ALCX alETH Governance Forum Meeting 2021/05/26 3-530pm UTC
[Note I can't allow comment-only access, so for now just @ me in the discord if you have any edits. I'll also do a grammar/spelling pass thru and a nicer format for the final version]
(notes are organized by topic, rather than in chronological order. Please make a comment in any location that I've gotten incorrect, or am missing information. After a day or two I'll compile this and format it properly and post the official version to the alchemix forums. Try to keep comments fairly concise, goal is to capture the main points, not every single thing that was said)
alETH items
Yearn has a new ETH vault coming that they are completing testing on. We are waiting to hear back on when it will be ready. If it’s not ready quickly, then we’ll launch alETH with the current yearn vault.
Yearn devs recommended some changes that are being implement to the ALCX vault in order to make it easier to migrate to new vault versions in the future
Launching in approximately 10 days max (depends on what we hear back from yearn on their timeline)
Collateralization discussion generally appears in favor of 400% but there are drawbacks. General consesnsus is to be conservative to start (maximizing stability/security), and over the following weeks start to reduce with an eventual target of 200%.
alETH is a whole new beast so gotta be careful with it, General theme is about the priority being security, stability, and maintaining peg.
Some discussion that starting with 400% may lose out on some people who discover the protocol and then leave since 400% isn’t as attractive – however the example was given that SNX started with 750% and grew just fine (also points out that 400% really isn’t THAT conservative to start with). So if we launch with 400%, the goal is to make it clear at launch that 400% will be decreased.
Someone proposed creating a new ETH only pool, with a small share of ALCX rewards, that would then be used to boost the alETH vault yields (in the transmuter), say like a 30 day lockup. Somewhat controversial, and an intriguing idea, but not enough time to figure it out for alETH. Keep it in mind for future launches.
Keep in mind it's easy to start with 400% and lower it, but it's harder to increase
Part of proposing 400% ratio will be that 2 weeks after launch of alETh we'll put up a snapshot to vote to lower the collateralization ratio to 300%
There will be a new function to swap ETH for alETH – the ETH goes straight to transmuter to boost yield. This solves the problem of having to self liquidate to obtain alETH/ETH (which would be even harder with 400% collat)
alETH to ETH tool will be pretty front and center as it’s beneficial for the protocol when people to ETH to alETH
There will be no cap on how much ETH you can swap for alETH
Likely taking 2% from alUSD, ALCX only, and SLP pool. There is a little bit of backlash on reducing the SLP too much, but partially because SLP just dropped recently.
The thought is things will balance out. Many SLP users will probably migrate to alETH only, and then keep some of their ALCX for single staking. Which should make SLP more attractive. Essentially there will be so many staking options that if the market is even somewhat rational (LOL) it should all balance out.
There was some discussion on significantly reducing the ALCX only pool. Consensus is not to harm the ALCX only pool too much, given its noob friendly and it is the main tool for pure ALCX bulls. However, the intent is to cut down on the BRR over time (partially because eventually the DAO fee share will replace the ALCX farming rewards, and because long term ALCX only is not necessary for platform stability)
[Main point of contention] Original plan was to just kill alUSD pool when we launch alETH. There was an idea to keep 0.5% in alUSD first to not shock the system, then kill it off a week or two later. Initially we’ll do 5.5% for the alETH/ETH SLP, then bump that to 6% when alUSD pool is phased out.
Arguments for keeping 0.5%:
The curve pool has about 70m alUSD, if 60m alUSD pours in there we’d be under peg. There have been people arbing the pool, if it’s small gap they probably won’t though
The reason dropping to 0.5% works is because a large chunk of stakers will leave, which then raises the reward for remaining people, who will then stick around until the pool is killed. Ie, it splits up the system shock into two events rather than one.
Arguments for immediately killing alUSD:
Lots of alUSD will probably go to stake on CRV or pay down debt in the system, so not truly a 60m shock to the pool
Some concerns that we signaled strongly that alUSD would be nerfed when alETH launched - people strategized around this. So we may want to stick to our word.
Farm won’t be ready right away – need alETH first to make an LP token, so probably 2-3 days where there is no market for alETH, so that’s probably when you should get your alETH 😉 😉
Summary of the two governance proposals:
alUSD: nuke it when alETh launches, or do 0.5% when alETH launches and drop to 0% 2 weeks later
alETH: Start with 400% collat, 5.5% rewards (1.5%-2% from alUSD, 2% from ALCX only, 2% from SLP), after 2 weeks vote on reducing to 300% collat.
Misc Items
Scoopy missed the first part of the meeting due to falling asleep on their keyboard (<3 you scoopy don't kill yourself too much)
Goal to get alUSD into a lot of things – Alchemix platform assets will extend far beyond the ALCX ecosystem
Scoopy is working with ruler for some markets using ALCX and alUSD as Collateral
Unlocks are coming soon, but Scoopy does not expect major dumpage. As an example, some new investors want OTC deals, however the treasury can’t sell more ALCX OTC this year per the constraints of the previous deals. So Scoopy asked the currenty ALCX investors if they wanted to sell OTC and none of them wanted to, ie none are looking to take profit – ie don’t expect a dump with unlocks coming soon
In Alchemix V2 (of which the DAO is a part of, target later this year) you can build on top of alchemix’s smart contracts
When moving over to Sushi all the rewards will be sent there – so if you remain in the current SLP pool, you won’t get rewards. Happening on Sunday 5/30, specific time TBD. Regardless of alETH launch date.
There is a general goal to not require too many calls like this, and to not make too many changes, since people have lives.
Help and contribute where you can, use the protocol, spread the word,
Alchemix mods tip generously, and this community is wonderful, tons of peer and self moderation, people helping, everyone is very appreciative of the community
And the community loves Alchemix too <3
Gorby is scheduling tips for people who explain the protocol – literally scheduling tips. So take the hint, be helpful.
Per Scoopy, governance call was beneficial, was actually productive, actually helped the platform. (however per notes above, we don't want to do this too often)
For future meetings, use the governance proposals channel to chat during the meeting
Final time - 2.5 hrs
