sCIP#44 - Add a ETH/alETH Pool

Proposals
#1

Summary:

This proposal would create an alETH/ETH pool and add it to the Curve UI.

Abstract:

Alchemix is a CDP platform that allows users to borrow soft-pegged synthetic assets of their collateral, with their collateral deployed to Yearn to earn yield and use that yield to repay borrowers’ debt and to peg the synthetic. Alchemix alUSD has been very successful thus far, holding its peg well while providing deep liquidity, and being one of the top pools on curve.fi.

How alETH works:
-Users deposit ETH
-Users mint alETH with a 400% LTV ratio (subject to change via governance)
-User can sell alETH for ETH, LP, leverage their position, or deposit in the Transmuter to exchange for ETH.
-Users’ ETH is deposited into the Yearn yvWETH vault
-Alchemix regularly harvests the yvWETH tokens for their earned yield, which repays debt and sends ETH to the transmuter, which helps to stabilize the peg
-ETH in the transmuter is also deposited in Yearn, and the extra yield earned from it boosts users’ yield for debt repayment.

Motivation:

Alchemix was set to get alETH on curve.fi until we had our reverse-rug incident which lead to the erroneous repayment of users’ debt. We have since then redeployed alETH, restored its solvency, and have vigilantly monitored it for anomalies. We are now confident it is operating properly and put in safeguards to prevent a similar event from happening again. Therefore, we think alETH is now ready to have a pool on the premier DEX for soft-pegged assets, Curve.

Getting on Curve would be beneficial for both Alchemix and Curve. The Alchemix team will lobby Alchemix DAO governance for LP rewards with ALCX. This will bring TVL and volume to Curve, benefiting veCRV stakers. When alETH was first launched, it was intended to be with the 0.3.2 yvWETH vault, but Yearn has since upgraded it to 0.4.2. One big difference here is that while the 0.3.2 vault relied more heavily on CRV rewards from Yearn, the 0.4.2 vault only allocates 11% of its TVL to Curve-based strategies. So the concern regarding al-Tokens double-dipping CRV rewards is severely lessened by these structural changes. See the allocations for the vault here: YearnWatch

This proposal to make an alETH/ETH pool on curve.fi is strictly limited to getting our pool created and listed on curve.fi and will not include having a gauge made for alETH. Should the amount of double-dipping of CRV rewards stay in the current state with minimal utilization of Curve by the yvWETH vault, we will consider making a proposal for a gauge at a later time.

Specification:

Dapp
Github
alETH token contract
alETH Alchemist Vault contract

For:

-additional TVL and trading fees from the pool
-will be bootstrapped with ALCX rewards (assuming ALCX governance passes it)

Against:

-a small portion of the yield we earn comes from Yearn selling CRV

8 Likes
#2

I support this proposal. It was already proposed before the “reverse rug” incident here, and with the new vault & increasing alETH debt level, I think alETH as an asset will continue to grow rapidly. Hence it makes a lot of sense to create a pool for ETH/alETH on Curve to not only capture the trading fees, but to offer the best solution for those seeking to swap these two assets. To me Yearn’s 11% allocation to a “CRV dumping strategy” is minor and should not prevent the establishment of this pool - the benefits outweigh the downsides.

1 Like
#3

In my opinion this proposal is a no brainer as it is going to benefit all parties involved.

1 Like
#4

Positive for this proposal. I think the new proposed reward structure makes sense

#5

I agree, this is a no brainer. Am for this proposal.

#6

100% for this proposal. As a holder of both, happy to see curve & alcx partnership getting deeper & stronger. And i will also be a vocal supporter of curve proposals on the ALCX DAO. See eth/aleth on curve as a great addition to my larger strategy.

#7

Curve is the premier place for swapping like-like tokens. alETH is backed by a strong project and demand for alETH will grow as the project draws in adoption. Including an ETH/alETH pool on Curve is mutually beneficial for both platforms and will form a positive feedback cycle: users have boosted confidence in alETH due to the Curve pool, Alchemix TVL will grow, this will lead to more swaps with ETH/alETH, resulting in more fees for CRV holders.

This is a bi-winning move: win here and win there.

#8

Pretty obviously a good proposal for both Curve and Alchemix, 100% support.

#9

Agreed with proposal. Alchemix is a solid protocol with dedicated devs and a unique value proposition in the DeFi space.

#10

Signals for pools that can be deployed via factory aren’t required anymore.

http://curve.fi/factory/create

#11