Proposal: FIP-33

Status: Last call

Summary

OTC deal where FEI DAO exchange FEI and TRIBE in equal proportion for 200,000 BAL (~US$ 4,400,000) form Balancer DAO.

Motivation

Balancer will play a key role in Fei v2 4. In the new version, PCV will be managed using a Balancer v2 Investment Pool. This has the potential to add PCV (almost $1B) to the Balancer platform.

As Fei v2 brings significant TVL to Balancer, it would be beneficial for both communities to strengthen the partnership through a Treasury swap.

DAO to DAO partnerships are moats, durable competitive advantages. DeFi composability works better when communities work together. Balancer is a highly respected and innovative project, the perfect fit for Fei Protocol, the main liquidity source for DeFi.

At the same time we diversify PCV by holding BAL, TRIBE will be into the hands of a long-term ecosystem partner.

Moreover, as our core operations will be in Balancer platform, it is important to have some voice in the governance discussion there.

Specification

Fei DAO will deploy an appropriate version of the Badger DAO OTC Contract as the one used in the Index OTC purchase 8.

200,000 BAL from the Ecosystem Fund would be exchanged for the equivalent USD value of TRIBE and FEI in equal proportions from Fei DAO Treasury, using the 20 day smooth moving average price at the time that voting ends. Price feed will be BAL/USDT (Binance) and TRIBE/FEI (Uni-V2) FEI/ETH (Uni-V2).

Fei DAO will deposit BAL into BAL/WETH 80/20 paired with ETH from the PCV and commits to holding for the long run. The Fei DAO will also be eligible to earn BAL rewards (currently at 22% APR) , which will be further held by Fei and possibly reinvested in the 80/20 BAL/WETH pool. Balancer DAO will be eligible to earn TRIBE rewards by participating in Fei’s incentivized staking programs (Uni v2, Rari, Curve, etc.).

In the context of the long-term partnership, both DAOs will hold the exchanged governance tokens for at least one year.

According to the discussions, this is just the first step and in 3 months, we will submit another proposal to swap more tokens.