Summary:
Following the feedback received on the pre-proposal for a ve8020 grant for veALCX, including the suggestion that Alchemix consider pursuing designating the 80/20 ALCX/ETH pool as a core Balancer pool, Alchemix has decided that it would like to proceed with pursuing a core Balancer pool designation. Instead of applying for a ve8020 grant and using that voting power for the pool, the core pool designation would mean that the fees earned by the Balancer protocol (excluding the Balancer DAO cut) are used to directly bribe the pool.
At the same time, this BIP increases the emissions cap of the pool from the current 2% to 10%. The migration of liquidity and incentives from Sushiswap to Balancer is still ongoing but already the pool is almost at the existing emissions cap.
References/Useful links:
Link to:
• Website
• Documentation
• Github
• Discord
• Other useful links: https://alchemix-stats.com
Protocol Description:
Alchemix is a future-yield-backed synthetic asset protocol that gives users advances on various yield strategies via a synthetic token. Alchemix loans are self-repaying, interest-free and non-liquidating. Today, Alchemix offers various strategies to borrow against select USD-pegged stablecoins (alUSD) and ETH (alETH), with the intention of launching other synthetic tokens in the future.
ALCX is the governance token for the community DAO.
Motivation:
As outlined in BIP-209, the recently-created ALCX/ETH 80/20 BPT will form the basis of the forthcoming veALCX system. Furthermore, it will be the primary on-chain pool for the ALCX token. As part of the veALCX roll out, Alchemix applied to the Balancer ve8020 grants programme (see BIP-146 and BIP-225), which was originally created to encourage and expand the use of 80/20 BPTs in ve-models.
In the discussion of the pre-proposal for that grant, some good suggestions were raised, specifically to consider pursuing a core pool designation instead of applying for a grant. In the past, core pool designations were exclusively used pools with yield bearing tokens, but following the Radiant 80/20 core pool designation, it now has more novel applications as well.
For both Balancer and Alchemix, a core pool designation would offer a few benefits over the grant model. For one, a core pool designation does not require an upfront payment of BAL from the Balancer DAO, which would also need a special escrow contract and the concomitant complexity surrounding such a set-up. Furthermore, this also means that Alchemix would not have to put up ETH to match the BAL gained from the grant in order to lock it as veBAL, avoiding incurring these up-front costs to make this model work.
In the end, the biggest benefit is that a core pool designation is a much simpler solution for both parties while still offering the same value add for veALCX and the encouragement of 80/20 BPTs in ve-models.
As such, with the passing of this BIP, the 80/20 ALCX/ETH Balancer pool will be designated as a core pool, and 100% of the fees earned by this pool (excluding the fees paid to LPers and the DAO cut) are to be used to bribe the pool. Since this is a Mainnet pool, these fees would be used to bribe the pool directly.
At the same time, this proposal also increases the emissions cap for the 80/20 ALCX/ETH pool from the current 2% to 10%. The migration of liquidity from Sushiswap to Balancer is still ongoing - and not all incentives have migrated just yet - but already the pool is almost at the emissions cap. Alchemix would like to fully migrate all incentives over to Balancer but with the current cap this is not possible.
Specifications:
-
Governance:
• Governance is conducted via forum posts and Snapshot voting
• There are two multisigs on Ethereum Mainnet: The protocol treasury 24-hour timelock multisig, and an operational (developer) multisig that is used to pay for expenses and execute transactions, and that holds LP positions and strategic assets. -
Oracles:
• The core protocol does not rely on oracles. -
Audits:
• Alchemix v2 has been audited by Runtime Verification as well as a public audit via code4rena. The protocol also offers a bug bounty programme via Immunifi.
• More details can be found here.
• ChainSecurity is currently engaged to audit the veALCX contracts. -
Centralization vectors:
• No centralization vectors exist in the core protocol beyond the multisigs described above.or. -
Market History:
• As a governance token and an unpegged asset, ALCX has experienced volatility since its launch.
• The current main sources of liquidity are Balancer and Sushiswap (the latter will be migrated over to Balancer in anticipation of the veALCX deployment), but ALCX is also listed on major centralized exchanges, such as Coinbase and Binance. -
Value:
• The newly created 80/20 pool will become the primary source of on-chain liquidity for ALCX. We expect that it will drive significant added value to Balancer, as the 80/20 ALCX/ETH BPT tokens will be needed to receive veALCX and in order for users to participate in Alchemix governance, gauge voting, and boosted yield.
• The core pool designation is a mutually beneficial set-up for both Alchemix (in terms of incentivization costs) as well as for veBAL holders (who will receive direct bribes to vote for the pool).
Contracts:
Link to existing pool
Link to existing gauge (2% cap)
Specification:
This proposal will require three transactions. The first will require
the DAO multisig on Ethereum 0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f would submit a transaction to the Authorizer 0xA331D84eC860Bf466b4CdCcFb4aC09a1B43F3aE6 and call grantRole with the following argument:
role: 0xae60dce27f51ce5815357b9f6b40f200557867f8222262a1646c005d09b7dfba
This role corresponds to setRelativeWeightCap(uint256) on mainnet gauges and can be confirmed here.
Then the DAO Multisig 0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f will interact with the new AuthorizerAdaptor at 0xf5dECDB1f3d1ee384908Fbe16D2F0348AE43a9eA and call performAction with the target(address) 0x183D73dA7adC5011EC3C46e33BB50271e59EC976 with the write setRelativeWeightCap 0x10d3eb04 with the value of 100000000000000000 the data(bytes) argument passed will be: 0x10d3eb04000000000000000000000000000000000000000000000000016345785d8a0000
Lastly the DAO multisig 0x10A19e7eE7d7F8a52822f6817de8ea18204F2e4f will submit a transaction to the Authorizer 0xA331D84eC860Bf466b4CdCcFb4aC09a1B43F3aE6 and call revokeRole with the following argument: 0xae60dce27f51ce5815357b9f6b40f200557867f8222262a1646c005d09b7dfba
Simulation on Tenderly: