AMKT-IP-9: Special Reconstitution For Newly Whitelisted Assets

We propose conducting a special rebalance/reconstitution to include the 21co assets the community whitelisted for AMKT inclusion last month (see AMKT-IP-8)

Based on the reasoning outlined in AMKT-IP-8, including a reduced reliance on Wormhole as a bridge, we believe it’s most prudent for AMKT holders to implement these assets.

Motivation:

We believe reducing the number of outstanding third party dependencies improves the overall security of AMKT.

While there’s a tradeoff on decentralization and a reliance on a third party custodian with the 21co assets, we believe reducing the total number of third party dependencies improves security and that the risks associated with 21co’s custody are lower than risks tied to Wormhole’s bridged assets.

Implementation:

We propose a special reconstitution that will include a 1:1 swap for the following assets:

Wormhole Bridged BNB for 21BNB Wormhole Bridged SOL for 21SOL Wormhole Bridged AVAX for 21AVAX

Should this proposal pass, a date will be suggested to the community to optimize for best execution.

Risk Factors:

The implementation features a reliance on 21.co, introducing a custodial trust assumption for the underlying assets.

Dependency on 21.co could adversely impact AMKT holders if the wrapped assets were found to be undercollateralized or otherwise rehypothecated. (21co displays wallet addresses so reserves can be audited 24/7).

If the 21.co wrapped asset contracts were to have a security vulnerability, AMKT holders could be adversely impacted. (The 21co contracts were audited by Halborn Security)

If liquidity for 21.co tokens were to be insufficient, AMKT creations and redemptions could be adversely impacted.

Relevant Links: 21.co

Conclusion: We recommend AMKT holders vote FOR our proposal to integrate the three new 21.co assets with a special reconstitution.