We propose conducting a special rebalance/reconstitution to include the 21co assets the community whitelisted for AMKT inclusion last month (see AMKT-IP-8 here)
Based on the reasoning outlined in AMKT-IP-8, including a reduced reliance on Wormhole as a bridge, we believe it’s most prudent for AMKT holders to reduce bridge risk and implement these assets now.
Motivation:
We believe reducing the number of outstanding third party dependencies improves the overall security of AMKT.
While there’s a tradeoff on decentralization and a reliance on a third party custodian with the 21co assets, we believe reducing the total number of third party dependencies improves security and that the risks associated with 21co’s custody is lower than risks tied to Wormhole’s bridge.
Implementation:
We propose a special reconstitution that will include a 1:1 swap for the following assets:
21BNB
21SOL
21AVAX
Should this move beyond the discussion phase, a date will be suggested to the community as the proposal moves to Snapshot voting.
Risk Factors:
The implementation features a reliance on 21.co, introducing a custodial trust assumption for the underlying assets.
Dependency on 21.co could adversely impact AMKT holders if the wrapped assets were found to be undercollateralized or otherwise rehypothecated.
If the 21.co wrapped asset contracts were to have a security vulnerability, AMKT holders could be adversely impacted.
If liquidity for 21.co tokens were to be insufficient, AMKT creations and redemptions could be adversely impacted.
Relevant Links:
Conclusion:
We recommend AMKT holders vote FOR our proposal to add the three new 21.co assets, limiting bridge risk for AMKT holders.