Forum Discussion

https://tribe.fei.money/t/fip-2-fei-redemption-tribe-staking/3033

Basic Summary

This proposal aims to unify FEI and TRIBE holders around the common goal of FEI’s long-term stability and success by:

• Offering $0.95 redemption of FEI using 300k ETH from PCV, delivered in batches to the ReserveStabilizer contract in hourly batches of 5000 ETH
• Doubling staking rewards by allocating 100 million TRIBE to the existing FEI-TRIBE staking pool, linearly decreasing over two years

Motivation

This proposal aims to create strong peg support for FEI at a $0.95 floor. It creates a tight range in which reweights and direct incentives can operate once reinstated. It also increases the effective collateralization ratio of the protocol. TRIBE voting to support FEI will restore confidence in FEI’s peg and the community behind it.

This proposal strikes a balance between the effective exchange rate of the “simplified undo button” proposal and $1 redemption for FEI. Reweights and direct incentives can operate more efficiently with a smaller gap to close in subsequent proposals.

The allocation of an additional 100 million TRIBE from the DAO Treasury to staking rewards is an essential part of this proposal with multiple objectives. It offers TRIBE holders who believe in the long-term potential of the project a way to significantly increase their stake in it. Additionally, it generates demand for FEI, which helps support the peg and retain PCV.

The amount of ETH (300k) is intended to be able to redeem all non-staked or timelocked FEI even with a drop in ETH price. Dripping in the ETH in hourly batches of 5000 ETH intends to:

• prevent a supply shock to the market
• decrease the profitability of attacking the oracle
• allows the contract to be paused by the Guardian in the event of an issue without exposing all of the allocated ETH at once

The dripper will not be able to drip if there is still at least 5000 ETH in the contract to protect against leaving a large reservoir of ETH in the reserve stabilizer. This again decreases the profitability of attacking the oracle.

This proposal also includes returning of Ocean-X's FEI from https://etherscan.io/tx/0xdcfe606b9ed3acc596b8a2b58a1e3fd8b0b6be343526e4d6ed861f52b83850e0.

Specification

The EthReserveStabilizer implementation would be deployed with a $0.95 price relative to the oracle. The EthPCVDripper would point to the reserve stabilizer with parameters to drip 5000 ETH every hour through an open drip() function. It would be seeded with 300k ETH which could be withdrawn back to the DAO.

The steps included in the DAO proposal:

• Grant the Timelock the PCVController role indefinitely (to allow PCV movement through governance)
• Withdraw 300,000 ETH from the EthUniswapPCVDeposit to the EthPCVDripper
• Set the EthReserveStabilizer to a Burner (so that FEI transfers don’t need approval from the caller)
• Grant the Timelock the Minter role indefinitely (to allow DAO payments in FEI)
• Send 127,629.12841 FEI to 0x6a595d87edd494c6d0fd1e80c1aeee52e22bab66 to effectively undo this transaction: https://etherscan.io/tx/0xdcfe606b9ed3acc596b8a2b58a1e3fd8b0b6be343526e4d6ed861f52b83850e0
• Send 100,000,000 TRIBE to the FeiRewardsDistributor contract from Core (the DAO treasury)

Voting Rules

Voting will last 2 days ending on Friday, April 23 at 4pm PT

This is a non-binding signal vote. Please keep in mind that snapshot votes can be changed but not withdrawn until the end of the voting period.

The two options to vote on are:

Yes No

If this vote passes with a Yes majority, the specified changes will be submitted for an on-chain DAO vote.