Alchemix is a decentralised finance (DeFi) lending protocol that offers self-repaying loans without the risk of forced liquidations. It allows users to deposit assets to generate yield, which is subsequently used to repay the loan. Alchemix is built on the Ethereum blockchain and uses a unique mechanism to offer financial services to its users while leveraging smart contracts for automation.
Alchemix operates by allowing users to deposit cryptocurrency as collateral in exchange for synthetic assets, known as alAssets. The deposited assets generate yield through integration with external DeFi protocols like Yearn Finance. This yield is then used to automatically repay the user's loan over time. The protocol eliminates the risk of liquidation by ensuring that loans gradually repay themselves, making the platform user-friendly and efficient. Governance within Alchemix is managed using the ALCX token, which allows holders to vote on protocol upgrades and decisions.
Alchemix offers several use cases within the DeFi ecosystem:
Alchemix was launched in February 2021 by a pseudonymous team led by an individual under the alias "Scoopy Trooples". Since its inception, Alchemix has reached several significant milestones, such as achieving over $600 million in total value locked (TVL) and launching the second version of its protocol, Alchemix v2, which introduced new yield strategies and collateral types. The platform has also integrated Layer 2 solutions to enhance its efficiency and has gained a strong market presence, exemplifying significant growth and technological evolution in the DeFi space.