The Alchemy of Chains, Bondage, Tokemak
October Alchemix Update
October Alchemix Update
Dear Alchemix Friends,
We would like to introduce the new version of our community-led newsletter. Here you will be able to get a fortnightly summary of major events on discord, governance forums, twitter, and the general Alchemix community.
As always, we are asking for your ideas, articles and article requests, art, or anything else you want to offer to benefit the newsletter. Your support will not go unrecognized and the tip bot has been loaded up.
Let’s dive into our October Update! There is a lot to discuss - everything from protocol stats and Chainlink, to Olympus DAO and Tokemak, and so much governance.
Community artwork in this issue is courtesy of community member ! Jacob !.
Alchemix Protocol Stats
Total Value Locked (TVL) $1,350,000,000
DAI Vault TVL $371,249,414
DAI Vault APY 7.93%
ETH Vault TVL ETH 88,739 ($354,956,200)
ETH Vault APY 10%
Protocol owned liquidity via bonding 1.1% ($2,174,000)
Twitter Followers 46,600
Discord Members 8,710
The number of Alchemix Twitter followers and Discord members continues to steadily increase. During the month of October we have also seen a nice rise in yields in both the DAI and ETH Vaults.
Announcements
Patron NFT Available for Minting
The long-awaited Alchemix Patron NFT can now be minted. There has been a significant level of interest from the community regarding the availability of this NFT. If you donated to Alchemix earlier in the year then you may be eligible to claim one.
Immunefi Bug Bounty Increased
Alchemix has increased the maximum payout for critical bugs found via its Immunefi bug bounty program to $500,000. This increase was first proposed by Scoopy Trooples in September as part of AIP-23, and was strongly endorsed by the community with 100% of the votes in favor.
Chainlink Partnership
With our official partnership and integration with Chainlink Keepers, and Chainlink price feeds, Alchemix will be actively moving towards true decentralization.
Chainlink Keepers will allow for the automation of yield harvesting and debt repayment function of Alchemix, with no human interaction ensuring a decentralized and autonomous protocol.
The Chainlink price feed launch being sponsored by Alchemix will allow for many DeFi applications to now seamlessly add support for ALCX as collateral.
More information about the Chainlink partnership can be found in the medium article:
Alchemix & Chainlink medium article
DeFi 2.0 & Protocol Controlled Liquidity
Intro
Scoopy Trooples recently revived the concept of DeFi 2.0 in a twitter thread:
Tokemak C.o.R.E Event
Tokemak’s Collateralization of Reactors Event (C.o.R.E) concluded on October 4th, with Alchemix obtaining the enviable position of 2nd, ahead of 34 other prominent DeFi projects.
TOKE stakers and LPs were eligible to vote for their preferred project over the course of a week from September 28th, and the vote went down to the wire. Competition to be amongst the first five token reactors was fierce, with the leading projects changing regularly throughout the duration of the vote.
Statistics produced by Tokemak after the C.o.R.E revealed Alchemix achieved the 2nd highest number of unique voting addresses, comfortably ahead of the 3rd place reactor.
All who voted for Alchemix in the C.o.R.E event will be eligible for an NFT, which is rumoured to have some future utility in the Alchemix DAO.
For more information about Tokemak and the anticipated benefits of an Alchemix ALCX reactor, see the Tokemak section of the Protocol Controlled Liquidity article in this issue. For more information about the C.o.R.E event, see the following references:
Tokemak Reactor
Liquidity and market-making are two of the more opaque concepts in finance. Tokemak provides sustainable DeFi Liquidity to turbo-charge protocol liquidity.
The Problem: Raising liquidity for a new protocol is costly, inefficient, and inflationary.
The Answer: In its simplest form, users are playing a game of balancing the reactors. The reactors incentivize a ‘balance’ between the value of assets deposited and TOKE staked through a variable APY.
The Tokemak holds large reserves on USDC and ETH and sets up one sided liquidity reactors where investors can single stake a token to be matched by the ETH in the Tokemak treasury.
The balance between Liquidity Providers (LPs), and Liquidity Directors (LDs) creates a decentralized market-maker that is extremely efficient and balanced. Liquidity Directors are TOKE holders. LDs decide how much liquidity is dedicated to a reactor by staking TOKE in a reactor causing the APY for LPs to rise. If there is too much liquidity dedicated to a reactor and not enough volume trading in a reactor the LDs will obtain fewer rewards.
Scoopy Trooples describes Tokemak on Daily Millennial:
Skip to 27:20 for Scoopy’s explanation of Tokemak.
For an overview of how to provide ALCX liquidity to Tokemak, see the Tokemak FAQ in the forums. Tokemak’s own medium also contains a number of useful posts.
