What's the deal with the TRIBE pool 2?

1

I’m failing to see how the incentivized FEI/TRIBE pool adds value or supports the underlying mechanics of the Fei Protocol. The extra incentives for this pool proposed in FIP-2 make me question whether the team understands the benefits (and downsides) either.

As a TRIBE holder, participating in this pool 2 means that:

  1. I need to take on risk by purchasing FEI in order to LP with my TRIBE.
  2. When the price of TRIBE goes down, I take on extra risk by purchasing more TRIBE.
  3. When the price of TRIBE goes up, I lock in losses by selling TRIBE at a depressed price.

If I choose to opt out of these risks, my TRIBE holdings get diluted and probably sold on the market at double the rate. FIP-2 is objectively bad for TRIBE holders, which is contrary to how it is being positioned by the team. So I have to ask, what are we trying to accomplish by incentivizing more liquidity in this pool? If the primary goal is FEI stability, we’d be much better off incentivizing a FEI/stablecoin pool. If the goal is to increase demand and utility for TRIBE, there are a number of alternatives that would accomplish this while mitigating all or some of these risks. Some options:

  1. Incentivize single sided liquidity pools for TRIBE using DEXs such as Bancor or DODO.
  2. Incentivize lending TRIBE and using it as a collateral asset on protocols such as CREAM or Rari.
  3. If we must incentivize a double sided pool 2, it should be TRIBE/ETH or TRIBE/DAI (rather than FEI). This creates better separation of concerns and reduces risk for TRIBE holders with a similar outcome. This can be potentially done in conjunction with an incentivized FEI/stablecoin pool.

Have any of these avenues been considered? I’d also love to hear any arguments in favor of the current approach.

7 Likes
2

One of the main points of this protocol is so that the team can get things moving again, and focus on working towards integrations, like you suggest.

I think moving forward, a Tribe/Eth pool would be great, it would give 100% pre swappers something to do outside of governance. I will forward these thoughts to the team :slight_smile:

2 Likes
3

I like this idea. Incentivizing a FEI/stablecoin pool will help the peg. It could also be explored the creation of a pool like that using the PCV.

We are increasing the buying pressure for both TRIBE and FEI, incentivizing a more aligned community with less rivalry between FEIs and TRIBErs, rewarding the ones believing in the long term of the project and that are providing a service (liquidity) to the protocol. Liquidity andthe peg are key to FEI success.

I think the goal is to increase the demand and utility for FEI. The consequence of that is a more valuable TRIBE because the PCV will be greater.