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The unique thing about Alchemix loans is that they allow you to leverage your wealth without risk of liquidation. Another way to put this is that Alchemix allows you to borrow against an asset without carrying the risk of losing your collateral in the event of a market crash.
In order to setup a new Alchemix self-repaying loan you’ll need to visit the Vaults page. Here you’ll be presented with a list of available vaults where you can deposit any of the currently supported collateral assets.
Under each vault listed you’ll see which tokens can be deposited into that vault.
Let’s see how you can borrow against some of your ETH holdings with a new alETH loan.
First click on the + button on the Yearn WETH vault. This will open the deposit section which offers you several deposit options.
Let’s go from the top. The LTV tells you how much you’re able to borrow against your deposit. 50% means you’ll be able to borrow a maximum of half the deposited amount.
In this example the vault accepts WETH or yvWETH. Luckily there’s a handy conversion tool built into the WETH vault that allows you to convert your ETH to WETH during the deposit.
All you need to do is flick the toggle and the input box allows you to input the ETH amount you’d like to deposit.
Let’s input a value of 1 ETH.
Next we have slippage. With certain vaults, (like the Yearn vaults) when you deposit collateral Alchemix will convert it into the Yearn equivalent. This is how Alchemix is able to earn yield on your deposit in the background. In this case it will exchange WETH to yvWETH for you. Because exchange rates fluctuate, your vault will receive a slightly different amount of yvWETH in return. This is usually minimal and not something you need to worry about. In order to protect our users, you’re able to set your own slippage limits using the buttons provided, or specify a different amount here.
Now you can press ‘deposit’ and authorize the transaction in your wallet. If it’s the first time you’ve deposited into one of our vaults, two transactions will need to be confirmed. The first is the token approval and the second will be the actual deposit.
Once your transaction has completed you’ll be able to see how much you’ve deposited in the vault.
Now let's look at how to take a Self-Repaying Loan