# Ethereum v2 Reserve Factor - aFEI Holding Update
AI summary
This proposal aims to convert Aave DAO's holdings of aFEI, a token representing deposits of the FEI stablecoin, into aDAI, which represents deposits of the DAI stablecoin. Due to the FEI stablecoin being phased out by its creators (Tribe DAO), Aave DAO needs to move its reserves out of aFEI. The conversion will happen gradually: aFEI will be redeemed for FEI, then FEI will be swapped for DAI at a 1:1 rate using Tribe DAO's system, and finally, the DAI will be deposited into Aave's DAI Reserve.
If this proposal passes, Aave DAO will reduce its exposure to the deprecated FEI stablecoin and increase its holdings in the more stable DAI. This benefits the DAO by securing its treasury assets, but the conversion will occur over time as FEI liquidity becomes available, meaning the full transition won't be immediate. There are no direct financial losses or gains for individual users, but the DAO's treasury will be more secure.
Voting results
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Ethereum v2 Reserve Factor - aFEI Holding Update
7CDA90A3999E-AIP-REDEEM-AFEI-FOR-DAI
Author(s): Llama, Matthew Graham, defijesus
Simple Summary
This proposal proposes unwinding the aFEI holding for DAI and depositing the DAI into the Aave v2 Ethereum Pool DAI Reserve.
Abstract
Due to recent events within the Tribe DAO community, the FEI stablecoin is being removed from circulation. This proposal details how Aave DAO will enable anyone with an EOA to convert the DAO’s aFEI holding to an aDAI holding.
Based upon available FEI liquidity in the FEI Reserve, Aave DAO’s aFEI wil…