Alchemix (ALCX) is a DeFi platform that lets people borrow against synthetic assets. The synthetic assets Alchemix lends money on includes the Alchemix USD (ALUSD) stablecoin.
Interestingly, Alchemix claims to offer “self-repaying loans” that let borrowers leverage synthetic assets and cryptocurrencies. To explain, Alchemix creates synthetic assets backed by popular assets such as Tether (USDT), USDC Coin (USDC), Ethereum (ETH), and MakerDao (DAI). Users can use those assets as collateral for loans.
Importantly, they make Alchemix loans in the asset the synthetic token backs. For example, An Alechmix Tether loan borrower receives Tether.
They claim Alchemix only liquidates collateral when users ask. Hence, the collateral is always available. Thus, it is easier for users to borrow money and for Alchemix to build self-replaying loans using smart contracts. A smart contract is a digital robot or decentralized app (dApp) that performs a specific task. Alchemix’s smart contracts repay the loans.
How Alchemix Works
Alchemix operates a debt system. The basis of the debt system is AlchemixV2, the core contract that manages accounts and issues debt tokens.
The debt tokens are wrapped tokens that contain other cryptocurrencies or assets. For example, debt tokens that contain Tether (USDT) or Ethereum (ETH).
They claim AlchemixV2 can accept either yield-bearing assets or underlying collateral assets as loan collateral. Yield tokens have a maximum expected value that functions as a deposit limit. Maximum expected value makes it easier to govern the assets an limit exposure to synthetic asset risks.
They built AlchemixV2 to limit vault losses. There is a maximum loss feature designed to prevent loss of all the collateral.
Users can mint new tokens, repay loans, and liquidate capital with AlchemixV2. Every underlying token has repayment and liquidation limits that track the funds available.
Every Alchemix synthetic token has own mint limits that tracks the amount of funds limited. Those limits try to prevent trading losses through cooling.
Alchemix users deposit collateral which earns yield. The users can borrower against future yield, spend earned credits, or save earned credits.
The organization behind Alchemix, Alchemix Labs, also makes the Alchemix USD (ALUSD) stablecoin. They do not say what Alchemix USD’s relationship with the Alchemix debt platform is.
CoinGecko estimates that Alchemix USD was the 192nd largest stablecoin with a Market Capitalization of $180.637 million, and a 24-Hour Market Volume of $193,853 on 18 August 2022. They base those numbers on a Total Supply and Circulating Supply of 185.014million ALUSD. CoinGecko calculates Alchemix USD is not stable, it had a 97.46₵ Coin on 18 August 2022.
Conversely, CoinMarketCap gave Alchemix USD a 99.8₵ Coin Price, a $238.237 million Market Capitalization, a Fully Diluted Market Cap of $3.285 million, and a 24-Hour Market Volume of $93,921 on 18 August 2022. They base numbers on a Self-Reported Circulating Supply of 238.707 million ALUSD and a Total Supply of 3.291 million ALUSD.
Alchemix USD was CoinMarketCap’s 3,813th largest cryptocurrency on 18 August 2022.
What Value Does Alchemix (ALCX) Have?
In contrast CoinMarketCap gave Alchemix (ALCX) a $31.68 Coin Price, a $47.828 million Market Capitalization, a Fully Diluted Market Cap of $549.453 million, a Total Value Locked of $128.964 million, and a 24-Hour Market Volume of $4.348 million on 18 August 2022. They base those numbers on a 1512 million ALCX Circulating Supply, a Maximum Supply of 1.563 million ACLX, and a Total Supply of 1.701 million ACLX.
In contrast, CoinGecko gave Alchemix a $31.65 Coin Price, a $47.833 million Market Cap, a $24-Hour Market Volume of $23.518 million, a Fully Diluted Market Valuation of $75.728 million and a Total Value Locked of $129.949 million on 18 August 2022. They base those numbers on a Circulating Supply of 1.512 million ALCX, a Total Supply of 2.179 million ACLX, and a Maximum Supply of 2.393 million ACLX.
I consider Alchemix an interesting decentralized finance (DeFi) platform that could make money someday. Notably, Alchemix is offering a product people could use loans and is offering a stablecoin. I consider Alchemix a DeFi platform to watch because they are building a lending platform linked to stablecoins.
If you want to see the future of stablecoin lending and a DeFi protocol that a large investment bank could buy, Alcehemix is worth a look.