Elixir AMO

Alchemix Algorithmic Market Operator

The Elixir AMO (Algorithmic Market Operator) is a tool that makes use of the front-stop that can build up in the Transmuter. When large enough, the front-stop can be deployed to the Elixir for each alAsset. This deployment results in the collateral being deposited to the corresponding Curve liquidity pool. This has a few effects:

1. The initial deposit helps rebalance the pool, thus increasing the price of the alAsset.

2. The deposit earns yield in the form of CRV and CVX, that can be sold to cover protocol expenses, kept and locked to vote for increased incentives to the pools, or sold to speed up the debt repayment of Alchemist depositors.

3. At any time the AMO can withdraw the alAsset (instead of the underlying collateral) and remove it from circulation (effectively matching the Transmuter effect of converting alUSD into collateral assets), thus acting as a second instance of increasing the price of the alAsset.

The Elixir offers faster-acting control of alAsset pricing as well as an additional revenue stream for the DAO, all while being able to match the Transmuter by shrinking the alAsset supply when necessary.

In accordance with [AIP-80], farming rewards from the AMO go to the following three sources, split equally into 1/3rds:

1. 1/3rd farmed assets will be relocked or sold to purchase other gauge-controlling assets at the discretion of the Alchemix BizGov SubDAO. The allocation strategy will focus on growing existing positions and ensuring new positions taken are sizable enough to be meaningful. A non-exhaustive list current assets that could be accumulated and locked includes veCRV, sdCRV, SDT, vlCVX, veBAL, vlAURA, veVELO, sdBAL, among others.

2. 1/3rd of farmed assets will be sold to ETH and Stablecoins, with the exact breakdown at the discretion of the BizGov SubDAO, to fund the treasury. The treasury is allocated a budget of $450k each quarter in accordance with [AIP-40].

3. 1/3rd of farmed assets will be sold to purchase ALCX. The purchased ALCX will be added to existing ALCX bribe programs, with the exact programs at the discretion of the multisig. The purpose of the allocation strategy will be to maximize alAsset liquidity and AMO revenue.