Proposal

Burn all withdrawn alUSD and alETH from the Elixir contracts.

Context

The Alchemix Elixirs are special contracts designed to hold protocol-controlled funds in liquidity pools containing alUSD and alETH. There are currently 4 addresses that hold stakes in 8 different liquidity pools on Curve, Velodrome and Ramses. There are an additional 2 addresses that hold withdrawn alUSD and alETH from pools that were discontinued and as such are no longer operational.

The Elixirs serve as a source of revenue for the Alchemix treasury, collecting rewards from the pools and also a kind of price stability module. When the price of alUSD or alETH drops out of the target price range, the Elixirs can take action and reduce the circulating alAsset supply by withdrawing alUSD and alETH from the pools. This causes the pool balance to change and pushes the price of the alAssets higher.

The Elixirs have generally been shrinking since their introduction 3 years ago and now they hold a huge amount of alUSD and alETH that cannot be inserted back into the pools without pushing the price of the alAssets lower.

Burning the alAssets would close the loop, ensuring the AMO’s act in a similar manner to the Transmuter (AMOs burn alAssets to give LPers a larger share of underlying assets, similar to the Transmuter)

These are just sitting in the wallets and should be burned as the expansion of the Elixirs is not expected in the near to medium term and their simple existence is a security consideration in itself.

Voting

Voting is single-choice.

Yes, burn all Elixir-held alAssets No, do not burn Elixir-held alAssets Abstain