The Tribe DAO strongly believes that a healthy and thriving DeFi ecosystem needs a robust platform (Fuse) powered by a liquidity engine (FEI) for unlocking the value of tokens through permissionless deployments of lending markets and credit facilities. We strive to deliver governance minimized and market driven utility for any asset in DeFi.
Launching March 2022
It can be difficult and costly for projects to bootstrap liquidity in stablecoins, which can be borrowed by their users. Lenders don’t want to deposit stables until there is an established market, and borrowers avoid pools with uncertain liquidity. Liquidity mining is a wasteful solution to this problem, as project tokens are better retained for more meaningful engagement.
Historically, Fei Protocol supplied several million FEI into verified Fuse pools, which were utilized by various DAOs (like ShapeShift) to borrow FEI against their governance tokens. These funds were utilized for ongoing DAO operations and contributor compensation, effectively making Fuse pools into a treasury management tool. Tribe Turbo brings these DAO-2-DAO partnerships to the next level.
Tribe Turbo uses a novel architecture on top of a Fuse pool called the “Turbo Pool”. Supported collateral types can borrow (issue) FEI (USD stablecoin) at 0% interest through “Turbo Safes”. The Turbo Safe ensures that the borrowed FEI is subsequently (atomically) deposited into a yield strategy of the user’s choosing. Users can optimize for interest earned or provide borrowable capital to users against protocol tokens.
Tribe Turbo enables DAOs (and degens) to issue FEI, at no cost, into a Fuse pool(s) of their choice, while benefiting from a revenue split with the Tribe DAO.
Turbo allows any DeFi token to become productive by sharing in the yield generated from a costless FEI line of credit.
Turbo also accelerates the lending liquidity on Fuse by separating the stablecoin issuance from market driven lending via Turbo. Initial FEI strategies will focus on delta-neutral strategies such as Fuse lending, yield aggregation, or stableswap liquidity provision. Any ERC-4626 yield generating vault will be eligible for Turbo, subject to TRIBE governance whitelisting.
Let’s consider Balancer as an example. The BAL token is a high quality and liquid collateral type supported by top lending markets. To use Turbo, a BAL holder, say the Balancer DAO, would:
1. Deposit BAL collateral to a Turbo Safe
2. “Boost” FEI (borrow at 0% APY) and deposit into a yield strategy of their choosing. Let’s assume this is a Balancer DAO owned Fuse Pool. Fuse is a Compound-style lending platform where any user or DAO can make and govern their own isolated market.
3. Users can now borrow FEI in the Balancer Fuse Pool, generating interest to the Turbo yield strategy. Collateral types can include Balancer LP tokens such as BAL-ETH and stETH-ETH. FEI interest rates in this pool are determined by market utilization.
4. All revenue accrued to the Turbo strategy is split between the Balancer DAO and the Tribe DAO.
Benefits of using Turbo for the Balancer DAO:
- Utility for idle treasury assets
- More FEI liquidity in the Balancer DAO Fuse Pool for users to borrow against long-tail Balancer ecosystem tokens
- Balancer DAO earns FEI denominated revenue split on Fuse fees
- No upfront or ongoing cost
Lending Liquidity Acceleration
Tribe Turbo is a killer use case where permissionless lending and decentralized stablecoins come together, and demonstrates the power of the newly merged Tribe DAO (previously Rari Capital DAO and Fei Protocol DAO). Fuse unlocks capital for long tail crypto-assets through permissionless lending markets, which isolate risk.
Turbo is the evolution of lending and credit, which simultaneously makes any Ethereum token productive and allows DAOs to bootstrap isolated lending markets.
Let’s talk about ways to give you a Turbo Boost, reach out to us on Discord or Twitter !