This article is a complete guide on the Alchemix. The Decentralized Finance (DeFi) world has been all promising and hype in 2021. It has touched an evaluated price of over USD 11 Billion LOCKED in the DeFi lending market. Let’s take a look at what is Alchemix.
What Is Alchemix(ALCX)?
Alchemix is a platform. It is responsible for the production of yield-supported synthetic tokens. Users can obtain these tokens for zero expense in trade for securing collateral in the Alchemix system. It provides users the capability to take an advance on their expected yield quickly. These ALCX tokens are a robust DeFi fundamental and a new method to create derivatives based on yield rather than debt.
Self-paying lending platform @AlchemixFi has integrated #Chainlink Keepers to automate the harvesting of yield & repayment of user debt. Alchemix also sponsored the launch of an ALCX/USD Price Feed, enabling #DeFi apps to easily support its native token.https://t.co/hO0jNYphLK
In other words, Alchemix allows users to reimagine the power of DeFi by giving extremely adjustable instant loans that reimburse themselves over time. The longer users put their deposit, the more yield they can make and have more of their loan returned. It has the following three segments:
- Generate: Deposit DAI to mint alUSD. The alUSD is a synthetic stablecoin that tokenizes users’ expected yield.
- Automate: Yield derived by the security from yearn.finance vaults reimburse the loan gradually.
- Redeem: Convert alUSD into DAI 1-to-1 in Alchemix or purchase it on decentralized markets like Sushiswap or crv.finance.
How Does Alchemix Work?
In Alchemix, users deposit something to protocol. Once the deposit is done then it becomes security for a loan they can take out. For example, they can take out $1 for every $2 that they deposit. Next, Alchemix accepts these deposits and places them in Yearn’s safes to make yield. Gradually, that yield pays off the debt. The following points are displaying how exactly it works.
- Deposit on the Alchemix platform.
- Half of the deposit will be available as loans.
- The deposit gains profit gradually that reimburses the loan.
Alchemix: ALCX Token
The Alchemix protocol’s governance token is described as ALCX. The key metrics of ALCX are as follows:
- Token name: Alchemix
- Ticker: ALCX
- Based on the Blockchain: Ethereum
- Token Standard: ERC-20
- Token use: Governance
- Circulating Supply: 283,672.98
Alchemix offers yield farming to achieve several goals for the protocol. According to its whitepaper, Farmers are paid with ALCX tokens, which have governance voting powers.
Conclusion
As mentioned earlier, Alchemix is a method for producing a new variety of yield-backed synthetic assets. These al-tokens grant DeFi users a compelling new primitive to employ. The important thing to note here is that these tokens have various pegging methods like the Transmutation pool, adjustment of Vaults with tokens and incentivized pairs on AMMs, and driving for the selection of al-tokens in the more widespread Ethereum and DeFi world.
