The Alchemix team is hard at work trying to expand our presence on centralized exchanges. Expanding market access to ALCX will help to grow our ecosystem in various ways.
For one, countless traders and speculators do not use DEXs, so a stronger CEX presence will help us to expand the number of token holders. Hopefully we can convert some of these speculators into DeFi users as well.
Secondly, if we have healthy markets in both DEXs and CEXs, then it will give us highly reliable price feeds from Chainlink. This is a key upgrade that will help us to expand the scope of Alchemix.
In order to prepare for any upcoming listings, we need to ensure that the markets on these exchanges are healthy enough to allow for trading. Thus, the Alchemix team has engaged with two of the leading Market Making firms in all of cryptocurrency, Alameda and Amber, to provide their services for our CEX trading pairs. By enlisting the services of market makers, we can ensure tighter spreads and less slippage, creating a healthy trading environment on the exchange(s).
We can share most of the details, but please understand some information needs to remain confidential or vague to protect these firms’ operations.
The Deal:
-6 month long ALCX token loans to Alameda and Amber, with option to renew contract once the 6 months is over
-Token loans are uncollateralized. Both parties have written agreements but are also operating on good faith. Both of these firms came from the recommendation and connections of our strategic investors.
-Alameda will borrow 20,000 ALCX
-Amber will borrow 25,000 ALCX
-Each firm will provide $100k market depth both sides within a couple basis points to each major exchange we get on
-Each firm has several tranches of call options for the ALCX on loan. Should ALCX go above these option prices, they have the option to repay in stablecoins instead of ALCX (it should be noted that if these options do get exercised, then all the USD will go to the DAO -- which may actually be seen as a good thing)
Therefore the Alchemix core team is requesting a 6-month loan of 45,000 ALCX to facilitate the CEX markets.
A vote “For” authorizes this loan.
A vote “Against” rejects it.
Unofficial Poll for funsies (snapshot after some discussion):
EDIT:
UPDATE
ok, so I wanna give an update on AIP - 11 for market makers but the forums are experiencing some difficulties, and they are seemingly missing? It's likely we can recover them, but for the time being, I will just update in here with an @everyone
Previous terms were loans totalling 45,000 ALCX for 6 months split between Alameda and Amber, but we have since chosen to go with alternative market makers in place of Alameda.
Current terms are loans totaling 56,000 ALCX to three different market makers, Wintermute, Amber, and Fractal.
25k to Amber, 6 month minimum contract
25k to Fractal, 6 month minimum contract
6k to Wintermute, 12 month minimum contract
All agreements have a mixture of bullish, more bullish, extremely bullish, and full-on bulltard strikes for stablecoin repayment options in place of repaying the ALCX on loan. If somehow the DAO ends up hitting all of the strikes, then the cash options will enable the DAO to be an omega stablecoin whale, which is not a bad thing imo, some diversification of the treasury is a good thing.
All firms have agreed to not using the ALCX on loan to yield farm.
As we plan to increase our presence on CEXs, this trio of market makers will ensure deep and tight liquidity for traders and speculators across all relevant markets. And with it, we'll grow the Alchemix pie and be able to improve our infrastructure via chainlink price feeds. This will open ALCX up to lots of other exciting partnerships and integrations with other DeFi protocols.
I'd like to put this up for vote within the next 12-24 hours, as much of this has already been discussed when I first presented the AIP and the matter is kind of urgent.