Alchemix (ALCX)

Lending platforms are popping up all the time giving crypto investors a variety of options for earning extra income from their idle funds. Prominent among them is the Alchemix project (ALCX) – a protocol that helps borrowers mortgage assets without any risk of liquidation.

What is Alchemix?

Alchemix Finance is a decentralized cryptocurrency borrowing platform built on Ethereum. Users can deposit funds into the platform to borrow assets in the form of Synthetic tokens, which are automatically repaid over time using the interest generated on the collateral.
This allows the user to immediately receive an advance on the yield of the collateral. Since the token generated by the Alchemix platform is a synthetic version of the collateral, the user does not bear the risk of liquidation.

Outstanding features

What is the project trying to achieve?

When users stake their tokens/coins on Alchemix, the system will issue a number of tokens corresponding to the mortgaged debt. At the same time, Alchemix allows users to instantly restore or retrieve the cryptographic value of deposited tokens/stablecoins. This makes it possible for both borrowers and lenders to pay or repay crypto debts automatically. Alchemix can then use the profits earned from the deposits to repay its users.

In addition to profits through DeFi activities, users receive an income based on the arbitrage mechanism of the value of aggregate assets received through purchase and sale transactions on Alchemix. So the platform is possessing a dual profit mechanism.

Alchemix aims to help users not need to sell the tokens they want to hold for the long term. Instead, users can collateralize tokens in exchange for a smaller amount of collateral to invest in other projects. In particular, the platform will not liquidate any of the customer's mortgages.

Basically, Alchemix's mode of operation includes the following 3 stages:

• Stake (mortgage) into the Alchemix system.
• Up to 50% of the deposit value (collateral) will be loaned.
• A deposit that is profitable over time will automatically repay the loan.

What is unique selling point?

Alchemix provides a lot of features related to the financial lending field for users including Farm, Vaults, ALCX Token, Transmuter, DAO,...

Vaults

The Vault feature provided by Alchemix acts as a hub to generate profits. This feature is similar to other lending platforms like AAVE and MakerDAO. Vault accepts DAI as collateral.

Users can Stake DAI into Vauts contracts. This Stablecoin will then be deployed by Alchemix Smart Contract to earn profit in Yearn yvDAI Vault.

Transmuter

Transmuter available on the Alchemix platform works as the main anchor for their synthetic tokens. This mechanism will ensure that all participants can exchange alUSD for DAI tokens at a ratio of 1:1

When depositing alUSD into Transmuter, profit will be credited to DAI users proportionally based on the amount they deposited. When withdrawing DAI, an equivalent amount of alUSD will be “burned”.

Treasury

Alchemix's vault works on the basis of a mechanism: 90% of the profits earned will go to Vauts and Transmuter, and the remaining 10% will go to the treasury.

Profits are distributed proportionally:

• 60% of ALCX tokens will be distributed to the community.
• 15% of the supply is community-controlled and dedicated to the DAO
• 5% of the supply is used as a bounty to whoever discovers the platform's bugs and is also reserved for the DAO.
• The rest will be allocated to Farming.

Alchemix Knife

Alchemix DAO acts as a developer Multisig and notifies via the Snapshot app. The ALCX token will provide holders with administrative rights regarding protocol decisions and treasury usage.

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