What is Alchemix (ALCX)?

Deep Dive

1. Purpose & Value Proposition

Alchemix solves two key DeFi challenges: liquidation risk and capital efficiency. By collateralizing assets (like ETH or stablecoins) into vaults that generate yield (via strategies like Yearn Finance), users can borrow up to 50-90% of their collateral’s value as alUSD or alETH. These loans “self-repay” as the vault’s yield gradually covers the debt, eliminating forced liquidations. This creates a safer way to access liquidity while keeping assets productively deployed (Alchemix Docs).

2. Technology & Architecture

The protocol uses synthetic tokens (alUSD/alETH) backed by overcollateralized deposits. For example:
- alUSD: Minted against stablecoin deposits, redeemable via a “transmuter” that converts alUSD to DAI over time using accumulated yield.
- alETH: Backed by ETH deposits, with yield generated through staking or liquidity pool strategies.

The v3 upgrade (August 2025) introduced Meta-Yield Tokens, simplifying yield strategies, and fixed-duration redemptions to stabilize alAsset pegs (Alchemix v3 Announcement).

3. Tokenomics & Governance

• ALCX Emissions: Fixed at 2,200 tokens weekly indefinitely, down from higher initial rates. Emissions reward liquidity providers (80%) and contributors (20%), ensuring long-term alignment.
• Governance: ALCX holders vote on treasury allocations, risk parameters, and integrations (e.g., recent LayerZero bridge adoption for cross-chain transfers).

Conclusion

Alchemix reimagines borrowing in DeFi by turning collateral into a productive asset that repays itself, reducing risks while maximizing capital utility. With its v3 upgrade enhancing flexibility and peg stability, will its synthetic assets become a staple in decentralized finance?