FAQ
What is Alchemix?
Alchemix is a pioneering DeFi platform and community DAO that empowers users to unlock the potential of their assets through Self-Repaying, non-liquidating loans. Alchemix reimagines the traditional lending and borrowing experience, offering a secure and innovative way to balance spending and saving while mitigating the risks of liquidation.
How does Alchemix's self-repaying loan mechanism work?
Users can deposit supported assets into the platform and earn interest on those deposits. Through this process, users gain access to a credit-like facility that allows them to borrow up to 50% of the value of their assets. The interest earned on the total initial deposit automatically repays any outstanding debt, eliminating the need for monthly payments. Additionally, this innovative like-for-like asset borrowing mechanism ensures there is no risk of liquidation, providing users with peace of mind and a seamless DeFi experience.
What collateral types are supported by Alchemix?
Alchemix currently supports a range 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 corresponding synthetic alAsset value against your deposit. For example, if you deposit ETH, you can borrow alETH worth up to 50% of the value of your deposited ETH.
Is it possible to exit or repay my loan before it is fully repaid?
Absolutely! Alchemix allows you the flexibility to exit or repay your loan at any time, even before it is fully self-repaid. We offer a self-liquidation feature that can only be triggered by the depositor that enables you to repay outstanding loans by 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 at all with Alchemix.
How long will it take for my loan to fully repay itself?
The repayment timeline for Alchemix loans are subject to the variable nature of DeFi yields. As such, it is challenging to provide an exact timeframe for the loan to fully repay itself. However, a rough estimate can be determined by considering the Loan-to-Value (LTV) ratio and the interest rate. For example, a 50% LTV loan at 10% APR would take 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 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 our 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 remain secure, and you can have peace of mind knowing that your assets 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 alAsset?
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.
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 make a deposit into an Alchemist contract in Alchemix, you can only borrow the corresponding synthetic alAsset against your deposit (e.g., alETH against 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 as well as technical, financial, operational, and partnership hurdles and therefore do not have timelines. Security and following the correct processes will always take precedence over timelines.
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 our official Discord is the best way to receive prompt and helpful responses.
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