Nowadays, according to CoinGecko, DeFi is the 8th most significant sector of the ecosystem, with more than $154 billion in marketcap and $8.5 billion in 24-hour trading volume. Here, we can find hundreds of protocols that have been created in different chains.
However, there are only a few of them that are providing very high value. Therefore, you will discover Alchemix, a DeFi protocol with a unique concept, in this article.
What is Alchemix Protocol?
Alchemix is a self-repaying, no liquidation loan protocol. For example, you usually deposit a stable coin, ETH or BTC, when you want to get a collateralized loan. Well, in Alchemix, Yearn Finance is the place where the funds will stay.
Then, the user can borrow synthetic assets, which can be repaid anytime with the yield from the collateralized fund. This means that the longer the loan term, the greater the value of the collateralized fund, which will repay the loan at a higher rate.
Alchemix' core product is a self-repaying, no-liquidation loan. Users deposit their asset (currently $DAI or $ETH) into an Alchemix vault. In turn, those funds are deposited into the respective @iearnfinance yield-bearing vaults.
— 0x7d54 (@0x7d54) December 27, 2021
For example, if you inject 100 ETH into Alchemix, you will be able to get borrowed up to 25 $alETH, Alchemix’s synthetic asset. This means that you will pay the 25 alETH you have as a loan with the profits of the 100 ETH deposit. If you get the loan in 4 years, the protocol will auto-pay the loan’s monthly payments with the monthly earnings of the 100 ETH you deposited.
This means that users can even have another loan with the same initial investment, or the user can let the loan pay itself off or withdraw the initial fund.
Other Profitable Opportunities Using Alchemix
There are five amazing opportunities that users can take advantage of with the borrowed funds:
- Farm the borrowed $alUSD or $alETH directly for good yield.
- Swap $alUSD to another stablecoin to get better yields.
- Take a high-risk position that could 100x or to 0.
- Get Alchemix’s tokens, swap for a stablecoin to purchase a real-life asset.
- Deposit Alchemix’s native token, $ALCX, to Token Reactor to get $tALCX tokens and stake them into Alchemix with an 80% APR.
On the other hand, users will deposit $BTC and other stablecoins to withdraw $alUSD with high yields and shorter self-payoff timelines.
$ALCX Price Outlook
When writing this article, $ALCX is currently trading at $302.21 with a marketcap of $284.9 million, a 24-hour trading volume of $47.8 million, and $1.3 billion in TVL.
Also, the circulating supply and total supply are 942,723 and 1.6 million tokens.
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