Proposal to add the alUSD/USDC pool on Arbitrum to the Curve Gauge controller

Proposals
1

Proposal to add the alUSD/USDC pool on Arbitrum to the Curve Gauge controller: alUSD<>USDC

Summary:
Pool Contract: 0x78483d06a82ae76E0FF9C72AFd80E5B2CEA3b2A0
Gauge Contract: 0xAfcD73E242C6D880edFa87b8146825639BDa3881

Useful Links:

Protocol Description:

Alchemix is a DeFi protocol that introduces innovative, self-repaying loans through the tokenization of future yield. By depositing collateral into yield-generating strategies, users can mint synthetic assets, such as alUSD, representing their future yield. These synthetic assets can be used freely within the DeFi ecosystem while their loans gradually repay themselves through the yield generated by the underlying collateral.

Key Features:

  • Self-Repaying Loans: Borrowers can access funds without the risk of liquidation, as loans are repaid using yield over time.
  • Synthetic Assets (alAssets): Tokens like alUSD and alETH are pegged to their respective values and backed by yield-bearing collateral.
  • Flexibility and Utility: alAssets can be used in trading, liquidity provision, or other DeFi applications, offering users immediate liquidity without forfeiting future yield.

Alchemix empowers users to unlock the value of their assets, combining innovative financial mechanisms with user-centric design.

Motivation:

alUSD is slowly deviating in price from alUSD on Ethereum mainnet because bridge liquidity for alUSD has seen steady declines in liquidity. The purpose of this proposal is therefore to create an alUSD<>USDC LP pool on Arbitrum to boost liquidity of alUSD on Arbitrum. This is beneficial to Alchemix’s Arbitrum deployment but also the wider ecosystem and will divert more trading volume to Curve.

Specifications:

1. Governance:

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.

Key Multisigs:

  • Developer Multisig: Manages protocol operations and admin controls.
  • Timelock Multisig: Oversees key protocol functions with a delay for transparency.

For more details, see Alchemix DAO Governance.

2. Oracles:

Alchemix does not rely on external oracles.

3. Audits:

Alchemix prioritizes security through comprehensive audits and proactive measures:

Audit Reports:

  • 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.

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.

4. Centralization vectors:

Alchemix is designed to minimize centralization vectors, promoting a decentralized and resilient protocol. Key considerations include:

  1. 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.
  1. 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.
  1. 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.

5. Market History:

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