will be at PEG and will operate at normal, and the community that held will have a significantly larger proportion of TRIBE for governance. HOLDERS WIN
everyone wins, the protocol starts with a lower stash of ETH but it will build naturally as it sees use as its peg has been restored and it will get much better.
Hello Siddhart! I think the difference is that in the Undo proposal we would have a direct buying pressure in TRIBE, as TRIBE tokens are required to redeem. In option 2, buying FEI at $ 0.9, we dont have this requirement to buy TRIBE. In this case, a buy pressure may come indirectly to TRIBE, as PCV would be bigger.
Most of the FEI holders already sold their TRIBE. So they will do the calculation.
If FEI Price + 7,6% x TRIBE Price < $ 1, they will buy TRIBE at the market and will redeem
If FEI Price + 7,6% x TRIBE Price >= $ 1, they will not redeem, and prefer to sell FEI in the market
If you open for non-genesis participants, FEI and TRIBE price would reach this equilibrium anyway. And every genesis participant or not could sell on that price. It is not clear to me now that allowing everyone to do this redemption would be bad for genesis participants.
Thank you for this proposal, that brings together a lot of the FEI/TRIBE current holders discontentment.
1/ I agree with you thinking the 1$ redemption for everyone rewards mostly:
(a) the people that buy in to take advantage of the airdrop (well too bad, it is currently not very interesting for most), and doing so are not contributing to the incentive alignment with TRIBE, therefore making it hard for the FEI stablecoin protocol to achieve its goal, not accepting now the DI consequences. No hostage situation should succeed with that.
(b) The one who did not follow the good old DYOR, and discovered the DI a posteriori, and will likely end up asking to get their Eth back at current market value (obvious overlap with my 1/).
(c) the one who are currently actively monitoring the situation to game it (the already mentioned many times cases) once it is redeemed at 1$.
2/ I agree on rewarding only the people from the genesis event (with the ideas already mentioned of tribe locked-period, etc.), only because of its potential as a short-term realignment of FEI and TRIBE holders. This division seems to stem mostly from the genesis event at this point in time, so I would support a proposition of this type.
But once done I don’t think we should ever talk about 100% TRIBE holders as the only legitimate actors of the community, this category should not be needed anymore other than “good for them, they can contribute to shape the protocol” - otherwise what are the future actual users of this stablecoin…
I hope this DAO will also get beyond the current inflated “(total) failure of the protocol, this is their fault, it is unfair, we’re being rekt” sentiments, and reaction based on those sentiments.
Digressing, a DAO allowing its contributors (I prefer this word than “members”, or any made-up category supposed to intangibly express the best for the protocol) to discuss and participate to propose upgrades, and it’s normal imo at this stage that it takes so much overhead.
(obvious overlap with my 1/).