Wind Down Alchemistresses

TLDR:

Manager Vault Ought to Take the Following Actions:

• Remove LP from Velodrome
  • Accept Rewards
  • Unstake LP
  • Break LP
• Pay off Debt to alETH Vault
• Sell veVELO to Alchemix Treasury

This will make all positions Liquid, and then members can burn their Shares to Rage Quit.

A Retrospective on Alchemistresses:

Alchemistresses was challenging, and fun to execute, but ultimately, I don't think a very successful experiment.

We basically created a Levered, Self-Repaying, Yearn Vault, where all of the functionality needed to be executed by Multisig, and nobody could leave + Cool art.

4626 Vaults would have been more fun for everyone, but wouldn't have had "Your NFT is your Membership to a Moloch DAO" narrative.

There were a few specific pain points:

1. The Shares are held by 6551 Accounts.

Because the shares are owned by the 6551 Accounts, there is a layer of separation between the actual shares, and the EOA of the users -- which means in order to solve this, you need to go through the https://tokenbound.org/ website, and use WalletConnect on the DAO Membership Site:

• https://admin.daohaus.club/#/molochv3/0xa/0x912aab5913023d20a5dcd17160e6954528433a7f/members

This is difficult because it would be more intuitive to just login with your regular account and take action to vote, or create a proposal.

2. The Onchain Proposal systems are sophisticated, but not for beginners.

Technically, most of the actions taken by the DAO as far as Treasury Management / LP Deposit, could be onchain proposals, but the learning curve on these was kind of steep.

For example, it took me several weeks just to get the burnShares proposal down for the extra shares in the treasury. It's not that it was difficult, but that it was new, and there was a specific way to go about doing it using the DAO Admin UI, and I needed to have my NFT Delegated to my account to execute.

Moloch DAOs are powerful tools, but but there is a learning curve, which narrows the agency of the DAO in terms of direct democratic action.

3. Some Treasury Management Tasks require Admin Modules [a multisig].

Interacting with LPs require timestamps, and time sensitive balances in the transaction data, which means you cannot do that with a 3-5 Day Governance Window.

It is possible to automatically seed initial LP, because you set the terms, and it's probably possible to automate using oracle price feeds, a Deposit LP Function -- which takes assets held in the treasury and forms LP out of them.

These would require custom builds for each asset.

4. 6551 Account Share Claims caused an Initial Imablance.

One of the main issues in the beginning was an imbalance in the DAO shares, because I transferred the balance from the Admin Treasury to the Rage Quit Treasury before everybody had claimed their Shares.

Just Owning the NFT was not enough, people also needed to claim their Shares, and Delegate them to their accounts.

This design complexity was a way to adapt the Moloch v3 Codebase to having NFTs own shares without rewriting Moloch v3 Shares to be ERC 721 instead of ERC 20.

Basically - there was a design loophole, where the 6551 accounts could hold the ERC20 Shares as soulbound so that the NFTs could effectively "own" the Moloch v3 Shares.

Unfortunately, this required additional steps on part of the collectors / DAO members, and that friction made it more difficult to become engaged in governance, or initially balance out the treasury.

This lead to a problem where there was a disproportionate amount of value in the RQ treasury, because some actual members had not claimed their share -- and someone RQ for a profit.

These funds were replaced by DAOhaus, and we also batch claimed all of the shares.

But unfortunately, there were also shares in the treasury that were claimed, which pushed everybody's equity into a deficit until this most recent proposal:

• https://admin.daohaus.club/#/molochV3/0xa/0x912aab5913023d20a5dcd17160e6954528433a7f/proposal/2

5. Broken Game Theory, due to no secondary market.

The project was designed to reward holders, by socializing the benefits of people selling their shares on secondary markets -- but there is no secondary market for NFTs on Optimism.

We had initially hoped that Sudoswap would have deployed, but they chose not to, because of this lack of Trade Volume. This meant that each time someone needed to sell to exit their position, there was no demand.

Effectively people were trapped, getting lowball offers from other DAO members with less pressing financial issues -- which is not nearly as fun of a game.

What Could Have Been:

There were a number of solutions for how things could have moved forward:

1. If we had deployed to Base, that might have worked, perhaps allied more closely with Sudoswap, and integrated with Warpcaster. We might have gained enough interest on secondary markets to keep volume up. But Alchemix would need to also deploy Base Vaults.

2. We needed to have allocated some % of the initial treasury to DAO owned LP -- but for the NFTs themselves. On Sudoswap this would have meant that the NFTs held by the treasury could be set on a curve to be purchased by the public -- and ETH could be set at a lowball curve // floor price that the DAO agreed upon. In this situation, the spread between the Floor set by the DAO, and the price purchased by the users would have been profit for the DAO. With Sudoswap, this also would have been automated, not managed by the multisig.

3. We missed out on a couple of opportunities for OP Grants, due to not being large enough, or by missing a deadline by a few days on our initial deployment.

4. It would have been useful to define the DAO from the beginning as more of an Art Patron / LP Cooperative for multiple Assets. That way you could have yield, and OP Grants, and Sales Volume Profit directed toward expansion. -- meaning, more Batches of 69, NFT Collections, where figure artists could be paid to create basically Ad Campaigns to support other DeFi Projects -- and have them join the DAO.

5. At some point, when the membership reaches a large enough number, and the treasury has a handful of strong LP positions earning veAERO -- [we could also have been participating in the veAERO Flight School Program] -- you get to a place where you can issue out a Liquid Loot Token -- and transfer equity away from the NFTs into a transferrable ERC 20 with DAO owned LP for that Loot token.

Liquid Equity is interesting, because you could have a fair launch situation with Liquid Equity, where people want to farm with their Equity rather than dump it.

Meaning Members would be paid in AERO emissions for providing liquidity with their equity.

Which would create an Art / Marketing / DeFi Focused / LP Cooperative, sponsored by Aerodrome Emissions, and MicroGrants from DeFi Treasuries. With a handful of artists, and a nice treasury of LPs generating yield cash flow.

That was where I saw things going, but we ran into some friction, and I got a full time Job doing Writing / DeFi Ops for Compound DAO.

The Wind Down.

Big thanks to The Alchemix Team for the Grant, and to the Alchemix Community for joining in this experiment. And to Dekan from DAOhaus for taking lead in trying something new.

It's run for just under a year now - and it works, but not nearly as smoothly as we hoped that it might.

There will be an annoucement in the Alchemix Discord about burning your share to RQ. And your Mistress NFT will stay with your account forever.

VOTE:

YES: Manager Vault Ought to Take the Following Actions:

• Remove LP from Velodrome
  • Accept Rewards
  • Unstake LP
  • Break LP
• Pay off Debt to alETH Vault
• Sell veVELO to Alchemix Treasury

NO: Do Nothing.