Alchemix USD (ALUSD)
Alchemix USD (ALUSD) is a synthetic stablecoin product of the Alchemix protocol. It is a token based on Ethereum, Fantom, and the Optimism blockchain. [1][3]
Overview
Alchemix allows users to borrow a synthetic stablecoin ALUSD without the need of a collateral. [3]
Users deposit their assets and get ALUSD, a loan tied to their future earnings. The platform automatically repays the loan over time using the profits from the deposited assets. Alchemix lets users access their deposit profits upfront, like time-traveling their yield, while the protocol handles repayments through background yield farming strategies. [4]
Self-repaying Mechanism
The self-repaying mechanism of Alchemix works as follows: [2]
- Initial Deposit: Users deposit various cryptocurrencies, such as DAI or USDC, into the Alchemix protocol. These assets are then used to generate ALUSD.
- Synthetic Stablecoin: ALUSD is a synthetic stablecoin pegged to the value of one US dollar. Users can use ALUSD like any other stablecoin, for trading, investments, or payments.
- Yield Farming: The assets deposited by users are actively utilized in yield-generating strategies. The yield generated is used to repay the ALUSD loan over time.
- Debt Repayment: Users don't need to actively repay their loans. Instead, the borrowed ALUSD is gradually covered as the assets generate returns.
Alchemix x mStable
By pairing with mUSD in a Feeder Pool, ALUSD holders can access another source of liquidity for their ALUSD via mUSD, which serves as a bridge token for stablecoins in the mUSD basket and other Feeder Pools. Liquidity Providers for the alUSD/mUSD basket can earn multiple sources of yield for this liquidity and obtain exposure to a capital efficient stablecoin pair. [7]
