Layer 2 Alchemix

Differences between Mainnet Alchemix and other chains

Alchemix's primary deployment is on Ethereum Mainnet. Alchemix also maintains deployments on Optimism and Arbitrum, as well as alAsset and ALCX deployment (but not Alchemists) on various other Layer 2 chains. Layer 2 Alchemix assets are technically denominated as xassets, because they are not technically identical to the Mainnet assets. Below are the key differences between Mainnet components and their Layer 2 counterparts:

ALCX

ALCX can only be minted on Ethereum Mainnet. Any amount of ALCX may be bridged to Arbitrum or Optimism through the connext bridge. When ALCX is bridged from Mainnet, it is locked in a lockbox contract and xALCX (Layer 2 ALCX) is minted on the Layer 2 chain. To bridge back, xALCX may be burned on the Layer 2 chain to claim ALCX from the lockbox on Mainnet. So long as the system behaves as expected, there would be no reason that xALCX on any Layer 2 could not be burned/bridged to claim equivalent ALCX on Mainnet.

alAssets

Like xALCX, alUSD, and alETH can be locked/bridged in any quantity on/from Mainnet to earn equivalent credit to mint xalUSD and xalETH (Layer 2 alUSD and Layer 2 alETH). Additionally, xalUSD and xalETH can be minted on Arbitrum and Optimism by taking a self-repaying loan. Lastly, bridging xalAssets between L2s is unlimited, but bridging xalAssets to Mainnet can only be done up to the extent that the corresponding alAsset has been bridged from Mainnet to any L2.

For example, assuming no other bridging has ever taken place: if you bridge 10 alUSD from Mainnet to Optimism, and then someone else takes an alUSD loan and bridges 10 OP-xalUSD from Optimism to Mainnet (or to Arbitrum), you will no longer be able to bridge any xalUSD back from Optimism to Mainnet (someone else has used the liquidity you created). However, you would be able to bridge your 10 OP-xalUSD from Optimism to Arbitrum. Ultimately, xalAssets are backed by a mix of Mainnet alAssets (through bridging) and the yield sources of that specific chain. OP-xalUSD is backed by Optimism future yield and alUSD bridged from Mainnet. Mainnet alUSD is only backed by Mainnet future yield.

This system helps create more liquidity on L2 chains, while ensuring that the primary Alchemix deployment (Mainnet) is insulated from the L2 chains. In that manner, xalAssets should generally be expected to have an equivalent or lesser value than Mainnet alAssets as bridging from Mainnet to L2s (as well as between L2s) is unrestricted while bridging from L2s to Mainnet is liquidity-based.

Alchemists

Loans on L2 chains behave the same as on Mainnet, where the available yield strategies are unique to each chain.

Transmuter

The transmuter behaves the same on L2 chains, where xalAssets can be redeemed over time at a 1:1 rate for the underlying assets. The flow to the transmuter is based on the yield for each chain. Note that users can bridge alAssets from mainnet to obtain xalAssets on an L2 and deposit them to the transmuter.

Elixir AMO

The AMO, where present, functions the same way on L2s as it does on Mainnet, where the backing is held in the alAsset liquidity pool and can be withdrawn single-sided as alAssets to increase the price, as dictated by governance.

Appendix - Connext Bridge

Alchemix uses the xERC20 + Lockbox standard pioneered by Connext. Currently, Connext is also the only whitelisted bridge. Bridging alAssets and ALCX is secured through Connext's system of sending cross-chain messages through the Arbitrum and Optimism canonical bridges. Connext has the right to pause their system. If bridging is ever paused for an unreasonable amount of time, Alchemix has the option to whitelist another bridging service to provide cross-chain messaging such that bridging can continue between chains. Because of this system, Alchemix is not exclusively dependent on Connext for bridging services. The bridge contracts on each chain are owned by Alchemix, with intent to turn ownership over to veALCX.