hash algorithm: blake2b-256
body: Alchemy by Sundial x Charms: Cardano-Native Bitcoin Treasury Protocol
  abstract: Alchemy is a Cardano-native Bitcoin treasury protocol and BTCfi infrastructure layer proposed by a collaboration between Sundial Protocol and Charms. It gives Cardano reusable infrastructure for transparent, on-chain Bitcoin-backed structured exposure: reserve architecture, composable FIRE (BTC+) and ICE (BTC-) assets, public dashboards, integration adapters, monthly reporting, and staged launch liquidity. The proposal requests 10,000,000 ada, using a reference value of approximately USD 0.20 per ada for a total planning budget of approximately USD 2.0 million. The request is split into two separated pools. Pool 1, approximately USD 1.0 million, supports protocol infrastructure and staged launch liquidity. This pool is treasury-supported, kept separate from operating spend, deployed in tranches, and designed so that profits, yield, and returns generated by the launch liquidity position are returned to the Cardano Treasury quarterly. Pool 2, approximately USD 1.0 million, funds delivery, audit, integrations, dashboards, governance reporting, legal/compliance work, and go-to-market execution. The withdrawal is self-contained, denominated in ada, independent of any Budget Information Action, and designed to comply with the current Cardano Constitution and the prevailing Net Change Limit. Intersect is proposed as interim fund administrator, subject to confirmation and final agreement. Any administrator-held ada will be kept in auditable accounts and delegated to auto-abstain, not to a Stake Pool Operator. Sundial and Charms also commit to a rollover clause: if external investment funds Alchemy development, the development portion of this treasury request rolls into additional treasury-supported launch liquidity instead. The Treasury funds additional Cardano BTCfi depth, not duplicate compensation.
  motivation: Cardano has the architecture, governance maturity, and community ambition to compete for Bitcoin liquidity, but it still lacks a production BTCfi infrastructure layer. Bitcoin is the reserve asset of the digital asset economy, yet Cardano does not currently offer a credible, transparent, Cardano-native way for users, wallets, DEXs, and DeFi protocols to hold, deploy, compose, and report on Bitcoin-backed financial primitives at ecosystem scale. The result is a strategic gap. Bitcoin liquidity is becoming one of the most important inputs in decentralized finance, structured products, and institutional digital asset strategy, but most of that activity is consolidating elsewhere. Ethereum, BNB, Solana, and Bitcoin-adjacent ecosystems are building products around BTC-backed yield, tokenized treasury instruments, synthetic stability, and structured exposure. Cardano risks being treated as a governance and staking ecosystem rather than a home for Bitcoin-native capital. This is not a theoretical market. Public-market Bitcoin treasury products have shown that there is meaningful demand for senior and junior Bitcoin-backed exposure. Strategy's common and preferred equity products, Strive's Bitcoin-backed preferred stock, and newer on-chain products such as Apyx, Saturn, and related yield markets show that investors want structured access to Bitcoin's upside, stability, and yield characteristics. These instruments are not identical to Alchemy, but they validate the category: Bitcoin-backed financial exposure is a real and growing market. The numbers confirm it. As of mid-June 2026, Strategy (formerly MicroStrategy) reports 846,842 BTC acquired for approximately USD 64.1 billion. Strategy also reported USD 5.6 billion in year-to-date STRC gross proceeds and STRC daily trading volume of approximately USD 375 million in its Q1 2026 results. MSTR remains one of the most liquid public-market Bitcoin proxy equities. Together, these figures demonstrate enormous institutional and re…
  rationale: This treasury withdrawal solves the stated problem by funding a complete Cardano BTCfi infrastructure package: protocol mechanics, launch liquidity, safety controls, integrations, reporting, administration, audits, and go-to-market execution. The on-chain change withdraws 10,000,000 ada from the Treasury to fund that package under defined restrictions and oversight. The result is a deployed infrastructure layer with visible liquidity, public accountability, and ecosystem utility. Alchemy has three core infrastructure components. First, Alchemy creates a shared BTC reserve architecture with transparent safety mechanisms. FIRE and ICE are backed by the same BTC reserve. The reserve ratio measures BTC reserve value against outstanding ICE liabilities: (V x P) / L, where V is BTC in the vault, P is the BTC/USD price, and L is total ICE liability in USD. FIRE price is calculated from residual reserve value after ICE liabilities: ((V x P) - L) / N+, where N+ is total FIRE supply. The initial target reserve ratio is 5.0x. The system launches with substantial overcollateralization rather than thin backing. Safety zones constrain behavior as reserve conditions change. Above 4.0x, normal FIRE and ICE minting and redemption are enabled and ICE growth continues under formula. Between 2.0x and 4.0x, new ICE minting and FIRE redemption are constrained while the system dynamically balances incentives. Below 2.0x, FIRE and ICE minting and redemption are constrained and new risky activity pauses to protect reserve integrity. These rules are designed to prevent overleveraging that puts ICE holders at risk and prevent value-destructive dilution for FIRE holders during stress. Second, Alchemy issues two composable Cardano-native assets. FIRE is high-temperature Bitcoin: the volatility-absorbing residual claim that receives upside from the shared reserve after ICE commitments are met and takes first-loss downside when BTC falls. It creates amplified BTC exposure without liquidation mech…
  references: Other
    label: Alchemy Simulator
    uri: https://www.sundialprotocol.com/alchemy/visualizer
  references: Other
    label: Original Proposal
    uri: https://docs.google.com/document/d/1FfXhDdxp-96LC0d54cwC7h8nU0GyJO3koNFZto4dDAA/edit
  references: Other
    label: Strategy Bitcoin purchases dashboard
    uri: https://docs.google.com/document/d/1FfXhDdxp-96LC0d54cwC7h8nU0GyJO3koNFZto4dDAA/edit
  references: Other
    label: Strategy Q1 2026 results
    uri: https://www.strategy.com/press/strategy-announces-first-quarter-2026-financial-results_05-05-2026
  references: Other
    label: Current Cardano Constitution Update
    uri: https://cardano.org/news/2026-01-22-update-cardano-constitution/
  references: Other
    label: 2026-2027 NCL reference
    uri: https://governancespace.com/en-us/proposals/331