What is Alchemix?
Alchemix is a DeFi protocol and DAO for self-repaying, non-liquidating loans. You deposit collateral, borrow a synthetic alAsset against it, and the yield on your deposit repays the debt over time. Because the debt is denominated in the same asset as your collateral, your position is not exposed to liquidation from price movement.
How does the Alchemix self-repaying loan mechanism work?
You deposit supported assets and earn yield on them. Against that deposit you can borrow up to 50% of its value. The yield earned on the full initial deposit repays the outstanding debt over time, so there are no monthly payments. Because you borrow a like-for-like synthetic asset, the position is not exposed to liquidation from price movement.
What collateral types are supported by Alchemix?
Alchemix currently supports a variety of collateral types, including ETH, DAI, USDC, USDT, and FRAX. These assets can be used as collateral for obtaining self-repaying loans on the platform. You can also deposit yield-bearing tokens.
How much can I borrow against my deposited collateral?
When you deposit collateral on Alchemix, you can borrow up to 50% of the value of the corresponding synthetic alAsset. For example, if you deposit ETH, you can borrow alETH worth up to 50% of the value of your deposited ETH, even if the alETH to ETH ratio differs from 1:1.
Is it possible to exit or repay my loan before it is fully repaid?
Yes. You can exit or repay your loan at any time before it is fully self-repaid. The self-liquidation feature, which only the depositor can trigger, lets you repay outstanding loans using a portion of your deposited collateral. Once the loan is repaid, you can withdraw the remaining collateral. There are no lock-in periods or penalties.
How long will it take for my loan to fully repay itself?
The repayment timeline for Alchemix loans depends on the variable nature of DeFi yields. Consequently, providing an exact timeframe for the loan to fully repay itself is challenging. However, a rough estimate can be made based on the Loan-to-Value (LTV) ratio and the interest rate. For example, a 50% LTV loan at 10% APR would take approximately 5 years to repay.
0xDefi has a tool to calculate how long your loan will take to repay here. This is a third-party tool, so please use it at your own risk.
Is Alchemix audited?
Yes, Alchemix has undergone various audits, conducted by reputable auditing firms, including Runtime Verification, Code4rena, and Immunefi.
Alchemix v2 was audited by Runtime Verification as well as a Code4rena contest. Alchemix also has an ongoing bug bounty program through Immunifi.
See the Audits here
Can I be liquidated?
No, you cannot be liquidated by third parties on the Alchemix platform. Your debt is denominated in the same currency as the collateral, which means that the price fluctuations of the asset do not impact your vault position. Regardless of market volatility, your vault positions are protected from liquidation.
On what networks is Alchemix available?
Alchemix is available on multiple networks, providing users with options for accessing its services. Currently, Alchemix can be accessed on Ethereum Mainnet, Optimism, and Arbitrum.
An up-to-date list of available networks may be viewed on the network selector at the upper-left of the UI.
What can I do with my alAssets?
The primary use case for your alAsset (e.g., alUSD, alETH) is to swap it for another asset. You can achieve this by utilizing decentralized exchanges, such as curve.fi, or popular swap aggregators like Matcha, Zapper, or Paraswap. These platforms enable you to trade your alAssets for various other tokens, providing you with the flexibility to diversify your portfolios or acquire specific tokens based on your investment preferences.
In addition to swapping, you can leverage your alAssets to provide liquidity on certain decentralized exchanges, such as Curve, Saddle, and Velodrome, and earn gauge rewards. You can earn yield directly with your alAssets, should you choose. Keep up to date with the latest opportunities at https://alchemix-stats.com/earn
How can I participate in the governance of Alchemix?
Participating in the governance of Alchemix allows you to actively contribute to the decision-making process and shape the future direction of the protocol. To participate in governance, you need to use ALCX tokens to vote. You can also join discussions in the governance channels of the Alchemix Discord server.
What is the Transmuter?
The Transmuter is an alAsset price stability module. Users can deposit alAssets, and over time, the Transmuter will gradually convert the alAsset to the corresponding underlying token on a 1:1 basis. Read more here.
Can I borrow any token against my Alchemix Deposit?
The short answer is no. When you deposit into an Alchemist contract in Alchemix, you can only borrow the corresponding synthetic alAsset against your deposit (e.g., alETH for ETH). However, you can take your alAsset and swap it in the market for whatever tokens you want.
When will 'Token X' be available as collateral on Alchemix? When will you be
on 'Chain X'?
New collateral and new chains are subject to governance approval and must also overcome technical, financial, operational, and partnership hurdles. As a result, they do not have fixed timelines. Security and adherence to proper processes will always take precedence over meeting specific deadlines.
How can I contact the Alchemix team for support or inquiries?
Discord is the primary platform for engaging with the Alchemix team and the wider Alchemix community. Whether you have questions, comments, or suggestions about Alchemix, reaching out in the #support channel in the official Alchemix Discord is the best way to receive prompt and helpful responses.