This proposal seeks community direction on the buyback of Rook’s ALCX stake and a retroactive approval to withdraw treasury ALCX from the Tokemak reactor.
ALCX Buyback from Rook
In the third Tokemak C.O.R.E. event, the Alchemix Bizgov subDAO made a deal with ROOK to help them secure a reactor.
The terms of the deal were such that, in exchange for Alchemix voting for the ROOK reactor, ROOK committed to directing their Curve voting power to the alAsset Curve gauges and not selling any of the ALCX that they would receive for x amount of time.
Because ROOK still has not received the reactor that they secured with our votes, they have decided to restructure the ROOK treasury, and they are planning to divest their full ALCX stake that they acquired through voting for the alAsset pools. The proposal is to use part of our TOKE funds to perform a treasury swap with ROOK, in essence performing a buyback of the ALCX that they have.
If we do nothing, the ALCX will probably be sold on the open market.
Justification for using TOKE for the sale and reducing our Tokemak exposure
The Alchemix treasury had 138,840 tALCX (reactor staked ALCX - $2.08M) and owns ~$250k worth of TOKE that it used to direct TOKE emissions to the ALCX reactor.
The reactors initially had relatively high APRs, but have been consistently decreasing ever since. The ALCX reactor currently has a 0.6% APR, and this value is not expected to change by any significant degree.
This means that the Alchemix treasury is currently earning $12.5k annually on its tALCX.
For this, it takes on Tokemak and Curve smart contract risk (as all the ALCX and tALCX in the reactor are deployed in a Curve pool).
It also needs to be noted that a portion of all ALCX in the reactor is deployed in the Sushi ALCX/ETH liquidity pool, growing it by 7%, on which Tokemak earns ALCX rewards.
If the reward dilution caused by this is taken into account, it is hard to argue how this all benefits Alchemix in its current form.
The tALCX has already been unstaked by the multisig, this proposal also serves as a retroactive approval of the action. To signal disapproval, there is a corresponding voting option. Because of this, our TOKE holdings currently provide no immediate support for Alchemix.
Tokemak not setting up a reactor for Rook despite them securing the votes provides further reasons why our TOKE stake should be used for this purchase.
Voting Options
Voting is single-choice.
Buyback refers to the action of selling a part of the TOKE stake and performing a treasury swap with Rook for their ALCX.
Withdrawal refers to the action of withdrawing the treasury owned ALCX from the Tokemak ALCX reactor.
- Approve buyback and withdrawal
- No buyback, approve withdrawal
- Approve buyback, no withdrawal
- Abstain