Proposal
In this post I propose an alternative strategy for the treasury stablecoin funds that will increase the return of said stablecoins, increase the alUSD Curve pool TVL and boost CRV rewards for alUSD Curve liquidity providers.
Current situation
At the moment of writing, the Alchemix treasury holds around 143 million dollars worth of ALCX, 5.1 million dollars worth of ETH and 2.25 million dollars worth of DAI. Of those 2.25 million DAI around 1.75 million dollars is being farmed with:
850 thousand - Aave
700 thousand - Yearn
235 thousand - Cream
Curve
Alchemix currently has an alUSD Curve pool with a TVL of around 480 million dollars. This pool is incentivized by providing CRV and ALCX rewards, and the size of those CRV rewards depend on the gauge weight of the pool, which currently sits around 2% of the total gauge.
Convex
Instead of just providing liquidity on this pool, the Alchemix team suggests users to also stake their LP tokens on Convex. Convex is a protocol developed on top of Curve that boosts rewards for CRV stakers and liquidity providers alike. Users can lock their CRV tokens on the Convex platform to earn additional rewards, and so far the amount of CRV under control of Convex has grown to around 74 million CRV, which implies that Convex controls more than 27% of all veCRV. In a recent post the Convex team has announced that they will allow gauge weight voting by CVX holders, Convex's native token. With 17 million CVX tokens in circulation, this means that one single CVX token holds the voting power of more than 4 veCRV. Convex is already the biggest player on the voting playground and shows no sign of stopping its growth and share of all veCRV.
Suggestion
Numbers and percentages are open for discussion, but I propose that we allocate a certain amount of the currently farmed stablecoins to the alUSD Curve pool and stake those LP tokens on Convex. This will allow Alchemix to farm both CRV and CVX tokens, of which the CVX tokens can be used to vote for alUSD on the gauge, increasing the CRV rewards liquidity providers will receive. The farmed CRV tokens can either be sold or staked in Convex to earn farm more CVX. I would suggest the latter as it again increases the voting power of each farmed CVX token. Note that staking the farmed CRV in Convex doesn't mean it can't be sold later. In return for staking CRV tokens you get liquid cvxCRV tokens that can be sold again for CRV (and thus back to other tokens such as DAI or ETH).
There is one caveat however: as part of the Alchemix incentives program, the treasury itself will now also earn ALCX tokens. This makes it look as if Alchemix is paying itself and not the users. I don't know if this is possible, but if so it is desired to blacklist the treasury address from receiving these ALCX tokens. An alternative strategy would be to not put the stablecoins in the alUSD pool, but in a different one such as 3pool, susd, compound or aave. This will in turn not increase the TVL of the alUSD pool, but on the other hand the protocol will also not 'steal' rewards from the alUSD liquidity providers.
This stablecoin strategy also introduces additional (mainly smart-contract) risks, and thus my suggestion is to not ape in all stablecoin funds but to allocate a portion of funds already being farmed with. This percentage can be increased over time as the team gets more comfortable with this strategy.
Future
This strategy will work for any asset held by the Alchemix treasury that has a CRV incentivized Curve pool. This means that we for example can also apply this strategy to the WETH currently in held by the treasury by putting that WETH in an ETH Curve pool, such as seth, steth, or in the future maybe aleth.
Disclaimer
I personally own cvxCRV and CVX tokens and I assume that this will "be good for my bags". I hope I can objectively convince you that this is indeed also good for Alchemix.