# Alchemix

> Alchemix is a DeFi protocol offering self-repaying loans. Deposit ETH or USDC into a Mix-Yield Token (MYT) vault, borrow the like-kind synthetic asset (alETH or alUSD) up to 90% LTV at 0% interest, and scheduled Transmuter redemptions repay the debt from your collateral while it keeps earning yield. No price-based liquidations. Live on Ethereum, Optimism, Arbitrum, and Base.

Website: https://alchemix.fi
Documentation: https://docs.alchemix.fi
GitHub: https://github.com/alchemix-finance
Governance token: ALCX
Current version: V3 (live since April 2026; V2 sunset)
Running since 2021

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## What Alchemix Does

Alchemix lets you unlock liquidity without selling your core position and without paying variable interest. You deposit ETH or USDC into a vault, where it is held as a Mix-Yield Token (MYT) that earns yield from strategies curated by the Alchemix DAO. You can mint alAssets (alETH or alUSD) worth up to 90% of your collateral's face value and deploy them however you like.

The debt never accrues interest. Two things happen to the position without any action from you:

1. Scheduled Transmuter redemptions pay down the debt. As Transmuter positions mature, the protocol takes MYT worth the redeemed amount out of your collateral and cancels the same amount of debt. This is the only automatic repayment mechanism.
2. Vault yield refills the collateral. Your collateral keeps earning as MYT. Yield does not reduce your debt directly. It replaces some or all of the collateral that redemptions remove, so your net value can hold steady or grow while the debt falls.

You can also manually repay part or all of your debt at any time, with no lock-in and no early repayment penalty.

## How Alchemix compares to typical DeFi lending

| Feature | Alchemix | Typical lending protocol |
|---|---|---|
| Interest rate | 0% (event-based fees only) | Variable |
| Max LTV | Up to 90% | Typically lower |
| Price-based liquidation | No | Yes |
| Collateral earns yield | Yes (held as MYT) | Varies |
| Automatic repayment | Scheduled Transmuter redemptions | None |

## Self-Repaying Loans — /vaults

Deposit ETH or USDC. The vault issues a like-kind synthetic asset (alETH for ETH, alUSD for USDC) that mirrors the price of what you deposited. Mint alAssets worth up to 90% of your collateral's face value.

Parameters:
- Collateral: ETH (into alETH debt), USDC (into alUSD debt)
- Maximum LTV: 90% (docs recommend ~20% as a conservative starting point)
- Interest: 0% (the balance never compounds upward)
- Automatic repayment: scheduled Transmuter redemptions drawn from collateral. Manual repayment available at any time.
- Position: represented as an NFT in your wallet
- Liquidation: no price-based liquidations (see Liquidations)

Use cases: access liquidity without selling; yield looping for amplified exposure; like-for-like LP with impermanent loss limited to peg moves; short-term capital while keeping the long-term position; F.I.R.E-style scheduled draws.

## Mix-Yield Token (MYT) — /mixed-yield

MYT is a Morpho Vault V2 vault (ERC-4626) with Alchemix's own curator, allocator, and strategy adapters. It holds deposits of ETH or USDC and routes them into several yield strategies selected by the Alchemix DAO. One ETH-denominated and one USDC-denominated MYT per supported chain.

- DAO selects strategies, sets target weights, rebalances as markets shift
- No lock-ups; redeem at any time
- A performance fee is skimmed from gross yield before crediting the remainder to the MYT price (see Fees)
- Two uses: standalone yield product, and collateral backing self-repaying loans

## Transmuter (Fixed Yield) — /fixed-yield

The Transmuter redeems alAssets 1:1 for the underlying value (paid in MYT) after a fixed term set per asset and chain under DAO governance. When alAssets trade below 1:1 on the open market, buying and depositing them locks in a fixed-rate return: the discount you buy at becomes your return at maturity.

- Term: set per asset and chain; check the current term in the dapp before depositing
- Vesting is linear: exit early and the vested share pays out in MYT while the unvested share returns as alAssets minus the early transmutation fee
- Redeemed alAssets are burned, reducing supply and supporting the peg

## alAssets (alUSD, alETH)

Synthetic debt tokens minted when you borrow from Alchemix.

- alUSD mirrors USDC; alETH mirrors ETH
- Fully collateral-backed; every alAsset in circulation is backed by at least 1 unit of collateral
- Inside Alchemix, 1 alAsset always equals 1 unit of debt
- On the open market alAssets can trade slightly below 1:1; the Transmuter's 1:1 redemption supports the peg over time
- alAssets are not algorithmic stablecoins

## Earmarking, Temporal Leverage, and the Redemption Rate

- As Transmuter deposits vest, the protocol continuously earmarks a matching amount of debt across all open loans, in proportion to each loan's unearmarked debt
- Earmarked collateral keeps earning yield until the exact moment of settlement. This is temporal leverage: you keep earning on collateral already designated for repayment
- Earmarked debt can be repaid early with MYT or the underlying asset; unearmarked debt can be repaid with alAssets
- Redemption rate: annualized Transmuter volume against total system debt; a higher rate means faster debt clearance. A live rate of 0% with a "future" rate beside it means MYT the Transmuter already holds is covering matured redemptions

