[Proposal] Treasury Swap: Balancer DAO <> Fei DAO

I’ve chatted with some people from Fei DAO to add more structure to the swap and create a Partnership Agreement around it. Comment and feedback on the Partnership Agreement are welcome: Partnership Agreement BalancerDAO <> Fei DAO - Google Docs

Next steps

  1. Submit the proposal to Snapshot from Balancer’s side
  2. Update the Partnership Agreement
  3. Announce Partnership and Token Swap via Blog.

Hi @LuukDAO,

So according to the proposed agreement, FEI after the swap would deploy its BAL tokens into our 80/20 pool effectively turning their holdings into a yield generating asset (This will also dilute rewards for current LPs, concentrating more voting power towards a single entity). What about our TRIBE and FEI tokens? Where can we deposit those tokens to generate similar APRs? I struggle to see how this would benefit Balancer. Would already make more sense if they could offer similar conditions (current APR 22%) or lock their tokens without accessing our 80/20 pools.


I agree with @Andrea81 and would like clarity on this topic. Additionally, I feel that there are different states of how people are informed. I for example couldn’t find any meaningful information why this partnership has to happen. I can take the blame on me but I think the community should get more transparent info before we move to a vote. I would like to see following questions addressed:

-Why do we need this partnership?
-How do both parties benefit from this proposal?
-What is the long term plan?
-How are those treasuries managed?
-Why can FEI deposit LPBs in our pool and we don‘t get any equivalent alternative?

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I agree with your points @Andrea81 on the depositing of BAL vs. no deposit of FEI/TRIBE resulting in Balancer’s treasury not earning any yield. It seems like we should be eligible to stake at least a portion of the FEI/TRIBE to earn TRIBE. However we would be depositing to UNI. Not necessarily a negative, but wanted to highlight. Also, the reason I say a portion is due to the fact that their pool is earning 52.6% APR where the BAL 80/20 is earning 22%., but maybe that doesn’t matter and we are free to do what we like.

Screenshot 2021-11-06 125228

Those values will obviously change over the next year, so maybe the amount deposited is something that we discuss on a quarterly basis if we aren’t looking to deposit the full amount. In either case I don’t think we should be diluting our BAL holders for nothing in return (we also can’t pump more BAL incentives to the 80/20 pool to offset the dilution without impacting other pools), that sends a negative message to the community.

As for the questions about why do we need this partnership, FEI is moving a good amount of money into the Balancer ecosystem. A treasury swap sends an additional message that our relationship is longer term in nature.

lastly, there was the below point in the original post, so maybe this slipped through the cracks in terms of making an official point in the agreement

  • Balancer DAO is eligible to earn additional TRIBE by participating in Fei’s incentivized staking programs (Uni v2, Rari, Curve, etc.)

Joey from Fei here!

Would love to highlight this sentiment. Fei v2 has a substantial Balancer integration which will likely move 100s of millions of TVL over from our PCV including other DEX integrations. In the future this will likely be in the billions.

That alone should be a great signal of long term partnership.

In addition, the Balancer DAO will be able to stake TRIBE and FEI to grow their ownership in the FeiRari Fuse pool: Rari Portal or elsewhere. The FEI can be used to cover operating costs to avoid market selling BAL which could impact the price.

We are really excited to work more closely with the Balancer community and hope this partnership strengthens both projects!


I would like to echo @joey 's message by adding that not only is this partnership an opportunity for Balancer to grow its TVL by likely billions with Fei PCV, but also (and maybe even more importantly) that this will set a precedent for other DAOs and protocols to use Balancer in a similar way.

This is exactly the direction I was hoping for Balancer to take.

We should not see partners holding BAL long term as a conventional cost/expense for our ecosystem fund, this should be seen as an opportunity to have key partners like Fei staked in Balancer and interested in using and working with us more and more (e.g. possible future migration of Fei from Uni V2 to us).


Thank you all for your responses and insights. Some of my important questions have been addressed and I see now more clearly why we would want such a partnership. I am now in support of this proposal.


Hi, as stated previously this partnership agreement is a good opportunity to see multiple Balancer building blocks diffuse into further protocols. A few comments: The amount of governance voting power Fei DAO would be getting based on some of the last snapshot votes is big.

Grants wave 2 snapshot vote
the 200k BAL in the Fei DAO treasury would have quite some voting power.

For the approval of Grants wave 2 the Fei DAO would have been the biggest voter in terms of voting power, had the agreement been in effected and Fei DAO would have voted.

Staking vote
the 200k BAL in Fei DAO treasury would have even more relative voting power.

the address with the second-highest voting power in this vote voted with 60k BAL

Based on this sample set of past votes, it is clear that Fei Dao would have a high amount of voting power. This raises a key point:

  • How can Balancer ensure no conflict of interest between Balancer and the Fei DAO will emerge.

Say a future similar proposal with a Fei DAO competitor would be up for voting. This future partnership agreement would benefit Balancer but simultaneously strengthen the position of a Fei DAO competitor in the ecosystem. I see a potential conflict of interest here.

Echoing what I said in the beginning that i like this proposal. What do others think?


This is an extremely important point that should be addressed.
I would like to know how the 200k were chosen. If there is no obvious reasoning behind such a large amount: what would be an adequate value that would not raise any conflict of interest?


Hi @Mkflow27,

you raise a very important point and something that has always been a strong concern: the voting power of big wallets and how their vote can influence, in a way or another, final outcomes. This is not a new issue.

The main reason for LM distribution is to decentralise power by distributing BAL tokens. Any initiative that goes in the opposite direction should be extensively discussed.

