Zunami DAO Vote Id:9 - Add alUSD/FRAXBP Strategy.

Zunami Team is excited to announce that voting is now open for the addition of Convex - alUSD/FRAXBP as as a new protocol strategy. A proposal has been submitted to the DAO for review and approval to add the strategy and transfer funds.



Protocol description: Alchemix Finance is a future-yield-backed synthetic asset protocol and community DAO. Alchemix offers a self-paying, interest-free, and non-liquidating loan product in the DeFi space. Think of it like a bank where you deposit money and receive interest on your deposit, with a credit card attached to the account. This credit card allows you to spend up to 50% of the deposited asset, with a small percentage of its value being sacrificed upfront. No interest or monthly payments are required on the debt, which is denominated in the deposited asset, avoiding any liquidations. The interest earned on the total initial deposit automatically pays off any debt you have.



Stablecoin Description: alUSD is a synthetic stablecoin that have soft peg to the US dollar, issued and backed by Alchemix. With Alchemix, users can mint alUSD by depositing USDT, USDC, or DAI as collateral into approved yield farming strategies. The maximum amount of alUSD that can be minted is 50% of the collateral deposit. For example, depositing 100 USDC would allow you to generate up to 50 ALUSD. The market capitalization of alUSD is 53 million dollars.

Smart contract risk:
 Alchemix v2 was audited by Runtime Verification. Alchemix continues to engage Runtime Verificaiton for additional audits on protocol changes. The v2 audit report can be found here: https://github.com/runtimeverification/publications/blob/main/reports/smart-contracts/Alchemix_v2.pdf Alchemix offers a bug bounty program through ImmuneFI. The program can be found here: https://immunefi.com/bounty/alchemix/ Alchemix ran a one-off code4rena contest. The contest can be found here: https://code4rena.com/contests/2022-05-alchemix-contest


Depeg and Default risk:
 alUSD is backed by a combination of the three largest stablecoins with a collateral ratio from 200%. To maintain the stability of the peg, the Transmuter is utilized. Users deposit alUSD into the Transmuter. As the yield, liquidations, and repayments come in, it will credit users (for example) DAI proportional to the amount of alUSD they have staked, relative to the total amount of alUSD staked. When a user chooses to withdraw the converted DAI, an equal amount of alUSD will be burned. Alchemix also have have an Elixir, which is modeled after the Frax AMO, whereby if the price of alUSD goes down too far, they can take some alUSD out of circulation to help restore the price


Custody and governance risk: 
Alchemix operates as a decentralized autonomous organization and uses on-chain governance through voting to minimize the risk of custody issues. The core contracts are designed in a way that prevents administrators from accessing user funds, ensuring that your assets are secure. For more information on administrative rights, visit https://alchemix-finance.gitbook.io/user-docs/multisig-admin-rights.



Collateral Risk:
 Only USDT, USDC, and DAI can be used as collateral to mint alUSD. The collateral ratio is maintained at a minimum of 200%.

Risk of stop incentivization Alchemix, with its 378k CVX treasury, uses it for voting and pool is also incentivized by FRAX. No risks of low yields in the near future are expected."

Pool Description: https://curve.fi/#/ethereum/pools/factory-v2-147/deposit The pool is balanced with TVL around 38M and APY over 16.6% when staking LP in Frax Booster.

Strategy features:

• Deposit of stablecoins (USDT, USDC, DAI) in the alUSD/FRAXBP pool on Curve
USDT and DAI are automatically exchanged for USDC
• Lock alUSDFRAXBP3CRV-f LP tokens for 7 days in Frax booster on Convex
• Relocked it 1 time a week
• Automatic sale and reinvestment of CRV, CVX and FXS rewards.
 Actions:
• Add «Convex - alUSD/FRAXBP Pool" strategy as one of the Zunami Protocol strategies.
• Rebalance part of the funds from the "StakeDAO- MIM pool" to "Convex - alUSD/FRAXBP Pool".