While the initial draft of the new Alchemix DAO has been shared and the future tokenomics revision of the ALCX token is being designed and coded, there currently is an outstanding question of how to handle the Elixir farming rewards. At the time of writing a total of 462,697 CRV and 33,638 CVX have been harvested from the AMO to the treasury and are currently sitting idle. On top of that, the alUSD and alETH Elixirs still represent a large part of the Curve/Convex pools (40% and 61% respectively) and so will continue to accumulate rewards over time.
There will be numerous tokenomic enhancements, a progressive move towards on chain governance, and boosted yield from the protocol for veALCX holders in Alchemix DAO. Until that time the current farming rewards from the Elixir should be better utilized to support the protocol.
With this AIP we want to propose that until the veALCX tokenomics are implemented the rewards harvests of the Elixirs will be used as following:
50% of the harvested CRV will be locked as sdCRV in Liquid Lockers and used to vote for the gauges of our pools. This incentivizes LPers and will, in the long-term, lead to more sustainable liquidity for the protocol.
50% of the harvested CVX will be locked as vlCVX on Convex and used to vote for the gauges of our pools. This incentivizes LPers and will, in the long-term, lead to more sustainable liquidity for the protocol.
Sell the remaining 50% of CRV and CVX for stablecoins to be used to fund core operations (e.g. developers, audits, marketing, et cetera). As per a previous AIP the current core budget is topped up every quarter to $450k. Rather than funding this through selling protocol reserves (i.e. ETH), we could temporarily fund the core budget by selling half of the harvested Elixir rewards. Any stablecoins that are held in excess of the quarterly budget will remain in the treasury as a reserve for future usage.
Relock approx 20k SDT for increased sdCRV boost.
We feel that this temporary harvest framework supports the protocol the best by both strengthening our liquidity pools and thus enabling the vaults to scale, as well as sustainably funding the core operations through the current downturn without selling protocol reserves.
A vote “FOR” signals approval of the above interim framework for Elixir harvests.
A vote “AGAINST” signals the desire to use the harvested rewards in a different manner (in which case, please leave a comment in this forum post).