I can't stand to not speak up about this @feiprotocol situation. Please read this 🧵 for one of the most egregious "DAO/DeFi" situations I've ever seen. There's CeFi drama stuff, but this is a new low for DeFi.
Some background on what's going on: In late 2021 Fei Protocol (the stablecoin) did a merger with Rari Capital DAO (developers of the Fuse money market). The merger passed overwhelmingly & $RGT tokens became $TRIBE tokens effectively sealing the deal. tally.xyz/governance/eip…
In late April 2022, the Fei-Fuse money market was drained due to a reentrancy bug. Many early adapters of Fuse lost millions. @fraxfinance a huge FEI/Fuse backer+lender+user lost ~$13m. @OlympusDAO lost ~$9m. The total hack resulted in nearly $80m lost.
The FEI/TRIBE DAO had 100s of millions USD in excess PCV at this time & held a governance vote where TRIBE holders voted overwhelmingly to reimburse all victims of the hack. They were applauded for this exemplary & ethical move. I sang their graces. snapshot.org/#/fei.eth/prop…
Then weeks went by...🦗..no repayment. Then in May/June 2022, the crypto markets took their infamous downturn. Then FEI emerges with an insane proposal: "Let's do the repayment vote over again, the last one didn't count." The egregiousness of this is wild & absolutely ridiculous.
Of course, as you might expect, to no one's surprise the vote does not pass this time...the repayment of victims is off the table now.
@cobie had a good thread explaining it below. The gist of it is clear: FEI didn't want to repay victims because their stablecoin peg & treasury value was dangerously low. While passions were high, their supporters (including us at FRAX) were patient.
I even personally posted in the thread where they renegged on repayment, and I promised that any repayment to FRAX would permanently go to providing FEI-FRAX liquidity to bolster their peg. They'd be repaying FRAX AND STRENGTHENING THEIR PEG. Silence. Not even 1 reply. Image
I tried multiple times to reach out to @joey__santoro since June. No response. FRAX was on of their earliest supporters. I've met them all in real life. Nothing now. Not even a post mortem discussion/call with us after renegging on governance vote+repayment to all victims.
To his credit @JackLongarzo did speak to me in detail but when I asked for a meeting to discuss with him+Joey...silence...

Then today...the FEI team comes out that they're winding everything down. So what about the repayment of victims now that there's an orderly shutdown?
FEI has more than enough PCV to redeem every stablecoin at peg, repay every cent to victims, & STILL have ~$65m in value for $TRIBE holders to redeem & profit. But what are they doing instead? Giving FRAX, Olympus etc cents on the dollar leaving victims with 95% hack losses.
Take a look at this, curtesy of @dcfgod. If FEI repaid every hack victim, redeemed all FEI at peg, then distributed the remaining treasury pro rata to TRIBE holders, TRIBE would be worth $.16 with 10s of millions USD value given back to holders. A graceful & perfect sunsetting. Image
Instead of the above, they're planning to do this 👇 They're preposing repaying FRAX 2% of $12.3m lost. 3% of @OlympusDAO's $8.9m lost. And just 19% & 27% of @BalancerLabs @VesperFi losses respectively etc. Why? How does this make any sense other than fraud? Image
An honorable, ethical, & respectable shutdown of a DAO is literally perfectly here. The money is there. The full repayment, the perfect peg redemption, & moral precedent is possible. I truly don't understand how it's possible to look at this, then decide "Na let's take the rest."
This post in the Tribe forums resonates greatly. It straight up calls them out for simply wanting to keep more money for themselves at the expense of their early backers+friends solely because they probably think they can get away with it (they won't).

tribe.fei.money/t/tip-121-prop…
This is truly one of the most mind boggling situations I've seen. Outright fraud, blackhat hacks, scams/rugs are obvious. Difficult situations are also obviously difficult. This....I don't understand what this is other than WTF. This is a public VC backed, tier 1 project..
Their investors include @hiFramework @a16z @nascentxyz among others. I've personally done nothing but try in good faith for many months to resolve this and in the end this is what FRAX gets for being one of their earliest backers and supporters. No good deed goes unpunished.
Is it really worth the FEI/Rari team doing this to their bright careers in crypto for a couple million more dollars? There's still time to take feedback & fix mistakes so everyone can move on in peace & give respect+credit to FEI/Rari for doing the right thing in the very end.

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More from @samkazemian

Apr 2
Alright it's time for the FRAX UST 4Pool thread you've all been waiting for!

