Summary:
We propose rebalancing and reconstituting the AMKT index into just two assets, WBTC and wstETH, from the currently supported 15 assets in order to manage an orderly wind down of AMKT.
Following the proposed reconstitution, the index would initially be market cap-weighted based on WBTC and wstETH prices and would no longer rebalance or reconstitute following the reconstitution. Users can redeem their AMKT for that underlying WBTC and wstETH anytime.
This is more efficient for AMKT holders than a forced redemption, allowing AMKT holders to maintain market exposure via WBTC/wstETH and offering an easy exit path via redemption to the underlying components for anyone that wishes to redeem their AMKT.
Motivation:
AMKT has recently struggled to maintain its tracking to NAV as redeeming out of each of the components is too costly on mainnet and liquidity for many of the underlying components is reduced or non-existent.
Currently, AMKT holders have to redeem for the 15 underlying components, then sell each of these individually to get the full fair value of the tokens. Some of these assets do not have sufficient liquidity to be able to sell into at all. This operation costs end users in the form of mainnet gas fees and slippage on trading the underlying components.
A transition to just two highly liquid assets will ensure AMKT holders can always redeem when needed and can also hold onto their directional market exposure if they wish to.
What does this mean for me?
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If you have a small amount of AMKT on Polygon, Arbitrum, or Base, you can sell here.
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If you have a larger AMKT balance, we recommend bridging to Ethereum mainnet as redemptions can always be supported there. You can then redeem to WBTC/wstETH on app.alongside.xyz/mint-and-redeem or via the contract directly here.
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Weâll be sunsetting functionality on AMKT.com including pricing information and charts, with the experience dedicated to explaining how to sell or redeem your AMKT.
Risk Factors:
- AMKT holders would no longer have broad-based market exposure
Conclusion:
We recommend voting to rebalance AMKT into WBTC and wstETH during a special January 3rd, 2025 reconstitution in order to unwind AMKT and support this proposal to transition to two highly liquid assets backing the index so holders have the most options.
Should this forum post pass, the improvement proposal will move to an onchain Snapshot vote with more details.