One principle feature of Tokemak is that there’s no impermanent loss - a great way for protocols to jumpstart liquidity by renting it before being able to bond and own it. This brings us smoothly to our next section and partnership: Olympus DAO Bonding Program.
Olympus DAO Bonding Program
Instead of renting liquidity via inflationary LP mining, Protocols can now own their Liquidity via the Olympus DAO pro bonding program. This will help curb the addiction to toxic LP mining by users whose only objective is to extract maximum value from the project.
As liquidity mining program matures and rewards taper off, we can begin to purchase our previously rented liquidity and create a base of protocol-owned liquidity for security and permeance. Alchemix is doing this by buying LP shares off of its liquidity providers using ALCX bonds.
Turning Toxic LP miners into aligned Bonding partners.
Olympus DAO bonds are purchased at a market-determined discount, and vest linearly over one week. This strongly disincentives toxic farming and ensures that value is captured by people with a longer horizon for the project.
Community member Ov3rkoalafied produced a fantastic article about how to use bonding to outperform ALCX single stake:
0v3rkoalafied bonding medium article
Governance Proposals
This section of the newsletter will summarize all active proposals (open for voting or going to a vote soon), as well as outline any proposals that have been passed since the last newsletter.
Active proposals:
AIP- 28: A new curve pool that consists of decentralized stablecoins, alUSD, FRAX, and FEI, using each protocol’s CVX vote for the pool in the gauge
We propose a new curve pool that consists of decentralized stablecoins, alUSD, FRAX, and FEI. Each of our respective protocols spends a lot of resourcing providing liquidity for our respective 3crv pools. By forming the d3 pool, we can pool our resources together and offer deep liquidity between our tokens.
The Alchemix, Frax, and Fei teams have discussed this, and together, we can leverage each protocol’s individual strengths. Currently, between these three teams, we control over 500k CVX, deep treasuries, and the ability to bootstrap with our respective governance tokens.
For this proposal, Alchemix will split its pool incentives and CVX voting power equally among alUSD3CRV, alETH, and d3 (pending gauge acceptance). The Fei and Frax teams will also be contributing towards incentives to maximize our collective efforts.
Not put to a vote yet - credit Scoopy
AIP- 29: this AIP aims to change the emissions from the DAO
The last major update of the allocation of our weekly emissions schedule was done in May (AIP-9). Since then there have been a few updates in separate proposals, including a bribing allocation (AIP-18), the introduction of bonds (AIP-21) and tALCX staking (AIP-22). This AIP is to formalize the emissions allocation going forward in light of these new developments.
Live voting now - credit Felix
Snapshot- Temp check for alUSD/alETH Bonds
Closed Proposals:
AIP-20: This is split up into the A and B sections
AIP-20-A: put 15k alcx on abracadabra, mint mim at 18.25% liquidation price of current price, buy cvx, lock cvx and vote for alusd gauge and put cvxcrv rewards from locking back in convex for flywheel effect.
AIP-20-B: put 15k alcx on abracadabra, mint mim at 18.25% liquidation price of current price, swap mim for 3crv, put 3crv on alusd farm, farm crv + cvx + alcx, put crv in flywheel, lock cvx, use alcx for paying off original debt
Passed - credit alUnara
AIP-21: 1600 ALCX weekly available for purchase via bonds, which is roughly 10% of the current weekly farming rewards. We will initially target our three flagship liquidity pools: ALCX/ETH SLP, alUSD3CRV LP, and alETH Saddle LP. only the ALCX/ETH pool is live atm
Passed - credit Scoopy
AIP-22: Alchemix and Tokemak swapping $3m of ALCX and TOKE giving us voting powers in TOKE
Passed - credit Scoopy
AIP-23: The new bug bounty will have the following rewards: Critical: 500,000 USDC High: 25,000 USDC Medium: 5000 USDC Low: 1000 USDC
Passed - credit Scoopy
AIP-24: splits the alETH ALCX weekly emissions between the Saddle and Curve pools at a ratio of 50%/50% (edited)
Passed - credit Felix
AIP-25: Should Alchemix launch an alBTC vault with the V1 tech or wait for V2 to launch?
Did not pass - credit Ov3rkoalafied |Koalas NOT Kuddly
AIP- 26: This is a ‘temperature check’ to examine whether Alchemix should create a Rari Fuse Pool.
Passed - credit RogueItachi
AIP- 27: This proposal authorizes an initial raising of the debt cap by 2000 alETH to a total of 6000 alETH. It also authorizes two subsequent raises of the debt cap to 8000 and 10,000 alETH respectively if market conditions are healthy enough.
Passed - credit @Ov3rkoalafied |Koalas NOT Kuddly
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