1/ The Rari Fuse Hack Payment has passed on-chain to FULLY pay the victims in 24 hours.

This is a big moment in these final governance decisions of the Tribe DAO.
Hacks are brutal for everyone involved, and this has weighed on myself and the community for many months now.

This positive closure gives us an opportunity to reflect and take away lessons for DeFi.
The discussions have largely underplayed the complexity of the situation. This led to a more polarized understanding of the tradeoffs at play.

It's hard for DAOs to agree on matters much smaller than this.

The way the community came together on this was powerful.
The biggest lesson here is that DAOs should not have to make decisions like this after the fact. An explicit upfront policy, ideally with on-chain enforcement, would have saved the DAO from needing to venture into uncharted governance territory.
This is a broader challenge of PCV. When DAOs hold material non-native assets, the scope of how to use these tokens is an area where we need to develop strong norms for the industry (with on-chain enforcement).
I hope everyone can take away these lessons and know that all of the stakeholders truly did their best in an unprecedented situation.
Only a few governance decisions remain now for the Tribe DAO over the next couple weeks.

I am looking forward to applying all of the experience gained from the Tribe DAO to help advance the mission of DeFi.

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More from @joey__santoro

Aug 20
Thank you everyone for the feedback, and the patience these past couple of months. A couple of clarifications:

1) This is just a proposal. The community will decide how best to balance the needs of all stakeholders. These discussions are an important first step.
2) Everyone involved in this proposal is a long term player in the space and wants to do the right thing by all stakeholders.
The major points of discussion on the proposal are becoming clear. There are a large number of variables which makes providing exact numbers difficult today.
Read 6 tweets
Apr 11
The Tribe DAO builds permissionless DeFi primitives, including Fuse.

Leverage is no joke.

The Ichi pool is an example of what can go wrong when pool operators or users mismanage their positions.

Some rules of thumb 👇
Debt is backed by overcollateralization. Fuse relies on third parties to “liquidate” or sell off the collateral when it gets close to not backing the debt.

Lenders can lose their entire principle if liquidations fail.
If the collateral is illiquid or esoteric, this makes liquidations difficult to execute safely.

Either there isn’t enough DEX liquidity to sell, or liquidator bots don’t know how to sell because it requires custom logic.
Read 11 tweets
Apr 3
Fei raised $1.3 billion one year ago today, the biggest DeFi token launch in history

And then everything broke

A thread on painful lessons learned, and an epic comeback that isn’t done yet 💥
1/ First, the setting. Early 2021.

ETH was ripping off the back of DeFi summer. Crypto began to feel inevitable. New projects (especially algo stables) were launching with FDV in the hundreds of millions and billions.

The only word I could use to describe it was frenzy
2/ Those algostables were not sustainable and eventually failed (ESD, BAC, etc.). Fei was made to solve those issues

Protocol Controlled Value was the biggest idea. When algorithms and governance own the reserves directly, DeFi protocols could build unforkable moats and scale 📈
Read 15 tweets
Jan 28
Announcing Tribe Turbo, a new DeFi primitive which allows any token to become productive and provide FEI liquidity at no cost to the markets that need it most 😱

How is this possible? Let's dive in 🧵
Algorithmic stablecoins need to be backed by either reserves (PCV), collateral, or both to be stable at scale

Turbo is an evolution of the “overcollateralized stablecoin” mechanism (think @MakerDAO)
In Maker and similar systems, issuing new stables is coupled tightly with borrowing. i.e. to generate DAI, you need to pay a stability fee 😐

This creates an inherent cost to issuance. Turbo decouples the borrowing from issuance and actually PAYS users to issue $FEI 😱
Read 11 tweets
Jan 23
The playbook for how to gracefully ride a bear as an algostable protocol, even with majority $ETH backing 📖👇
First, what is an algorithmic stablecoin?

An algostable is a synthetic representation of credit against collateral or PCV. It has value so long as a primary or secondary market supports that value.

This can be a USD like $FEI, $DAI, $FRAX, or nonpegged like $RAI, $OHM, $VOLT
Protocols like @feiprotocol and @fraxfinance are able to expand their supply into secondary markets to satisfy demand for leverage as the market rises

These protocol owned $FEI represent both an asset AND a liability to the protocol, so they don't affect collateralization..
Read 10 tweets
Jan 4
ERC4626 is a landmark interface for yield bearing vaults that will supercharge DeFi innovation ⚡️

On this rock we will build our empire 🏰

TLDR; adopt ERC4626 or ngmi

Here is what this interface means for the Tribe, and for DeFi generally 🧵
Where are we now? Yield bearing tokens of all shapes, sizes and implementations, no cross-compatibility.

Aggregators : @iearnfinance, @RariCapital Vaults, @idlefinance
Lending markets: @AaveAave, @compoundfinance, Fuse
Native yield tokens: @SushiSwap xSushi, @OlympusDAO gOHM
ERC4626 standardizes this paradigm of depositing and withdrawing from a vault denominated in a single token.

This makes it incredibly easy for aggregators and plugins, which now only need to implement a single interface rather than dozens of adapters 🤝
Read 9 tweets

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