TIP-121: Proposal for the future of the Tribe DAO

Proposals
15

There are some clear issues with this proposal:

The focus should be on the liability/creditors first then the equity/token holders. The execution should be done in stages, then the snapshot of TRIBE holdings should be given a specific date, 24 hours to 7 days in the past to compensate actual TRIBE holders that lost value from holding the token.

  1. Liability/Creditors

  • FEI holders: FEI holders should be given a specific timeframe to redeem FEI for DAI, after the timeframe, depending how much FEI is still locked in LP (e.g. Frax Finance etc.) the equivalent amount of DAI should be reserved for locked LP.

  • Fuse hack victim: If protocol FEI is not redeemable for backing, it is clear that the DAO can repay Fuse hack victims fully. This should be the priority before talking about distribution to TRIBE holders. The victims did not opt to receive equity/TRIBE tokens, they should be compensated first in whatever they lost, the proposal was passed to compensate the victim, the second proposal against compensation was influenced by the team.

  1. Partnerships
  • The next step is to wind down partnerships. Distributing tokens acquired through partnership is not optimal for partner DAOs for obvious reasons (incentive misalignment, illiquidity of partnership DAO LPs), there are also proposals passed on winding down partnerships, which should be executed first before this proposal.
  1. TRIBE holders
  • Any remaining assets can then be distributed to TRIBE holders. The snapshot of TRIBE holders should be a date in the past, for example, to the point before the price of TRIBE started going up minus any address that sold between the snapshot date and distribution date. Anything the DAO is able to recoup from the hack in the future can be distributed to TRIBE holders in the snapshot. There are transactions of large buys before this proposal being posted in a down market, it does not seem right.

There are good reasons why creditors > equity holders in tradfi and this principle should be followed in this situation to make all stakeholders whole. Equity/token holders should be the risk bearer of the hack theoretically since they get any potential upside of Fei/Rari doing well. Fundamentally, LPs (Fei/Rari users) would have been confident about the DAO’s due diligence on contracts and insuring products/services provided by the DAO in the absence of third party insurers.

Alternatively, the DAO compensates hack victims with protocol owned FEI redeemable for DAI, then Fei Labs can still step down, the community takes control over the DAO.

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