OIP - 92 : Whitelist FEI as a treasury asset

balotelli45

Summary

Whitelist FEI as our next reserve asset to be accumulated through treasury rebalancing or bonds.

Background

Fei protocol launched around the same time as Olympus DAO a little over a year ago. After a rocky start, Fei Protocol made a few key changes to its initial design and has since then found stability. Fei protocol’s Protocol Controlled Value (PCV) currently sits at ~$736M in assets at time of writing - mostly composed of ETH (70%+).

This PCV can be seen as the backing of FEI stablecoin - as the protocol offers 1:1 redeemability with a 0.5% spread. As of today, User-FEI has a circulating supply of ~300M FEI, is highly liquid and the Fei Protocol has mapped a path to diversification of its PCV - with the goal of being able to better withstand market downturns. For example, Fei V2 uses Balancer V2 pools with algorithmically changed weights depending on FEI’s collateralization ratio to manage risk during volatile market conditions.

Motivation

The Treasury team has been exploring and evaluating multiple options for the next reserve asset and have reached the conclusion that FEI is the best candidate at this time. Specifically, one of the Treasury team objectives is to ensure that OHM’s backing favors decentralized and censorship-resistant assets. Fei protocol’s approach to issuing the FEI stablecoin aligns with our objectives - given it is backed by decentralized assets. As mentioned above, Fei intends to diversify this backing further in order to make it less correlated with the price of ETH.

The addition of FEI stablecoin to our Treasury would also further align Olympus and Fei protocol - extending opportunities to collaborate.

Proposal

The Treasury team proposes to whitelist FEI stablecoin as an asset for the Olympus treasury. Our exposure would be capped to a maximum of 10% of user-FEI circulating supply.

Learn more about FEI:

https://docs.fei.money/

https://app.fei.money/analytics

Polling Period

The polling process will end at 00:00 UTC on 4/15. A snapshot vote will then be put up.

JaLa

Very much in favor - as we scale our treasury, we will need to diversify our stable holdings. FEI v2 has proven to be robust.

After some reflection, my only comment would be to change the 10% cap to total fei supply rather than user owned supply.

Joey-Tribe

So hyped at this proposal and the growing partnership!

JaLa After some reflection, my only comment would be to change the 10% cap to total fei supply rather than user owned supply.

Would be good to use total supply as the cap as well, the vast majority of that supply is circulating in lending markets on Fuse etc and gives Olympus more flexibility.

z_33 Will this lead to potentially a tit for tat response from FEI, with them adding gOHM as collateral at some point? Will they commit to buying any amount of the bonds?

The Tribe DAO committed to filling 20% of all FEI demand generated by Olympus DAO through bonds or other mechanisms and OHM is already in protocol reserves after the recent treasury swap

Mark11

Ye - FEI gonna be key piece of Balancer eco to earn those sweet Bal rewards

Shreddy

Fei has come a long way as a protocol and I support us taking in $FEI to help diversify our basket of risk-free treasury assets. Their commitment to PCV & using Balancer's V2 pools falls squarely in line with our own values as a protocol and I am always happy to hear about more decentralized assets coming into the treasury.

dr00

This is exciting. Have been very bullish on FEI as an asset since I witnessed their team persevere through their initial launch pains. They recovered peg, which must have been no easy feat.

I'm 100% in favor! I love diversification.

stratabatta

In favor - healthy diversification, trusted team

arnoldcogwell47

In favor of adding Fei as a treasury asset allowing treasury to -

-use fei as a productive asset as an LP with Tribe-Fei, balancer deposits, tokemak single side stake

-offer fei reserve bonds to bolster treasury

-supply fei in lending/borrowing markets

z_33

Will this lead to potentially a tit for tat response from FEI, with them adding gOHM as collateral at some point? Will they commit to buying any amount of the bonds?