What is Alchemix Finance?
Alchemix Finance is a decentralized finance (DeFi) protocol that offers innovative self-repaying loans. It allows users to deposit collateral in the form of assets such as DAI or ETH into its vaults, which are then used to generate yield through integrations with other DeFi platforms like Yearn Finance. The yield generated from these deposits is used to automatically repay the loans over time, making them interest-free and non-liquidating.
The core concept behind Alchemix is to provide instant access to future yield, enabling users to borrow synthetic stablecoins like alUSD or alETH against their collateral. These synthetic assets can be used across the DeFi ecosystem, traded, or staked to earn additional rewards. The platform ensures the stability of its synthetic assets through mechanisms like the Transmuter, which maintains a 1:1 peg between alUSD and DAI by balancing supply and demand.
Alchemix's governance is managed through its native token, ALCX, which allows holders to participate in decision-making processes regarding the protocol's development, fund allocation, and other important aspects. The introduction of Alchemix V2 has brought more flexibility to users, allowing them to choose their yield strategies and collateral types, further enhancing the protocol's functionality and user experience.