Background:

AUSD was sunset as per AIP-25 back in October 2023. However, there is still a significant amount of AUSD remaining in users’ wallets and corresponding ~$400k worth of assets in the stable swap module (assets in the stable swap module are there for users to redeem against.) A community member suggested that a vote could be done to repurpose the assets in the stable swap module.

Rationale:

A sufficient time has passed since the sunset of AUSD and it’s highly likely that these assets belong to dormant wallets. These stable assets can be swapped with ALPACA tokens and have remaining AUSD holders redeem against ALPACA instead.

Execution:

Users will be given a 45-day notice period before we execute the swap.

There are two options to execute the swap, with the differences being where the ALPACA tokens would come from.

Option#1: Buy ALPACA off the open market

• Use the remaining stablecoin in the stableswap module to buy ALPACA in the open market.The purchase will be a TWAP over a period of time.
• Once completed, AUSD holders will be able to redeem their AUSD for ALPACA.

With this option, we would immediately reduce the ALPACA supply from the market and the ALPACA are effectively “burned” unless redeemed by users. T

Option#2: Doing an OTC with the warchest

• Mint ALPACA from warchest and do an OTC with the stablecoin in the stableswap module, effectively converting a portion of the warchest into stablecoins for future uses.
• AUSD holders will be able to redeem their AUSD for ALPACA instead.

With this option, there would be no immediate impact to the circulating ALPACA supply. It would only increase if users redeem them against the USD

Voting:

This is the first vote in a series of vote for this AIP.

Vote#1: will be a simple YES/ NO vote where

• A YES vote would implement the swap of the asset in the stablecoin module
• A NO vote would leave the assets as is