[For discussion] Proposal to remove xALPACA requirement for high leveraged Automated Vaults


AIP-6 created a requirement to hold xALPACA to invest in the high-leveraged vaults ( https://docs.alpacafinance.org/governance/aip-details/aip-6.1-limiting-access-to-automated-vault)

However, we currently have a lot of extra capacity for the 8x AVs. Given the repurchasing mechanics, we are also less constrained by the vault’s size limit compared to when we were using the rebalance system.


By removing xALPACA holding requirement to invest in high-leveraged AVs, we will remove a barrier to entry and attract more demand and capital to the vaults.

This will be beneficial to the protocol and xALPACA holders from higher the resulting higher revenue.

The extra capacity already demonstrated that there is currently not enough demand from existing xALPACA holders to invest in these vaults, so it makes sense to open up the vault to the larger audiences.


We will remove the xALPACA holding requirements to invest in high-leveraged AVs, allowing anyone to invest into the vaults.


I agree that xALPACA holders will benefit from this change but what about xAUSD3EPS holders? What will replace, if anything, the incentive for providing liquidity in the Ellipsis pool?

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Do you think the feature can come back in the future in the case of new AVs launch?
It would make sense to give few days of private access to xAlpaca owners before the public can access.

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Should do this much earlier

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Good idea, but what about AUSD liquidity providers? They are locking their AUSD for a year and gain nothing at last.

If this proposal pass, I think what we can do is also unlock everyone who has locked their AUSD3EPS LP token, given there is no additional benefits for locking.

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If we run into cap issue again in the future, we can consider turning this back on.

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Thanks for raising this.

Yes I believe it’s a good idea to look at how we can attract more capital now that the AVs have been optimised.

What’s going through my mind is whether there are different ways to execute this? (without reinventing the wheel)

For instance:

  • Could it make sense to do this in phases?…for example, by going down to 1:2 ratio first for 3 months and see whether we fill them up more. The hypothesis here is that existing investor might use them more, but don’t have enough allowance from their xAlpaca
  • Ramp down or Ramp up?…would it be better to progressively lower the barrier to entry down to 0 or to have a promotional period where there’s no barrier and then increase it?

There are other things I’d ask to consider please:

  • Can we implement this with a 3-month test and learn period? Last time we voted it became hard to change because it was positioned as a definitive vote. Here I think we need to observe and then reassess after a while
  • Can we think of what data/metrics we can collect and analyse to assess the impact of this manouver? For example, things like “avg net inflow pre/post implementation” or “whether the inflow is coming from new investors or people with money in governance (using wallet IDs)” etc

Reducing the allocation ratio is certainly possible. However, as we are less constrained by the pool’s size limit, what we can potentially do is:

1.) Remove the xALPACA requirement,

2.) reinstate the requirement again if the vault is full and increase the cap, so only xALPACA holders can invest in the additional capacity.

I think this will be faster way to achieve a similar outcome.


I support this highly . 8x vaults doesn’t have enough liqudity.

And for ausd lp holders. We may find anything in future but currently, ausd has no utility but after perps we may open ausd perps which may be %50 less fee or smthing so more ausd holders will came.

Can’t go back in time lol.

I’m concerned about liquidity for AUSD drying up and what it means for AUSD minters. Can you expand on that?

first we need to know how much peple used the AUSD locking to get access to private AVs

There is only ~27k USD AUSD3EPS LP locked.


Thanks for the response. Let’s vote now!

I have created an AIP for this proposal. Any further discussion can be made in the new thread. [AIP-13] Removing xALPACA requirement for accessing high leveraged Automated Vaults

It will be put up for voting early next week.

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