I’m glad to see so much engagement from the Maker community because adding FEI is not strictly positive, its more of a give-and-take arrangement in terms of the benefits to each side.
I largely agree that this integration is early, and given our upcoming v2 we will focus on that rollout and come back to MakerDAO after a successful launch in a few months. I’ll go ahead and address many of your concerns here:
- Adding FEI to the PSM will stabilize FEI not DAI:
This is not in dispute at all. By adding a non-zero spread MakerDAO would profit off of FEI volatility in exchange for this extra stabilization. Framing this as a “peg stability benefit” to MakerDAO is incorrect, even though the name is PSM.
We plan on announcing V2 very soon and updating our docs accordingly. FEI will be redeemable for PCV collateral with a spread (50bps in the case of ETH). This part of V2 is currently live on-chain.
The token is not changing, it is mostly an additive upgrade for managing the scenarios where PCV is undercollateralized and algorithmically rebalancing asset allocations.
This seems totally reasonable
FEI will always be collateralized over a governance controlled-target which will likely be 100% but could be slightly lower. DAI can be kept below a certain percentage. Any ERC20 is open to be added by TRIBE holders. PCV would algorithmically shift towards stablecoins as it gets closer to 100% collateralized, and if it gets under then TRIBE will inflate similar to MKR.
To be clear, Maker adding FEI would both decrease the centralization of DAI and increase the centralization of FEI. I see this as the clearest mirror to FEI gaining additional stability at the expense of additional risk for MakerDAO.
The Fei community is actively deepening its usage of LUSD and RAI as collateral. DAI is currently the most liquid and trusted decentralized stablecoin, but other alternatives are growing fast.
A full-blown PSM would make the most sense given that FEI is a stablecoin and demand would be almost 0 for a normal vault.
We will aim to get a broader opinion as we roll out V2 to see if the Maker community has any interest at that time.
Thanks everyone for the engagement so far! Truly impressed by the thoughtful and diverse perspectives being brought to the table