🧊 [RFC] Whitelist & Utilize MTA for Tribe Turbo

Summary

This RFC would like to gather feedback surrounding the ability for the TreasuryDAO to apply to the Tribe Turbo Whitelist and subsequently add FEI to our existing Rari Fuse Pool in order to have users and the DAO be able to deposit and leverage MTA for whitelisted Yield Strategies from Fei Protocol in order to generate cash flows.

This is primarily done to utilize currently unused MTA in the treasury and create cash flows to make our assets more productive.

Abstract

It is suggested to allow the TreasuryDAO to apply for the Tribe Turbo Whitelist in order to subsequently add the FEI token to our existing Rari Fuse Pool and then leverage a portion of our idle MTA in the treasury to deposit these tokens for further use in the ecosystem by gaining the ability to borrow FEI from the pool at no additional interest, but for a split in revenue:

More information about this exciting new product can be found here.

This is particulary interesting because Tribe Turbo already accepts and encourages the use of ERC-4626 compliant strategies, which could have huge upside as we are deeply involved in this new token standard ourselves.

For instance, our own vaults could be one of these strategies in the future, making it possible for being able to effectively utilize our own product in a leveraged way, and therefore dogfood this opportunity with Tribe and create great rapport in the process.

An initial amount of 1M MTA is suggested, based upon initial timeframes and needs of the mStable Protocol for the remainder of 2022 and 2023.

Motivation

The TreasuryDAO currently sits on vast amounts of unused and idle MTA, and the new Tribe Turbo Product from Fei Protocol would allow us to deposit these MTA into our existing Rari Fuse Pool and be able to subsequently take advantage of this capital to create returns and cash flows that would benefit the rest of the mStable ecosystem in perpetuity, or until we pay back the interest-free loan.

Pros

  • Be able to utilize idle assets in the treasury and make them productive
  • Be amongst the first to leverage this incredible technology from Fei Protocol
  • ERC-4626 is built-in, which should make us extremely bullish by default

Cons

  • Leveraged MTA is inaccessible until the loan is paid back

Next Steps

It is suggested that the community comment on this RFC in the coming days, and bearing no significant opposition or change in ideation, we would move ahead with this RFC in the coming week and create a formal draft proposal on Github to be used for review.

Meta Governors are encouraged to provide as much feedback as possible until then, so we can create the best possible outcome for mStable and its users.

Generally in favour but I have a few questions.

  1. As I understand: Do we deposit MTA and borrow FEI that is directly deposited into a 4626 Yield strategy?
  2. What Strategy would it use?
  3. How does the recently Rari Fuse exploit affect this Proposal?

Seems like an interesting product and I am also generally supportive of this.

A couple of questions from me:

  • Would the MTA used need to come from the portion of the treasury that is not earmarked for future emissions? Or are you thinking that idle MTA for future emissions could be utilized? Not sure of the implications of bringing that ‘unissued’ MTA into the ecosystem, or if the level of risk would be acceptable here. Otherwise, utilizing $1m MTA from other treasury reserves seems manageable, but we should keep in mind that the total amount available here is much less that the full amount in the treasury.

  • Would like to understand what ERC-4626 strategy the borrowed FEI would be deposited into. Would also be good to understand what ratio FEI is borrowed/issued at and what happens if the value of the MTA collateral falls.

In favour of this sir @mZeroNine, thanks for this smart idea

  • I really like the idea of finding a use case for “about to be emitted” MTA. I wonder about the future distribution of these (one-off basis or streamed.) and how free we are to “play around” with them
  • I think we have to understand the liquidation mechanics of this esp with MTA this low (might have to put huge chunk of collateral and a liquidation would cascade the price down)
  • I think we can use it to leverage our own strategies (Metavaults) inside the FEI Turbo-Ecosystem

I quite agree. I have reached out to Brianna from FEI to answer some of the other questions in this thread and was hoping to get clarity and consensus first before moving this ahead.

What does everyone think about this? I think it’ll save headaches down the line if everyone is aligned and completely in the know how things will work out for both parties.

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Any update on this sir? :slight_smile:

Thanks for the nudge Herr Clochard!

I have pinged the Fei Team once again to see if they can help with answering some questions here and providing an overall timeframe on rollout after the previous Rari incident.

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Due to Tribe DAO being unresponsive, I’ll be putting this RFC on ice for now. As soon as I hear something back, I’ll let you all know! :sunglasses: