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Balancer Protocol

Balancer DAO Commits to DAO Agreement and Token Swap With Fei DAO In Unprecedented Move

Agreement and Token Swap aims to align the interests of Balancer and FEI and accelerate the collaboration between the DAOs.

On November 12th 2021, Balancer DAO and Fei DAO further aligned their interest through a DAO agreement and a substantial Token Swap totaling over $9,000,000 at current market value.

The vision for Fei Protocol is to be a highly scalable, fully decentralized stablecoin. The upcoming V2 of Fei will utilize a custom Balancer V2 Investment Pools to manage risk, deploy liquidity, and earn yield with much greater capital efficiency. A complete overview of Fei V2 and the integration with Balancer V2 can be found in this blog.

This deep integration is projected to bring a large amount of liquidity to the Balancer Protocol and provide Fei with a trustworthy and efficient technology.

The agreement was discussed in the Balancer Forum and agreed on by the Fei DAO on October 24th, and the Balancer DAO on November 12th. Some highlights from the partnership discussion below.

Agreement Breakdown

Token Swap

To align governance interests, a Token Swap between the two organizations is initiated as part of this agreement.

200,000 BAL from the Ecosystem Fund was exchanged for the equivalent USD value of TRIBE and FEI in equal proportions from Fei DAO Treasury, using the 20 day smooth moving average price at the time that voting ends.

The Token Swap took place on November 16th, where 200,000 BAL was swapped for 2,598,000 TRIBE and 2,454,000 FEI.

Fei DAO will deposit BAL into BAL/WETH 80/20 paired with ETH from the PCV and commit to holding for the long run, possibly through meta-governance rather than direct liquidity provision.

Both organizations commit to holding the received assets for a period of at least 1 year, no on-chain logic will be implemented to ensure this.

The agreement was discussed in the Balancer Forum and agreed to by the Fei DAO on October 24th, and the Balancer DAO on November 12th. Some highlights from the partnership discussion below.

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 2 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! ~ Joey Santoro, Founder of Fei

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. ~Fernando Martinelli, Co-founder of Balancer Labs

Get involved in the BalancerDAO

If you are interested in supporting the development of the Balancer Ecosystem or want to build on top of the Balancer Protocol, this is your chance!

This article was written by the Balancer Grants DAO. For any questions message us on Twitter or send an email to grants@balancer.community.

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Balancer Protocol allows for automated portfolio management, turning the concept of an index fund on its head: instead of paying fees to portfolio managers, you collect fees from traders who rebalance your portfolio by following arbitrage opportunities.

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Balancer Grants

Balancer Grants

The BAL Grant program is one way BalancerDAO promotes the development of the Balancer Protocol and ecosystem.

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