Alchemix Review

Alchemix Review: What is it and is it safe to use?

19.07.2022 13:10
by Srđan Jovanović
7 min read

Alchemix self-repaying loans allow you to leverage a range of tokens avoiding the risk of liquidation. You avoid liquidation by borrowing a synthetic version of the amount you deposit. With Alchemix, you can spend and save at the same time and borrow up to 50% of your deposited collateral.

Alchemix is the first same-asset loan product on decentralized finance (DeFi). Powerful DeFi lending primitive contains many features and applications for users and new exciting features for developers.

Alchemix is launched in March 2021, so it is still a very young DeFi lending protocol. While the Alchemix platform is relatively new on the market, it is quickly adding compatibility with more cryptocurrencies.

What is Alchemix?

What is Alchemix

Alchemix is an Ethereum-based DeFi lending platform upon which loans automatically pay themselves back over time. Alchemix ecosystem introduces a new and improved way for paying off debt. While many stablecoin-backed DeFi lending platforms exist, most leave it up to the user to manage paying off their debt. Alchemix automates this process for users. This makes it different than lending platforms such as AAVE, Compound Finance, and CoinLoan.

Alchemix allows users to create synthetic tokens that represent deposit’s future yield. The tokenized value of the deposited stablecoins can be retrieved instantly. The bank uses the revenues from deposits for the amortization of the debts owed on its customers. The longer the deposit stays, the higher your income is and more money is available to repay it.

Alchemix has raised $4.94 million in the previous month. The price charts on the token show that it’s a fantastic choice to earn more.

Let’s learn more about Alchemix features.

What is ALCX?

What is ALCX

Alchemix developed their independent altcoin, ALCX. ALCX is an Ethereum coin which regulates Alchemix Financial, an application that allows the user to open collateral-backed loans which can be automatically financed using the earnings generated from the security. ALCX will allow submitting or voting on changes to protocol.

ALCX token

ALCX token

ALCX tokens are ERC-20 (Ethereum Request for Comments 20) tokens that are used to incentivize and govern liquidity for the Alchemix protocol. The primary use is to govern the Alchemix DAO (decentralized autonomous organization) and to reward the participants on the network for providing liquidity.

The Alchemix developers developed the protocol independently. ALCX token has no hard caps, however offers a rigorous emission schedule. Alchemix developers, founders and community developers receive a special stake pool of 200% of token rewards. Approximately 16% of emissions occur.

Alchemix DAO

Alchemix DAO & Wallet

Alchemix gets its profits from protocol revenue while part of the earnings is paid to the government. Treasury pays the permanent staff and developers to maintain and expand the protocols. A further bonus is a treasury fund to finance parliamentary auditing activities. Alchemix DAO (decentralized autonomous organization) supports projects on the platform using the Alchemix Synthetic Token. Alchemix plans on utilizing the full Onchain governance model for the long term, enabling complete control over several parameters for the communities in the industry.

Alchemix Wallet

The Alchemix protocol is a decentralized loan service with no independent wallet to ensure security. Protocols do not support holding trade funds for traders. Users are also allowed access to the protocol used to deposit and withdraw ALCX tokens.

Features of Alchemix

Alchemix Features

Alchemix has a wide assortment of credit services available.

Token distribution

Alchemix governance token split developers because of their values for fair launch. Alchemix token grants governance powers to the DAO. Despite the lack of cryptocurrency tokens, the company developed a separate token that was independently owned by cryptocurrencies and cryptocurrency companies.

Vaults

Alchemix has created a Vault which serves to generate yield advancements. Similarly it resembles other loan platforms like AAVE & MakerDOO. Visit their websites for more information. Vault accepts DAI for collateral.

Transmuter

Transmuter follows a primary pegging mechanism for their synthetic tokens. The Transmuter ensures that all participants get a 1:1 redemption of the alUSD for DAI tokens.

Farming

Alchemix offers yield farming and farmers will be rewarded ALCX tokens, which will have governance voting rights in the ecosystem.

Alchemix Deposit and Withdrawal Process

The deposit and withdrawal process of Alchemix is carried out as follows.

