Fei Labs founder and Ethereum veteran Joey Santoro presented a proposal to convert FEI to DAI and transfer protocol-controlled value (PCV) to holders of TRIBE.
“The past months have been difficult for the Tribe DAO. These challenges and outcomes were not what anyone hoped for. After deep consideration, Fei Labs is proposing the following after considering all stakeholders. We believe this is the responsible path forward.”
The FEI architecture (FEI) would no longer be used, according to Santoro, because of “potential future regulatory risks.”
He suggested converting the current circulating quantity of FEI into DAI, which is currently the biggest algorithmic stablecoin.
If this plan is adopted, the TRIBE holders will receive the remaining PCV reserves, which will act as a stabilizer to maintain the 1:1 exchange rate between FEI and USD.
The severe effects of an attack on Fuse-based liquidity pools connected to Fei Labs and its partners from Rari Capital were another factor in the decision to shut operations.
Ignas, a DeFi researcher, further explains that the PCV vulnerability was the actual cause for the FEI team’s forced shutdown:
“Another reason FEI closed down was that the PCV model could not find a suitable product market. With low returns and increased risk, the protocol has trouble finding revenue.”
The most contentious aspect of Santoro’s suggestions is the route for compensating those who were the victims of the aforementioned incident.