[AIP-8] New Liquidity Pool Choice on Sushi Onsen

scoopy

As written by @xycejnh :

Dear members of the Alchemix community,

Very recently we have been blessed with attention from various institutions. One of these is Sushi, with whom we have already been collaborating on the ALCX/ETH Liquidity Pool.

Sushi have given us some great news by letting us know that we will be integrated in their Onsen program. This means that community members who provide ALCX/ETH liquidity will receive additional Sushi rewards (specifically, 100 Onsen allocation points).

We have also been generously offered the allocation of an additional liquidity pool on Sushi. Relevant details are as follows:

The community will get to choose which tokens to represent in this pool.

Liquidity providers of this pool will only be rewarded with Sushi tokens (5 Onsen allocation points). No ALCX tokens will be rewarded for this pool.

Having more liquidity pools is very advantageous because it strengthens the alUSD peg and improves its accessibility.

I propose a vote for choosing which tokens to represent in this pool. Our current options are:

An alUSD/ETH pool,
An alUSD/DAI pool, or
No pool (we reject Sushi's offer of the extra pool).

Thelionshire

Amazing! I’d vote for the alUSD / DAI, as that helps keep the peg and would offer an additional venue for trading it (in addition to curve).

for the sushi rewards for alcx / eth- will those just show up in sushi, or is there something needed to be done?

Beeptalk_Feld

alUSD/ETH sounds attractive... or maybe DAI/alETH in the future if we reject now.

0xdef1

Excellent news. I would be in support of either pool, with a preference for alUSD/ETH for a few reasons:

ETH is the base asset for a large number of pools on Sushiswap, making trades from alUSD to most ERC20s require the fewest hops and lower fees
The ALCX -> alUSD path would be simply routed through ETH, enabling easier compounding for the LPs in the alUSD-3crv pool
There is already a route from alUSD <-> DAI via the above curve pool, and an xyk curve is not ideal for two stable assets.

Still, I would support proposals for either pool.

Nemo

I'm in support of alUSD/ETH pool. Main reasons:

ETH/Stable pools are the one with the biggest dept across DEXes and offers lower IL (excluding stablepools)
Lower fees, less hoopes

After we get this pool and liquidity going we can discuss and add more pools that are mentioned

yuntamoto

So many exciting developments recently. Between the two pool options mentioned (alusd/eth, alusd/dai), are there likely differences in how they might affect the alusd peg?
My thought is that alusd/eth is more convenient, as eth is often the intermediary. Also we already have a alusd/dai option when using the crv pool.
But I'm not clear if alusd/eth might create some pressure on the peg in ways that wouldn't be so with alusd/dai.

ButlerAndTheThirdStringers

I would rather see an ETH/alUSD pool for the following reasons:

By creating a market for alUSD against ETH we are covering all the bases since every asset on Ethereum has a liquid market against either ETH or one of the big stables. It would reduce friction for smaller players and make alUSD more useful by requiring one less (gas intensive) hop if you want to speculate with your loan since you'll always be able to trade to that asset with the least necessary amount of hops.
I would rather concentrate all alUSD liquidity with DAI to the CRV pool to strengthen the peg and prevent slippage, than potentially fragment liquidity between two pools even if it's to a small degree. Additionally a potential alUSD/DAI sushi pool would probably net a much smaller APR than the CRV pool, so I would imagine high slippage on that pair and not a lot of utility
An alUSD/ETH pool actually creates a new type of LP offering we don't currently provide in the Alchemix ecosystem, allowing more optionality on the spectrum of how much exposure people want to speculative crypto assets while LPing for rewards. It offers less speculative price exposure than the ALCX/ETH pool, since one side of the pool is in a stable, and more speculative price exposure than the CRV pool, since the other side of the pool is ETH. The potential alUSD/DAI pool offers nothing new

ZiggyOi

Awesome news! I would love to see an alUSD/ETH pool added. Alchemix is making tons of moves -- love to see it

Thelionshire

After reading other’s posts and thinking more in it, I’m more in favor of the alUSD/eth pool (although I like both). The curve alUSD/dai pool is sufficient and this would provide a lot more exposure to alUSD, since dex tx’s are denominated in eth (as others pointed out).

BeNu

I also vote alUSD/ETH. I actually harassed JiroOno about it. My case is similar to others. An alUSD/ETH pair makes alUSD more "real" as a stable coin. If you can tell people yeah, just mint alUSD and go buy ETH they get it. Sending small to mid size user to the CRV pool now kinda hurts since it is a gas intensive transaction to get DAI. it will also open more paths to other assets using aggregators. Exciting news!

bceth

Echoing others' sentiments in here but I'm in favor of an alUSD/ETH pool since Curve has been sufficient for alUSD/DAI up to this point.

edenblock

Echoing much of what many here have said, particularly @ButlerAndTheThirdStringers, I believe the addition of an alUSD/ETH pool would be a monumental milestone for the Alchemix network and community.

Without repeating anything that's already been said, I believe that Alchemix has the potential to grow exponentially with the addition of important pools like alUSD/ETH (and other big milestones right around the corner). With sustainable scaling in mind, I'd say this decision is a clear positive as it brings so much more utility to alUSD (and keeps stability, by concentrating existing liquidity on CRV pool) as well as a low-hop way for users to get exposure to this growing ecosystem.

Great to see this conversation happening, and looking forward to supporting this addition!

HarryK

Like the others above me have already said, alUSD/ETH makes the most sense. The go to way to trade alUSD/stable is Curve and thus creating another stable/stable pool becomes redundant imo.

isthian

alUSD/ETH definitely has the strongest arguments. Agree with alUSD/ETH.

boyeatzworld

What I like about a stable/stable pool is that it's easier to swap alUSD to Dai now without using Curve, which is fairly gas intensive. Additionally it might be better for keeping the peg.

yuyoman

I also like alUSD/ETH pair because everything in the space is around ETH and a better peg to stablecoin. It is going to be a great help for Alchemix

brillopad12

I think overall the alUSD/ETH pool offers more utility and room for growth. The only think that makes me think an alUSD/DAI might be worth it is the fact Uniswap v3 stuff will directly compete with Curve's stable coin algorithm. If curve was to get beaten out we would lose our only stablecoin pool. I know this is a worse case type thing but thought I would bring it up for discussion. What are your thoughts?

ETH-alUSD is likely to attract more liquidity and make the trade between alUSD to ALCX much more efficient.

alUSD-DAI will probably have low liquidity (because Curve is vastly superior and better yield returns with ALCX + Curve tokens). Remember that this “extra” sushi pool will not receive ALCX rewards, only Sushi (and a small amount at that). But this pool would greatly help the Oracle problems where everyone keeps asking why alUSD is breaking the peg (because CoinMarketCap and Coingecko only point to Uniswap or Sushiswap). Lots of other DeFi projects would use alUSD but the Oracle problem hurts them as well.

These are some of the thoughts I've gathered from friends and colleagues about it. Thought I would repost here as well.

RogueItachi

I agree with what many have said. alUSD/ETH pool is the move here. It makes it much easier and more gas efficient for users to directly yunt into their favorite shitcoins with their loan. It also increases the usability and attractiveness of alUSD as stablecoin which is key for the future.

whalegoddess

Slight concern about Impermanent Loss with an alUSD/ETH pool, but ultimately in favor of either new pool

ChickenBunz

alUSD/ETH sounds most sensible. Gets my vote too.