Users deposit DAI — a stablecoin built on Ethereum, generated by MakerDAO — to Alchemix, as collateral in order to mint alUSD, a synthetic protocol token that tokenizes users’ future yield. The deposited DAI is then used to generate yield in Yearn. Finance vaults, and the yield is used to pay off the loan. Depending on the depositor’s intentions, synthetic assets like alUSD can be converted back into DAI and subsequently exchanged for fiat, or they can be put to work generating even more yield in Alchemix staking pools or liquidity pools.

First, send DAI to one of the wallet providers on Alchemix – WalletConnect or Alchemix. Then, authenticate the wallet on the Alchemix platform. Go to the Deposit button in the Vault section and deposit the DAI from the wallets into Alchemix. Select Borrow on the Vault page and borrow alUSD. In trading with ALCX, you can borrow a maximum of 50% of the total deposit. Finally, stake the alUSD in the pool through Farm and start earning.

Withdrawal works like this: First, you should liquidate the collateral for repaying the borrowed quantity of the USD. Then, you can withdraw alUSD beyond the protocol’s ecosystem or claim a part of what you earned over time.

What is Alchemix protocol?

What is Alchemix protocol

It is an Ethereum token which controls Alchemix Finance – a protocol that allows borrowers to take secured loans that are credited automatically with yields from the bonds. ALCX may help propose modifications or approve them as they are needed.

The investors’ recent efforts to raise funds will help the token and its prices should continue to rise throughout the coming decade. Experts say the token is expected to reach $866.78 USD by 2025.

Alchemix price

Alchemix price is currently $19.66 USD. ALCX tokens cannot be directly bought with cash. However, investors can use fiat-to-crypto marketplaces to first purchase Bitcoin, Ethereum and other digital currencies with fiat money and then they can transfer the digital currency to respective altcoin exchanges like Alchemix.

Is ALCX a good crypto?

The experts expect many things from the token but the underlying token is also incredibly valuable to the investors in general. Its price is expected to go up very quickly on the market in late 2020 and by late 2023. During the period 2020 the expected market value for the token is estimated at $6680.55 USD.

Is Alchemix a good investment?

Is Alchemix a good investment

Alchemix crypto is, just like all other cryptocurrencies, an investment that you take at your own risk. It does have higher probability of going up than down because of the good use case, well-designed tokenomics, active community and a solid team behind it. All of these are a prerequisite for success and that is some prediction models sees Alchemix rising up to $107.25 in 2030. Investment advice would be to go for it.

Alchemix is already a platform for users interested in capital-efficient loans that allow their collateral deposits to generate yield in the background. It offers several unique features and benefits to users, such as the ability to customize their loan structure and yield strategy, borrow against stablecoins without risk of traditional liquidations, and enjoy low-maintenance lending with crypto-backed loans that amorize themselves automatically. Alchemix also presents a lucrative opportunity for participants to deposit collateral in order to mint synthetic assets that they can then stake and provide liquidity for — even if they never intend on withdrawing funds.

The live Alchemix current price is around $19 USD with a market cap of $26.303.212 USD on this date. Alchemix price has dropped in the last 24 hours. If you want to buy Alchemix at the current rate, you should check out the top cryptocurrency exchanges for trading in Alchemix stocks: Binance, OKX, Bitget and BingX. The world loves this new crypto trend in trading.

Is it safe to use Alchemix?

To sum up this Alchemix review, it can be said that Alchemix is one of the fastest-growing lending protocols that continues to expand their unique value position with the independent altcoin, ALCX. It’s a risky investment, but safe to use. We recommend conducting your own research before investing and trading on the crypto market. 

Disclaimer: All information contained here should not, under any circumstances, be construed as financial advice, investment recommendation or an offer of, or solicitation for, any transactions in cryptocurrencies.

Author

  • Long-time editor, crypto enthusiast, and all for free trade. Also a social scientist, musician, and a thorough-going liberal. Wrapped up a degree in linguistics, an MA in politics, and a PhD in history. Six postdocs afterwards. Speaks English, Serbian, Czech, and Swedish, communicative in German, Russian, Polish, Italian, Slovak, Norwegian, and even some Mandarin. Cryptocurrencies are the future.

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