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The Alchemix Core Team has proposed an Aave Improvement Proposal (AIP) to list alUSD as a borrowable asset on Aave, with plans to expand the selection of stablecoin collaterals and yield earning strategies. The Alchemix protocol, which mints "mirror" al-Assets using deposited collateral and has no liquidations, can be paused or modified by a multisig, and controls the alUSD debt cap and collateralization ratio through DAO voting.
The Alchemix Core Team has proposed an Aave Improvement Proposal (AIP) to list alUSD as a borrowable asset on Aave. Alchemix, an evolution of the CDP model pioneered by MakerDAO, mints "mirror" al-Assets, such as alUSD and alETH, using deposited collateral. The collateral is then deployed to yearn, which repays users' debt and backs the dollar peg in the Transmuter module. Alchemix does not have liquidations in its system, allowing users to borrow to the maximum without fear of shifting market conditions. The team ensures the alUSD peg through several mechanisms, including a 50% LTV for minting alUSD, DAO-managed debt caps, the ability to repay debt in alUSD or DAI, and the Transmuter module, which guarantees 1:1 conversions of alUSD to DAI1.
0xfoobar discussed the future plans of Alchemix, which include expanding beyond the current setup of using DAI in the yvDAI yearn vault as collateral. They plan to expand the selection of stablecoin collaterals and yield earning strategies, with AAVE being a potential source of yield. Alchemix is predicted to become one of the larger liquidity providers to AAVE. The user also highlighted the benefits of alUSD to Aave users, stating that it is desirable to borrow because it is tightly pegged to various stablecoins and can be easily swapped. It can be used for yield farming, financing personal life, or speculating on the market. Alchemix plans to expand alUSD use cases through partnerships and integrations1.
In terms of security, the Alchemix protocol can be paused or modified by a multisig. The protocol controls the alUSD debt cap and collateralization ratio through DAO voting. Aave has conducted risk analysis on DAI, the current backing stablecoin of alUSD, and assigned an overall risk rating of B+. USDC and USDT strategies will be added as alUSD collateral later. The Alchemix DAO multisig and timelock wallet is the administrator for the alUSD token. It has the ability to grant and revoke other contracts the minter role. All alUSD minting is currently handled by the alchemist.sol contract. When version two is launched, the new contracts will also be granted the minting permissions1.
The user proposed that alUSD will only be used for depositing and lending, not as collateral. They provided the following parameters: Strategy: rateStrategyStableTwo, Base LTV As Collateral: 0, Liquidation Threshold: 0, Liquidation Bonus: 0, Borrowing Enabled: true, Stable BorrowRate Enabled: true, Reserve Decimals: 181. User 0xfoobar has proposed a Reserve Factor of 20% and initiated a vote with two options: to enable alUSD as a borrowable asset on Aave or not to enable it1. User MarcZeller supports the proposal, stating that alUSD is a great asset for V3 and emode. They believe that having alUSD in V2 as a 0% LTV asset is a good first step towards future inter-protocols synergies2.
Posted 2 years ago
Last reply 2 years ago
Summary updated 2 months ago
Last updated 09/12 13:53