[BIP-363] Enable alETH/wstETH and alETH/rETH Gauge [Arbitrum]

PR with Payload:

Gauge Proposal Template:


Create an alETH/wstETH and alETH/rETH stableswap pool on Arbitrum. Implement a 0.04% fee and 100 amp factor for each pool. Create a gauge for each pool.

References/Useful links:

Link to:
• See docs for more useful links

alETH contract address: 0x17573150d67d820542EFb24210371545a4868B03

Protocol Description:

alETH is a tokenization of future yield. It is typically maintained at a slight discount to ETH (due to being a representation of future value). Alchemix offers self-repaying loans collateralized by yield bearing assets, with alETH operating as the debt token ETH-based yield tokens. The historic price of alETH relative to ETH can be viewed at https://alchemix-stats.com/, under the “alAssets” section.

Motivation: Alchemix is expanding to Arbitrum and exploring different liquidity options with no specific commitment yet to a primary liquidity home. Alchemix has accumulated a sizable vlAURA stack in anticipation of the ALCX/ETH mainnet 80/20 pool becoming a Core pool. Eventually the hope is the core pool trading fees as well as veALCX incentives will sustain this pool, freeing up vlAURA for other use cases. These gauges are one potential use cases - pairing alETH liquidity with yield tokens for two of the most popular yield strategies for mainnet Alchemix.

Explain why this pool needs incentivization
Alchemix’s primary means of returning value to LPers (who can in a way also be viewed as lenders / purchaser of the debt token, alETH) is thru liquidity incentives. AMMs with gauge systems and sustainable bribe multipliers are particularly attractive for this use case.


  1. Governance: [Provide current information on the protocol’s governance structure. Provide links to any admin and/or multisig addresses, and describe the powers afforded to these addresses. If there are plans to change the governance system in the future, please explain.]

Alchemix DAO - User docs

  1. Oracles: Does the protocol rely on external oracles? If so, provide details about the oracles and their implementation in the protocol.

The protocol utilizes oracles for stETH and rETH to ensure new debt cannot be minted at a collateral higher value than present value. Alchemix does not liquidate users and therefore does not rely on oracles for liquidations.

  1. Audits: Provide links to audit reports and any relevant details about security practices.

Audits - User docs

  1. Centralization vectors: Is there any component of the protocol that has centralization vectors? E.g. if only 1 dev manages the project, that is a centralized vector. If price oracles need to be updated by a bot, that is a centralized vector. If liquidations are done by the protocol, that is also a centralization vector.

Alchemix currently operates thru a multisig: Multisig Admin Rights - User docs
veALCX has a built-in path to on-chain governance, which is intended to expand to all aspects of Alchemix in the future (no timeline).

  1. Market History: Has the asset observed severe volatility? In the case of stablecoins, has it depegged? In the case of an unpegged asset, have there been extreme price change events in the past? Provide specific information about the Balancer pool: how long has it been active, TVL, historical volume? You must provide a direct link to the pool AND a link to your pool’s gauge.

There is no existing pool, @solarcurve plans to create the pools. alETH is not pegged, but has constant pressure towards 1:1 that increases the lower the price is due to arbitrage (including the transmuter). See alchemix-stats.com for alETH historic price information. The discount of alETH from ETH can be viewed as the up-front cost of accessing future yield.

  1. Value: Is this pool intended to be the primary source of liquidity for the token(s)? If this is not the case, explain the expected value add to Balancer (can this pool generate consistent fees?)

It is unknown if this will be the primary liquidity source on Balancer. Alchemix is working to incentivize various types of pools, targeting simple pools with high TVL as well as concentrated pools that can lead to high arbitrage volume on L2s. The value add to Balancer is further incentive for Alchemix to accumulate Aura, as well as potentially benefit from arbitrage volume as additional pool types are grown. Volume for alAssets can also be fairly significant during tumultuous times in the market, which can bring in significant fees.

Pool: 0x26e5C5e2b48815b59640a1a82ac3C2249188Daf4
Uncapped Gauge: 0xD2C2b1C0F8Ad6E653eD7064fa7bAd7a22De8B249

Pool: 0xfA92D9Dd808D0E8D68079BDc7f01E74658E1EF15
Uncapped Gauge: 0xCe540832f7c790d25345Aa19FB1Db3cfDEA04611


The Balancer Maxi LM Multisig eth:0xc38c5f97B34E175FFd35407fc91a937300E33860 will interact with the GaugeAdderv4 at 0x5DbAd78818D4c8958EfF2d5b95b28385A22113Cd and call the addGauge function with the following arguments:

gauge(address): 0xD2C2b1C0F8Ad6E653eD7064fa7bAd7a22De8B249
gaugeType(string): Arbitrum

gauge(address): 0xCe540832f7c790d25345Aa19FB1Db3cfDEA04611
gaugeType(string): Arbitrum