[BIP-85] Redeem TRIBE


title: [BIP-XX] Redeem TRIBE
status: Proposed
author: @llama - @Matthew_Graham
created: 03-10-2022


Summary

In response to recent events at Tribe DAO, this proposal presents the Balancer community the opportunity to redeem its TRIBE holding for a combination of stETH, LQTY, FOX and DAI after conditions of the pending veBAL transaction vote are met, [5]. Upon receipt the LQTY, FOX and DAI is to be converted to USDC.

Abstract

With Fei Lab announcing a 5th October voting date for the Tribe DAO veBAL holding sale and a positive voting outcome expected, Llama proposes Balancer DAO redeems the TRIBE holding for an estimated $640.5K after 1M DAI from the FEI Peg Stability Module (PSM) has been made available to the TRIBE Redeemer contract.

Balancer DAO holds 2.8M units of TRIBE in the Treasury which can be redeemed for 308.04 stETH, 6,729.56 LQTY, 993,593.68 FOX and 189,047.55 DAI worth an estimated $634,366.29 at spot prices, [1, 2]. After a successful vote and token swap between Tribe DAO and Aave Companies, Balancer DAO’s TRIBE holding will receive an additional 6,113 units of DAI when redeemed. This is based upon the 21.80 units of DAI per 10,000 units of TRIBE exchange rate mentioned by Fei Labs on Tribe DAO’s governance forum, [1].

As Balancer’s Snapshot will start after Tribe DAO Tally vote, Balancer DAO will be positioned to redeem TRIBE soon after the veBAL transaction is complete. Do note, Lama is in direct contact with Fei labs, Tribe DAO and Aave Companies and will be able to provide updates as and when needed. If the vote is to not pass in favour, then no action is to be taken.

Motivation

With Tribe DAO’s TIP-121 vote passing, the protocol has entered a terminal state as outlined below, [3]:

  • FEI becomes wrapped DAI, redeemable 1:1 and fully backed specifically by DAI
  • TRIBE becomes redeemable for a pro-rata claim on each remaining asset after setting aside DAI backing for FEI. Notably this excludes all TRIBE in the Tibre DAO Treasury

As Balancer DAO has already dissolved its FEI holding, only the remaining TRIBE holding needs to be redeemed for the underlying assets held within the PCV. The redeem contract for TRIBE token holders was deployed on the 25th September 2022. TRIBE can now be redeemed for stETH, LQTY, FOX and DAI, [4].

When Aave Companies has escrowed their 1M DAI, Tribe DAO will transfer 1M DAI from the FEI PSM to the TRIBE Redeem contract allowing TRIBE holders to access the 1M DAI immediately. Once this has occurred, Llama recommends Balancer DAO redeems the full TRIBE holding. The difference between Balance DAO redeeming now or after the additional 1M DAI deposit into the TRIBE Redeem contract is an estimated 6,104 DAI.

Once the LQTY, FOX and DAI assets are received, they are to be transferred to the Liquidity Mining Multisig where they will be converted to USDC then transferred back to the main treasury wallet. The DAI is to be converted to USDC via Maker DAO’s USDC PSM and the other assets swapped.

Further details can be found on Tribe DAO governance forum.

TIP-121: Proposal for the future of the Tribe DAO - #73 by FeiLabs - Proposals - Tribe

Aave Companies OTC Proposal for Tribe DAO’s veBAL - #4 by Eswak - Proposals - Tribe

Specification

Balance DAO Treasury Multisig connects through Wallet Connect to Tribe DAO and Redeem the max amount of TRIBE for the underlying assets, [4].

References

[1] TIP-121: Proposal for the future of the Tribe DAO - #73 by FeiLabs - Proposals - Tribe
[2] Balancer Analytics
[3] Tally | Fei Proposal
[4] Tribe DAO
[5] Aave Companies OTC Proposal for Tribe DAO’s veBAL - #4 by Eswak - Proposals - Tribe
[6] Creative Commons — CC0 1.0 Universal

Copyright

Copyright and related rights waived via CC0, [6].

2 Likes

Fully in support of redeeming our Tribe. This was the plan anyway but we were just awaiting the AAVE OTC to go through. Looking at the assets received, I propose we sell FOX and LQTY for USDC and convert the DAI to USDC 1:1 via the Maker PSM since we typically payout SP’s in USDC.
6.7k LQTY ~= 5k USDC
93k FOX ~= 3.7k USDC at current prices. It might be easier to transfer it to the Liquidity mining multisig to perform the swaps on the smaller assets (LQTY & FOX) so we don’t have to overcomplicate transactions on the main multisig.

Also, the image in the original post is off by a degree of 10x. Here are the accurate numbers

3 Likes

Thanks @Mike_B. The image and numbers are updated accordingly.

It makes sense to covert the FOX and LQTY holdings to USDC. They are non material small holdings and expenses are paid out in USDC. Pending further comments, we can update the post to reflect this in the coming days.

Not that it necessarily needs to be said, but I agree with @Mike_B’s assessment and proposal.

1 Like

In full support of @Mike_B proposed plan of action.

1 Like

The proposal has been updated to reflect the dialogue to date.

Added to the Summary Section:

Upon receipt the LQTY, FOX and DAI is to be converted to USDC.

Added to the Specification Section:

Once the LQTY, FOX and DAI assets are received, they are to be transferred to the Liquidity Mining Multisig where they will be converted to USDC then transferred back to the main treasury wallet. The DAI is to be converted to USDC via Maker DAO’s USDC PSM and the other assets swapped.

the LM Multisig takes on tax liability when we sell assets like this which is not ideal. Of course these amounts are tiny so I suppose it’s fine but something to keep in mind. The LM Multisig is not the trading arm of the DAO.

1 Like

https://snapshot.org/#/balancer.eth/proposal/0xd5d4c3f8960aed9e6f95497c6ad119c4305bd6f6c0f34270e4291941bb05dc31