While I fully understand the good intentions, I would encourage deeper risk-reward analysis.

I remain doubtful about the usefulness of the swap and I do not see how this operation can/should influence a continuous excellent relationship between the two protocols.


Good to see the discussions advancing in Balancer side.

This proposal is key to celebrate the partnership as structured in the @LuukDAO doc. The continuous TRIBE buybacks using LBP already started and there is so much potential in using managed pools for PCV.

The swap amount is similar to the one Fei did to acquire INDEX. It represents 1.84% of Balancer circulating mkt cap. So, there are considerable voting power elsewhere with other Balancer holders.

Another point to highlight is that Fei community is very open to work with other stablecoin projects. We participated in the Saddle Finance pool with FRAX, LUSD, alUSD, we opened a DAI bonding curve and PCV holds 100M DAI. We are now discussing acquiring some 100M LUSD and also a partnership with Angle Protocol.

We are not in a zero sum game with other decentralized stablecoin projects. DeFi together is stronger, the market is huge and it is growing fast.

I am a fan of Balancer and the decentralized way this DAO works, it is an amazing opportunity to strenghten the partnership between the two communities.


I understand the concern with the influence that 200k BAL tokens would give to Fei DAO, however I would expect that if there is a vote where there is clearly a conflict of interest, other BAL token holders should be more than enough to tip the balance and ensure what’s best for Balancer is approved.

We already had votes that had about ~1m BAL of quorum, I would imagine Balancer governance would be mobilized enough to get more than 200k BAL to win over a vote that poses a conflict of interest.

That aside, I think the major integration they are making with Balancer V2 should be a clear signal that they are betting on us, so voting for something that is short-term beneficial to them in detriment of Balancer would be against their own long-term interest. Balancer’s success as a platform will definitely influence the success of what’s built on top of it.

The amount of 200k has just been an initial proposal, as @Bruno said similar to what Fei did with INDEX (which is also part of the Balancer ecosystem).

We should be encouraging of such swaps because this is what gets Balancer to be supported by many different parties (especially knowing the Fei team and how serious and professional they are). This could be a precedent for other strong partners to get interested in holding BAL and participating in our governance and ideally ecosystem as integrations.

I said this in the past about the need to be more generous with deploying BAL from the Ecosystem Fund to grants and bounties that add value to the Balancer ecosystem, I’ll say this again in a similar way: the more strategic swaps we do like this, the more well connected and supported Balancer will become in DeFi. If we don’t, then I see a discouraging future where we will be isolated while other teams start acquiring stake/influence in other AMMs/competitors of Balancer (see this example with Curve).

A last good point is that by acquiring FEI the ecosystem fund would hold some stable value that helps diversify its current fully-long BAL position: that could prove very useful in a potential long bear market.


Thanks to @brianna for putting this together and pushing forward on cross-community collaboration.

Objectively, I am in favor of a stronger relationship between these two protocols. It’s clear that both Fei and Balancer are optimizing for governance as a cornerstone of their community. This swap feels like a great way to better solidify a long-term relationship.

At first read, it’s difficult to conceptualize how much USD value this swap is asking for. I would also clarify if this swap is meant to be 50% FEI, 50% TRIBE.

Lastly, I would be interested in exploring the human collaboration between both parties. While the token swap is a good signal, the real value will come for consistent collabs between the Ballers and Fei community leaders.

As a part of this swap, it would be good to set up consistent work streams for both teams to continually optimize and formalize areas for integrations and composability.

Fire Eyes will be voting in favor of this proposal.

Nice work!


I agree, I do not see huge benefits for Balancer here. Instead it seems like Balancer is giving an opportunity for Fei while staking its reputation on Fei’s stability. As far as I know Fei already had issues with their tokenomics at least in their beginnings. That isn’t to say they haven’t improved since then but why put our name on something with such a cost if we aren’t benefiting. Is there something we are missing, is there a benefit to our side here?

The concerns regarding voting power are also worrying and so while I would like to work with Fei I think there could be smaller less risk-prone steps that could be taken and such a decision shouldn’t be rushed into

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That is a really good idea. If Balancer members have interest, I could help from Fei community side to articulate a first meeting/workshop where we could met each other, understand how each community is organized and share some experiences in contributing to DAOs. We could also talk about the ways to incentivize community engagement and the experience with grants program. After a first contact, it can become more clear the next steps.


Ballers would love to do that Bruno :slight_smile:


Great, @DavisRamsey! I sent you a message in Discord to start structuring this. :slightly_smiling_face:

Hey Squidz, I think many people in crypto community still hold this first impression of Fei. Now with Fei v2 is time to tell what happened during this time and how the protocol is stronger now. I wrote an article about it. Fei Protocol’s PCV holds $1.19 B, providing a 403% collateralization ratio for all circulating FEI ($294 million). In other words, if all users redeemed Fei, the protocol would still hold a massive amount of $892 million.

If anyone want to read the full article: History and Future of Fei Protocol - by Crypto Kailash - Crypto Kailash


Thanks Bruno I may have judged too harshly. I will take a look at your article.
I believe there may be more benefits to Balancer than I originally doubted, but I am still nervous about the voting power imbalance that could result if this goes through.


The swap was successfully executed: Ethereum Token Holdings 0xd51dba7a94e1adea403553a8235c302cebf41a3c information

Great to make this first step to build a long-term partnership between Fei DAO and Balancer DAO!


When will Fei DAO deposit BAL into BAL/WETH 80/20 as announced?