## Fees

All fees are on-chain parameters set by the admin multisig under DAO governance and read live from contracts. Verify current values in the dapp.

| Fee | What it is | Current rate |
|---|---|---|
| Borrower redemption fee | Charged on the redeemed amount when earmarked debt is settled from collateral (including manual repayment of earmarked debt) | 0.25% (Ethereum, Optimism, Arbitrum); 0.10% (Base) |
| Transmuter claim fee | Applied when a Transmuter depositor claims at maturity | 0.00% |
| Early transmutation fee | Charged on the unvested alAssets returned when exiting the Transmuter early | 1.00% (Ethereum, Optimism, Base); 2.50% (Arbitrum) |
| MYT yield fee | Skimmed from gross yield before crediting the MYT price | 5.00% (ETH vault, Ethereum); 15.00% (all other vaults); 17.50% (USDC, Base) |
| Liquidator fee | Paid to whoever liquidates an unhealthy position | 1.50% (not charged on self-liquidation) |

There is no interest and no early repayment penalty. Repaying unearmarked debt with alAssets carries no fee.

## Liquidations

Liquidations in Alchemix V3 are a system-wide safety valve that activates only when the MYT loses backing. Because debt and collateral are like-kind (ETH backing alETH, USDC backing alUSD), ETH or USDC price volatility alone cannot force positions to close. Only a fall in the value the MYT reports (an exploit, a strategy reporting negative returns, or an oracle-priced strategy trading below its underlying) can push a position toward the fixed 95% liquidation threshold. Self-liquidation, which only the position owner can trigger, repays the outstanding loan from the deposited collateral and returns the remainder, with no liquidator fee.

## Farms — /farms

Earn ALCX token rewards and LP fees by providing liquidity across Curve, Convex, and Velodrome. Pairs include ALCX/WETH, alUSD/3CRV, alETH/frxETH, and others. One-click staking with zap-in for most pools.

## Governance

Alchemix is governed by the Alchemix DAO. ALCX holders lock tokens as vqALCX (vote-escrowed) to vote on strategy allocations, fee parameters, transmutation terms, protocol upgrades, and treasury management.

- Forum: https://forum.alchemix.fi/public/
- Governance app: https://alchemix.fi/governance

## Supported Chains

- Ethereum
- Optimism (OP Mainnet)
- Arbitrum One
- Base (USDC)

## Security

Alchemix is one of the longest-running DeFi lending protocols (since 2021). V3 uses open-source infrastructure (Morpho Vault V2), DAO governance for all parameter changes, cross-chain bridge verification through multiple decentralized verification networks (DVNs), and fundamental oracles. Audit reports: https://docs.alchemix.fi/user/safety/security

## FAQ

### What is Alchemix?
A DeFi protocol for self-repaying loans. Deposit ETH or USDC, borrow like-kind alAssets at 0% interest, and scheduled Transmuter redemptions repay the debt while your collateral keeps earning.

### How does the loan repay itself?
Scheduled Transmuter redemptions. As Transmuter positions mature, the protocol takes MYT worth the redeemed amount out of your collateral and cancels the same amount of debt. Your collateral keeps earning yield the whole time; the yield itself does not reduce debt.

### Is there any interest?
No. 0% variable interest and the balance only moves down unless you mint more. Event-based fees apply to redemptions, early Transmuter exits, and generated yield.

### Can I get liquidated?
Not from ETH or USDC price moves. Only a loss of value in the MYT itself (strategy losses or exploits) can push a position past the 95% threshold.

### Can I repay early?
Yes, at any time: unearmarked debt with alAssets, any debt (including earmarked) with MYT or the underlying asset. No penalties.

### What is MYT?
Mix-Yield Token: a Morpho V2 ERC-4626 vault holding ETH or USDC across DAO-curated yield strategies. It is the collateral for Alchemix loans and a standalone yield product.

### What is the Transmuter?
A fixed-yield mechanism: deposit alAssets and receive 1:1 underlying value at the end of a fixed term. Buying below peg locks the discount in as your return.

### What are alAssets?
Fully collateral-backed synthetic debt tokens (alUSD, alETH) minted by borrowing.

### What chains is Alchemix on?
Ethereum, Optimism, Arbitrum, and Base.

### Where are the audits?
https://docs.alchemix.fi/user/safety/security

## Links

- App: https://alchemix.fi
- Docs: https://docs.alchemix.fi
- GitHub: https://github.com/alchemix-finance
- Discord: https://discord.com/invite/alchemix
- X / Twitter: https://twitter.com/AlchemixFi
- Forum: https://forum.alchemix.fi/public/
- Medium: https://alchemixfi.medium.com
- Newsletter: https://alchemixfi.substack.com