🧵
So how did this big move come about?

Most people don't understand Curve. They think it's a DEX with less cap efficiency than Uni v3. Wrong. Curve is the "fiat savings account" of DeFi. Forget all the middle iq takes "cUrVE fEeZ r Lez tHan CRV inFlayShon. CRV iz ponZu"
Don't believe me? It's literally the 2nd sentence of the Curve whitepaper SINCE 2019! The gigabrains at @CurveFinance planned this all along. That has been the ultimate master plan, although I doubt even they thought it would be THIS successful as a high yield, low risk account.
Read 13 tweets
Nov 2, 2021
Quick 🧵 on why every single stablecoin protocol will end up looking identical to @fraxfinance given sufficiently long time. #AllRoadsLeadtoFRAX

@MakerDAO launched their DAI minting module today. This is a bigger deal than most people think because it makes $DAI algorithmic.
The DAI Direct Deposit Module (D3M) mints fresh $DAI into @AaveAave for users to borrow. If too much DAI is minted and interest rate <4% then D3M contracts supply to target 4%. If rate >4% then DAI supply expands (algorithmically).

When designing $FRAX v2 we came up with the concept of an "algorithmic market operation" module. FRAX is minted into a selected protocol if $1.01 & contracted/burned if price is $.99. The abstract idea is to create composable levers for rebalancing FRAX supply instantly anywhere.
Read 15 tweets
Oct 18, 2021
There's a lot of buzz about "DeFi 2.0" and what it actually means. There's a misunderstandings since everyone wants to brand themselves as the new trendy thing in town.

A 🧵 on what DeFi 2.0 actually is and the protocols that qualify as DeFi 2.0
DeFi 2.0 protocols/designs bring more capital efficiency in holding assets on their balance sheet and deploy liquidity/stablecoins/assets/incentives through the hivemind of their token holders. Critics might say this is just "treasury management." I disagree.
To understand why, we have to understand the "Theory of the Firm" by Coase. Why do companies emerge? Why doesn't a company have market pricing internally? If Zuck tells his dev to code up a new feature, "why doesn't he say that'll be $500."
Read 18 tweets
Sep 26, 2021
I want to introduce a new concept from @fraxfinance called the Decentralization Ratio and how we've brought our fiatcoin collateral reliance to below 60% and soon <20% while keeping the tightest algostable peg.

A 🧵 on stablecoin decentralization
Some background, $FRAX is the only algostable to keep a perfect peg, never breaking once since launch in 2020. But a common criticism is that FRAX is just fractional USDC. Indeed, at launch, the only collateral that partially backed FRAX was USDC.
Even though our stability mechanism was novel. Before FRAX, no onchain stablecoin had consistently kept a peg without 100%+ collateralization. We now have an objective algorithm to measure how decentralized our protocol actually is.
Read 16 tweets
Jul 16, 2021
I want to introduce one of the coolest features we've been working on at @fraxfinance called veFXS gauges. Arguably the biggest innovation @CurveFinance introduced after their stableswap invariant was their gauge tokenomics. $FRAX is gauges on steroids 🚀

🧵
For those unfamiliar, users can lock Curve's $CRV token up to 4 years to vote on "gauge weights" that are tallied up every 7 days. Why is this a big deal? Each Curve pool has a gauge weight that signifies the amount of CRV token rewards it gets for 7 days until the next reweight.
People lock so much $CRV to control future emission with whales @ConvexFinance @iearnfinance @StakeDAOHQ vying for kingmaker roles. If you deposit stablecoins with them, they'll vote for the Curve pool that maximizes their APY. 74% of all CRV is locked on average of 3.7 years!
Read 10 tweets
Jun 3, 2021
This thread is about stability, money, and why maxis are wrong. If you only ever read one of my 🧵 make sure it’s this one

Let me tell you why BTC and ETH will never be money and what stablecoins are actually about. And how it's still $1T+ bullish for $ETH and $BTC. 👇
First of all, most people should know the dollar itself is loosely pegged to something: the CPI.

The CPI is meant to track a basket of consumptive goods Americans should always be able to buy with their $. It's debatable what should be in this basket, but let's move on.
The concept of creating money pegged to holding one's standard of living the same is not controversial. This is the subtle nuance that's missed by most people because they focus on the properties, not goal of money.

Money is about neutral constancy. It's the reference point.
Read 18 tweets

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