In another thread I shared a the spreadsheet of the current state of the PCV :
Given the current macro environment and state of the PCV, I believe we should move much more aggressively on increasing the stable backing of FEI. This topic has been in talks for over a month now.
A lot of comments are going in this direction in the community.
Out of the 137,538 ETH owned by the DAO :
- 20,000 are currently being sold for DAI in a 2-day Balancer LBP auction
- 49,713 are in Lido (stETH). Please note that Lido is suffering from peg problems (currently 4%)
- 19,361 is in Aave
- ~18,500 in Balancer FEI/WETH pool (staked in gauge to earn BAL rewards)
- 16,389 is in Compound
- 10,000 are in Tokemak, and will become withdrawable after the 21st of June if TC executes a withdrawal request in the next days
- 3,115 are in the ETH PSM
If we consider Lido as illiquid (staked ETH is suffering from a depeg right now, and ETH staking rewards is the best income for the DAO right now), that leaves us with the reserves in Aave/Compound/Balancer/Tokemak to work with.
At the current market price of 1,544$/ETH, selling all 19,361+16,389+3,115 ETH in Compound/Aave/PSM (and considering the 2-day 20k ETH auction complete) would bring the FEI stable backing over 90%.
Over the course of next week, the TC can take action to prepare withdrawal from Tokemak and Balancer gauge, to make an additional ~28k ETH available and liquid for further action.
Following these actions, some ETH can be sold to finish bringing the FEI stable backing to 100%.
The privileges needed to execute this plan are :
- Guardian can move Aave+Compound ETH to the Balancer LBP, to be sold over the 2 days following the current auction (i.e. between the 13 and 15th of June)
- Meanwhile Tribal Council take actions to put Tokemak & Balancer ETH in a liquid position (week of 13-19 June)
- Around the 18th of June, Balancer position becomes liquid following the TC action
- Around the 21st of June, Tokemak position becomes liquid following TC action
- Guardian can take action around the 18-21st of June to move ETH from Balancer/Tokemak (as needed) to start a final LBP auction of 2 days that will bring FEI stable backing to 100%
While some of these might be Guardian actions, and these usually don’t go through governance, given the impact this would have on the protocol, I will publish this plan as a Snapshot vote over the next 2 days to gauge the sentiment from all stakeholders. This execution plan will also be subject to the approval of other Guardian multisig signers, and Tribal Council members.
We have an amazing community of builders and the potential for our product is incredible. These are bad times and it sucks to have to take such decisions, the time is not optimal (is it ever?) but I think it has to be done. The current collateral ratio is below 150%.