Hi @allan.g
I appreciate the hard work and thought that has gone into these proposals but I would just like to voice some concerns I have over them and at least request more time for community consultation before being put to IIP.
It has been less than a week since the PWG / FLI POD first brought these initiatives to the community and PWG call. 5days Since @afromac 's statement that IC is ready to launch leveraged products. And only 4 days since these IIP’s have been put to the forum. At no point have I seen a sentiment check or significant opportunity for the community to discuss them amongst the many other things currently going on around the coop.
To significantly complicate matters further there is a great deal of uncertainty as to the viability of running these products in parallel to the FLI suit. Whilst I am all for us as a community creating and maintaining our own products and establishing independence and self-sovereignty I remain unconvinced that these products differ significantly enough from the FLI suit. I appreciate the concept is to keep the 2x leverage target tighter but it is my understanding the FLI re-centering speed could be tweaked to achieve a similar outcome. The trade-off of course would be more frequent rebalancing and therefore higher gas costs. Please correct me if I am wrong but these “SLI” products would also need a degree of dynamic rebalancing to protect against liquidation again similar to the FLI suit?
More worryingly to me, however, are the motives behind these proposals… Whilst I don’t doubt the capabilities of the FLI pod and I fully recognise their enthusiasm. On the PWG last Monday the first thing referenced with regards to these products was the 60/40 fee split on the current FLI suit being undesirable and these products being a solution to those ends. So are the motives here to create better products for our users? Something that seems could be achieved by working and collaborating with our current methodologists? To influence the current fee split negotiations? Or even to circumnavigate DFP entirely? Based on discussions so far it is evidently not 100% the first.
Whilst of course we can argue over intentions all day long, what I believe cannot be argued against is that the optics here look far from optimal. It is not a stretch of the imagination that from an outsider’s perspective we have simply backwards engineered and regurgitated DFP’s IP in a move to cut them out/ and or strong arm them at the negotiating table. We are already well aware of their objections. Is this really the way we wish to conduct business? Do we really want to risk antagonising a key strategic partner whose products to date have made up >95% of our revenue? Would it not be better to complete the negotiations with DFP and the numerous proposed improvements to the products first before attempting to table competitive ideas?
There is a lot more I could go into here but the above is the bulk of my feelings towards this process. In summary, this is by far the most contentious, controversial, and potentially most consequential decision put to the community to date. In my humble opinion, it should not be rushed.