ALCXEUR
ALCX / Euro
crypto Kraken

Alchemix Finance is a platform built on Ethereum to give users an advance on their future yield. Users deposit collateral into the platform in order to take out a loan, in the form of synthetic tokens, that is automatically repaid over time using the yield generated from the deposited collateral. This allows users to instantly receive an advance on the yield of their deposited collateral. Because the tokens minted by the Alchemix platform are synthetic versions of the deposited collateral, users are not exposed to liquidation risk. Users are able to manage their advanced yield positions using vaults. Users deposit an asset, such as Dai, into a vault that Alchemix then deploys to Yearn to start generating yield. The deposited asset serving as collateral, users can now mint synthetic tokens, alUSD in this case, which is backed by the future yield of the deposited Dai. Specifically for Dai, users are able to mint alUSD up to 50% of the value of the Dai deposited. The alUSD loan is paid down every time yield on the initial Dai deposit is harvested and will eventually pay off the full balance of the loan. As the balance of the loan decreases and the collateralization ratio falls below 200%, users can either withdraw a portion of their deposited Dai or mint additional alUSD tokens until their collateralization ratio moves back to 200%. If a user wants to withdraw their deposit at any point, they must pay off their debt using either the base asset or its Alchemix-synthetic equivalent (i.e. Dai or alUSD) or liquidate a portion of their collateral to cover the loan. A user can remove their collateral once they have no debt remaining. Collateral left in the vault without a corresponding loan will continue to earn yield in the form of the asset's synthetic equivalent until it has been withdrawn. Alchemix utilizes the Transmuter to assist in maintaining a peg for its synthetic tokens, allowing users to exchange Dai and alUSD one-for-one. The protocol harvests yield from the underlying Yearn vaults on a frequent basis, which counts towards paying of user's loans and is subsequently transferred into the Transmuter. Users can stake their alUSD into the Transmuter and, as yield comes in, the staked alUSD is converted into the base asset over time, basically behaving like a maturing bond. Transmuting allows a user to pay off their alUSD loan quicker than they would if they solely relied on the yield generated by the protocol vault. Users can transmute (i.e. unstake) at any time, at which point they will receive the base asset converted from their staked alUSD plus the remainder of their staked alUSD that was not converted to the base asset.