[AIP-3] Increasing share of emissions going to ALCX holders

state

Alchemix follows the emissions schedule described here :
https://alchemix-finance.gitbook.io/alchemix-finance/token-distribution/alcx-monetary-policy

The split of where those emissions go, however, is up to the ALCX community to decide and vote on.

The current split looks like this:
ALCX-ETH sushi pool: 45%
ALCX-only staking : 5%
3crv-alUSD pool: 45%
alUSD-only staking : 5%

The emissions for 3CRV rewards have been very useful at boostraping the curve pool, and we are now looking at a curve pool with 283M staked in it, earning an APR of 111.5%.

Personally, I think we could significantly reduce the rewards going to the curve pool while still maintaining the same amount of liquidity in the pool. Stablecoin farmers are used to APRs of 10-40%, so I think the APY itself could be reduced by 50% and stablecoin farmers would mostly stay in the pool. This means we have some flexibility around reducing curve ALCX rewards while still maintain a deeply liquid curve pool.

A reduction in curve rewards would mean that more money can go to ALCX-ETH LP staking and ALCX-only staking, redirecting more of the emissions rewards directly to ALCX holders. This could also have good effects on the price, which could even out the reduction of ALCX rewards on the stablecoin pools.

Overall, the curve alUSD pool is more than deep enough at this point in terms of liquidity (20M alUSD to DAI swaps with almost no slippage!), so this means ALCX holders should probably consider redirecting more rewards towards ALCX-ETH LPing and ALCX-only staking. This could strongly reduce dilution for ALCX holders, granted they are actively engaged in the system by staking their ALCX or ALCX-ETH LP tokens.

To that effect, I would propose this new rewards split:
ALCX-ETH sushi pool: 65%
ALCX-only staking : 7.5%
3crv-alUSD pool: 25%
alUSD-only staking : 2.5%

https://imgur.com/24l3ccQ

Please let me know your thoughts, and I think after reading all your comments I will ajust if necessary and formally propose this to the DAO.

ButlerAndTheThirdStringers

ButlerAndTheThirdStringers meant to reply to the original post of state

DEFIchad

you son of a bitch I am in

travisformayor

Thelionshire

I like it. More value to alcx. Emissions don’t water you down much as long as you either provide liquidity or stake. I may suggest going a bit higher on the alcx - perhaps with a method of unstaking time for stability? Maybe 10% with a 1 or 2 week unstaking period? Then alcx - eth would be 62.5%? That may be too many changes for now. Either way, I like the stable / alcx split but made a slight change so it’s 75% alcx and 25% stables.

ALCX-ETH sushi pool: 65% (could adjust down to 62.5% to allow alcx up to 12.5%)
ALCX-only staking : 10%, could go up to 12.5%, suggest with locked period for unstaking)
3crv-alUSD pool: 22.5%
alUSD-only staking : 2.5%

travisformayor

I also like the idea of tossing a small amount, just a few percent, to people who have open loans. Capture them as shareholders and improve their account balance even more. Taking out loans is useful to Alchemix, we can reward that in shared ownership.

scoopy

travisformayor this would require a lot more work to implement, so let's keep this in mind for the future, but not add it to this proposal

0xdef1

travisformayor Would love to see this as a separate proposal. And agree about keeping the rewards modest. We need to keep unit economics in line, we don't want to pay in equity more than the revenue that those incentives would generate.

RichAndCreamy

Bringing in stables to be closer to market rates is a yes vote from me.

ButlerAndTheThirdStringers

RichAndCreamy I would take it a step further and allocate that 7.5 percent ALCX to the SLP and remove ALCX-only staking entirely.

Creating a liquid SLP with less volatile swings should be the priority and ALCX-only pool doesn’t do much to benefit the protocol. Any ALCX stakers could just move to the SLP pool to counter dilution and we’d be better off. Initial selling to enter the pool would only be temporary and easily countered by the appeal of purchasing ALCX and entering the SLP pool for monster APY

Nyyls

I'm for increasing the ALCX-ETH sushi pool, it's a good pool 🙂

fanta

ButlerAndTheThirdStringers Alcx only stakers don't put downward pressure on the price when compounding.

Nyyls

Discord vote is here: https://discord.com/channels/738480789464940634/764832669636100096/819484190314594324

Roytheboy6

YES and YES

Ivfx619

I'm in let's go!

YallaYield

Let's get this deployed asap, stable farmers are having too much fun on the back of holders.
Also, alcx-only staking should get discontinued and allocated to SLP to create maximum value.

Malaka

YallaYield Personally I think that LP is also better, which is why it should have max rewards. But some people are risk adverse and would prefer to farm without risking early volatility in LP poos.

To be clear, I am not one of those people lol. Just thinking about them though, no need to get rid of pool. Hodlers gotta farm too 👨‍🌾

ButlerAndTheThirdStringers

YallaYield Thank you. The ALCX-only pool doesn’t add any value to the protocol. A highly liquid and less volatile ETH market does. The priority should be to Incentivize that by increasing emissions as much as possible.

I don't buy the idea that it hurts holders, since any IL should be easily offset by the high emission rate of the SLP pool.

KGB

This should be put to a snapshot vote immediately.

hjqcan

ALCX-ETH sushi pool: 65%
ALCX-only staking : 12.5%
3crv-alUSD pool: 20%
alUSD-only staking : 2.5%

bambatman

100% agree with the initial proposal, you have my vote!