Proposal
The current allocation for AMO harvests is as follows:
- 1/3rd to the treasury in the form of ETH/stables
- 1/3rd to the treasury in the form of liquidity driving assets
- 1/3rd to buy ALCX and bribe for liquidity
This framework was implemented with AIP-80: https://forum.alchemix.fi/public/d/394-aip-80-elixir-amo-buyback-and-bribe
In light of the multichain exploit, curve exploit, and bug bounty, this proposal seeks to revise the allocation as follows, to be in effect until the launch of veALCX (expected EOY):
- Up to 100% to the treasury in the form of ETH/stables
- Remainder may be used for liquidity-driving assets
The treasury is currently overbalanced to locked liquidity-driving assets. The intent of this proposal is to extend the runway and rebalance towards ETH and stables.
Context
Alchemix DAO is authorized to spend up to 450k/quarter per AIP-40: https://forum.alchemix.fi/public/d/296-aip-40-alchemix-core-budget-request. The DAO has never exceeded this spending limit since its inception. Audits are typically the only reason the spending gets close to the limit.
With the ongoing alETH situation, the protocol is only earning income from the alUSD AMO. Currently, 1/3rd of the alUSD AMO revenue is sufficient to cover the quarterly budget, but with little-to-no headroom. At current ALCX prices, it also requires continuing to spend ALCX from the treasury to maintain the necessary emissions.
As a result of the multichain exploit, significant stablecoin runway was converted to AMO funds via AIP 95a: https://forum.alchemix.fi/public/d/429-aip-95a-multichain-response-optimism-and-arbitrum. A similar solution is expected for alETH. This conversion means these funds are now backing L2 alAssets and therefore cannot be sold for expenses.
The current status of the stolen multichain assets remain unknown. If these funds are eventually recovered or lost forever, then the L2 AMO can be converted back to protocol-owned liquidity, and the treasury would be well funded. However, if these funds are circulating then the treasury is currently heavily overweight on liquidity-driving assets.
As noted above, the protocol is currently self-sustaining but this does not leave room for expansion and becomes an issue if the bear market continues and treasury asset prices drop more. This proposal aims to create a larger runway so that future products/expansions of Alchemix are able to be funded after the launch of veALCX.
Note that the expected final round of the veALCX audit begins Oct 30th. The core contracts are done, and devs are working on the “nice to haves” while waiting for the final audit slot. The UI work is well underway and is aiming to be ready for community testing next month.
Voting
For - Approve revised AMO harvest framework
Against - Do not approve the revised AMO harvest framework
