Use up to 1M FXS from community supply to swap for TOKE at a 7 day average market price of each token to control our own destiny in the FXS reactor and have a large seat at the Tokemak governance table from day 1.
Background & Motivation:
FXS crushed the Tokemak CoRE competition coming in #1 of 42 protocols. The winning reactors will go live soon. Other winning reactors such as OHM and ALCX have proposed, passed, and completed a DAO <> DAO swap of their gov token for TOKE so that they can vote for increased TOKE rewards for their reactor, have a large say in Tokemak governance and align incentives with Tokemak from day 1.
We propose the same concept as the leading #1 reactor winner of the CoRE competition. FRAX should control its own destiny and also have TOKE on its balance sheet of assets since it is a yield generating asset, will increaase FXS’s liquidity (double value for us), and will allow us to be one of the largest protocols at the governance table leading the direction of this new innovative project.
We believe that up to 1M of FXS from the community pool is justified to swap based on Tokemak’s desire and pricing details. The FXS swapped will most likely go right into Tokemak’s reserves and into their reactor so it should not contribute to any sell pressure and align both protocols’ incentives together. Since the FXS emission schedule is slated to naturally halve similar to a BTC halvening on December 20th (1 year anniversary of protocol launch), there is more than enough FXS to do this swap without affecting current emission rates and emission schedule.
For: Approve Comptrollers to negotiate with Tokemak protocol up to 1M FXS swap for TOKE as a DAO <> DAO swap.
I’m in favor of this. Tokemak is a really interesting project and think there’s a value add for both in collaboration here.
Also with regards to possible selling pressure, although I don’t think it will be necessary since I don’t expect any selling on their part in the near future if at ever, we theoretically could employ a tit-for-tat strategy if that does occur. That is, if they sell FXS we can buy a corresponding amount of FXS using the TOKE they provide us to create net neutral sell pressure. This of course assumes their token doesn’t devalue significantly relative to ours.
Still though as I mentioned I don’t think the above is a serious concern. I think this exactly the sort of collaboration that is a value add especially since it’s a swap not a subsidization and further entrenches us as a top-tier stablecoin in the larger defi ecosystem.
I agree 100% with this proposal: being the #1 protocol in the very first competition for a Tokemak reactor, we should be coherent and allocate a significant amount of tokens to activate the SWAP between the two protocols
Voicing our support here as well. Integration with Tokemak could bring a few key benefits to the frax ecosystem:
Prominent positioning in a high visibility DeFi project
Increased demand for FXS because of lucrative TOKE rewards
Strong positioning for FRAX to be a stablecoin used within the Tokemak system serving as a multiplier on frax adoption across many venues
Accumulation of TOKE which is a strategic asset for FRAX in terms of being able to direct both TOKE rewards as well as liquidity deployment into trading venues that are strategically aligned with frax