Proposal to add 3 Alchemix pools to the Curve Gauge Controller (alUSD-USDC, alUSD-frxUSD and Arbitrum alETH-WETH)

Alchemix governance is community-driven, with ALCX token holders participating in decisions through Snapshot voting. Proposals start as community discussions and progress to off-chain signaling (“Alchemixed Opinions”) requiring 50 ALCX to post. Approved ideas move to Alchemix Improvement Proposals (AIP), needing 35,000 ALCX quorum for final approval. Execution is handled by relevant multisigs.

Specifications:

Key multisigs
Developer Multisig: Manages protocol operations and admin controls.

Timelock Multisig: Oversees key protocol functions with a delay for transparency.

Future governance plans aim to decentralize further by empowering ALCX holders. For more details, see Alchemix DAO Governance.

Oracles
Alchemix generally does not rely on oracles for the operation of the protocol. There are some small exeptions, including wstETH and rETH Chainlink Oracles to make sure that debt cannot be minted when these assets are off peg. The next version of Alchemix scheduled to be released in 3 weeks will not use any oracles. When the New Version is introduced, the current Version will be shut down.

Audits
Alchemix prioritizes security through comprehensive audits and proactive measures.

Alchemix v2 Audit: Conducted by Runtime Verification, this audit assessed the core system, including contracts like “AlchemistV2” and “TransmuterV2.” The full report is available here.
Code4rena Contest: Alchemix hosted a one-time security contest through Code4rena to identify potential vulnerabilities.

However, these are becoming obsolete with the release of the New Version of Alchemix. Multiple types and rounds of audits have been completed.

Security Practices

Bug Bounty Program:

An ongoing program on Immunefi incentivizes the community to report security issues.

Internal Reviews and Risk Monitoring:

Regular internal security assessments and risk monitoring tools are employed to maintain protocol integrity.

Centralization vectors:

Alchemix is designed to minimize centralization vectors, promoting a decentralized and resilient protocol.

Governance

Alchemix operates as a decentralized autonomous organization (DAO), with ALCX token holders participating in governance decisions.

Proposals are discussed within the community and voted on via Snapshot, ensuring a transparent and inclusive decision-making process.

Multisig Wallets:

Certain protocol functions are managed by multisignature (multisig) wallets, requiring multiple approvals to execute actions.

This setup enhances security and decentralization by distributing control among trusted members.

Oracles

The protocol relies on decentralized oracles, such as Chainlink Price Feeds, to obtain accurate and tamper-resistant price data.

This approach reduces reliance on centralized data sources and mitigates associated risks.

Liquidations

Alchemix offers self-repaying loans that are non-liquidating, eliminating the need for external liquidation mechanisms.

This design choice enhances user security and autonomy.

Market History

alUSD aims for a price target of $1, meaning it can experience volatility from time to time. alUSD maintains its price through its underlying collateral and redemption mechanisms. Users mint alUSD by depositing yield-generating assets, and alUSD can always be redeemed for its proportional share of the underlying collateral. This ensures stability and value alignment with the US dollar.

alETH also aims to track the price of ETH, but has and will always have a small discount compared to the actual price of ETH. It has generally been above the 0.96 ETH price point for almost all of its existence.