Motivation

Alchemix operates primarily via a DAO Multisig of founders, contributors, and community members that acts as the primary DAO mechanism. The goal of Alchemix is to turn over power to on-chain governance. While Alchemix v3 is being built with the specific objective of incorporating on-chain governance, the Alchemix DAO needs a key partner to provide services aligning with the Alchemix DAO’s interests – such as managing treasury farming and payroll operations, signing agreements, marketing… etc.

In an ideal world, users will always trust some combination of immutability, on-chain governance, and legal entities. Where DAO Multisig powers and other responsibilities do not have a clear path to on-chain governance, they can instead be left to a legal entity. For the reasons set out below, the Swiss association has proved to be the best of the various options we have analyzed

Swiss Association Benefits

Switzerland was chosen for its crypto-friendly environment, clear regulatory framework, favorable tax regime, and supportive banking sector. The Swiss association (among all available entity types) was preferred for the following reasons:

• The Swiss association has rights of personhood and can therefore hold assets, funds, enter into contracts (for example Gauntlet Aera per AIP 111);
• The Swiss association provides liability protection to the association members and board members, as only the association’s assets are used to meet liabilities.
• The Swiss association is a flexible vehicle. The organization as well as the purpose of the Swiss association can evolve and be adapted to the needs of a project.
• The Swiss association is not allowed to provide any financial benefits to its members, which means that the Swiss association cannot distribute any funds to its members in the form of dividends or other benefits.

Alchemix Association

The Alchemix Association is a Swiss entity and has its registered office in Zug, Switzerland.

The bodies of the Alchemix Association are:

• The general assembly of members; and
• The board

The Alchemix Association will be composed of contributors/founders/community members.

Association Purpose/Mission

The purpose of the Association is to foster the growth of the Alchemix ecosystem; to enable technical and operational development by hiring and managing contractors, to drive strategy, partnerships, and governance, and to help evolve legal, security, and overall best practices in supporting the Decentralized Autonomous Organization of Alchemix DAO.

Alchemix Association / DAO Relationship

The objective has always been to ensure that ownership and control of the DAO remain with the token holders. The structuring of the Alchemix Association upholds such objective. In line with its statutory purpose, the Alchemix Association shall assist the Alchemix DAO in its continued growth and in achieving its goals under the principal – agent relationship.

In this model, the legal entity is an independent service provider that is engaged by the DAO to act on its behalf and promote the growth of the ecosystem. The legal entity co-exists with the DAO and does not act as a “legal wrapper”. This means that the legal entity does not protect the DAO and its members from potential liability. On the other hand, this model ensures that the control over Alchemix effectively remains with the DAO.

The establishment and funding of the Association aligns with the principal-agent model, as the Alchemix DAO decides:

• What powers the Alchemix Association shall have (see the requests below). It means that the responsibilities of the Alchemix Association will not overlap with the DAO Multisig and will, therefore, be truly separate. The intent is to pass as many responsibilities as possible from the existing DAO MultiSig to the Alchemix Association.
• Whether the Alchemix Association remains a trusted partner: The DAO may, at any time, choose to contract with fund another legal entity instead of, or in addition to, the Alchemix Association. In the event of the dissolution of the Alchemix Association, any assets remaining after the payment of all debts/liabilities will be distributed in accordance with the purpose of the Alchemix Association after a vote of its members, which permits the assets to be sent back to the DAO. In this perspective, the Alchemix Association intents to request quarterly renewal of its agreement with the DAO

Distribution of Roles and Responsibilities

Based on this governance proposal, responsibilities within the Alchemix ecosystem will be divided between the DAO and the Association as follows:

• Alchemix DAO Responsibilities: The DAO will remain in operation as a DAO Multisig with snapshot vote signaling from ALCX holders, eventually moving to on-chain governance. The DAO will retain control of Alchemist, Transmuter, AMO, and bridging contracts as well as continue to receive all protocol income. All of these responsibilities are intended to be handed over to on-chain governance pending development and launch of Alchemix v3.
• Alchemix Association Responsibilities: The Alchemix Association will assume the following responsibilities):

1. Managing the existing treasury funds consisting of the liquid and illiquid assets described below.
2. Managing and fulfilling admin roles for the Alchemix smart contracts, excluding Alchemists, Transmuters, xalAssets (xERC20-enabled Layer 2 alAssets) and AMOs.
3. Holding, licensing, and enforcing the intellectual property rights related to the Alchemix brand.
4. Maintaining the public GitHub repository of Alchemix
5. Managing the social media accounts of Alchemix
6. Entering into agreement with selected external service providers and paying corresponding service fees
7. Engaging in any commercial and non-commercial agreements that support the purpose of the Alchemix Association

To empower the Alchemix Association to fulfill the above responsibilities, the DAO shall transfer the following assets to the Alchemix Association:

• All assets listed under https://alchemix-stats.com/ excluding 50,000 ALCX tokens

After the transfer is complete, all future transfers of assets from the DAO to the Association will require the DAO to pass a governance proposal.

By accepting this governance proposal, the Alchemix Association irrevocably waives its right to claim any intellectual property rights relating to the Alchemix brand and authorizes the Alchemix Association to reach out to DAO individuals and enter into the necessary agreements to secure the rights required to fulfill the listed responsibilities.

Requests

At this time, the newly established Alchemix Association is requesting Approve the transfer of the responsibilities and assets listed above

Voting

For/Against/Abstain the above request…