Price (USD)$ 18.57
Circulating SupplyALCX 1.63453M
Volume (24h)$ 1.38421M
Market Cap$ 30.35802M
Low/High 24h$ 17.98 - $ 18.76
Change (24h)$ 0.505875
The DeFi field is rich with fascinating crypto projects. Decentralized finance is tipped to be the next big thing in the cryptocurrency and blockchain technology arenas. Put simply, the phenomenon refers to projects that aim to provide traditional financial services – such as loans, savings accounts, and asset exchanges, but without requiring a third-party intermediary. Let’s take a closer look at one of its most curious projects, Alchemix.
Alchemix Finance is a DeFi protocol and a future-yield-backed synthetic asset platform and community DAO founded by pseudonymous developers led by Scoopy Trooples. The project went live in February 2021. The main feature of Alchemix is that it allows for the creation of synthetic tokens that represent the future yield of a deposit. The platform provides flexible instant loans that repay themselves over time. It solves the risk of getting liquidated for leveraging your position.
The DAO (Decentralized Autonomous Organization) will focus on funding projects that will help the Alchemix ecosystem grow, as well as the greater Ethereum community. The Alchemix DAO will receive income from the Alchemix protocol, with a portion of the yield earned going into the treasury. The treasury will pay out developers and permanent staff to maintain and expand the protocol. In addition, treasury funds will pay for audits of the protocol and any of its future products.
The Alchemix DAO will fund projects that build on Alchemix or use the alchemical synthetic tokens in their applications.
The first of the platform’s products, “Vaults,” is the centerpiece of the Alchemix ecosystem and uses Yearn.Finance and other platforms as building blocks for yield on underlying assets like stablecoins and ETH, with support for additional assets coming in the future. Vaults act as the hub to generating yield, against which the system can issue the synthetic alTokens, and share similarities to lending platforms such as MakerDAO and AAVE. Currently accepted collateral assets are DAI, USDC, USDT, ETH and liquid staking tokens stETH and rETH.
Essentially, the Vaults give users a flexible line of credit for their future yield. Users can enter and exit anytime without committing to long lockups. There will never be a liquidation of a user's collateral unless they do it themselves because your debt will only ever go down.
Another component of the DeFi project is the so-called “Transmuter” and the “Elixir”. The Transmuter allows users to stake their synthetic assets and have them be converted into their base assets over time. It is essentially one of the primary pegging mechanisms for the alTokens alongside the Elixir. Harvested yield will flow directly to the Transmuter and the Elixir as it comes in. The transmuter ensures that participants will be guaranteed a 1:1 redemption of alUSD and alETH for the underlying assets over some period of time. The Elixirs hold a share of the main alAsset liquidity pools and are able to take actions to stabilize the pegs of the alAssets should they drift too far below 1, thus helping maintain a higher instant exchange rate for alAssets. In short, the platform’s users deposit stablecoins and ETH to Alchemix as collateral in order to mint alUSD and alETH, which are synthetic protocol tokens that tokenize a user's future yield. The deposited assets are then used to generate yield in Yearn and other strategies and pay down the users’ outstanding debt.
An Alchemix crypto loan isn't the same as a bank loan. The bank asks you for credit history, identification, and employment data before considering your loan. An Alchemix loan only requires a collateral deposit in the form of stablecoins or ETH.
Depositing in the Alchemix Vaults allows you to mint up to 50% of your collateral amount as alUSD and alETH. This is made possible by Alchemix taking your collateral and depositing it in the Yearn Finance vaults or other strategies. As Alchemix harvests yield profits from these strategies, the amount of assets belonging to Alchemix users rises, thus paying your loan off in time.
As the protocol automatically pays your debt down, your borrowing power increases.
If you deposit collateral but don't mint alAssets, you have an interesting option available. The protocol yield farms for example on Yearn with your DAI, but instead of paying off your loan (since you don't have one), your borrowing power increases.
The counterparty to these loans is the curve finance liquidity pools. Liquidity providers are incentivized through CRV and CVX rewards to provide collateral or alAssets to the liquidity pools so that users may instantly swap between alAssets and the underlying collateral. This is how users are able to sell their alAsset loans in order to make other purchases in crypto and in DeFi.
The Alchemix governance token is ALCX. It’s an ERC-20 token used to incentivize liquidity for the Alchemix protocol. Its primary use cases are governing the Alchemix DAO and rewarding network participants for providing liquidity. The ALCX emissions follow a predefined curve of decreasing emissions, falling to a constant 2200 tokens per week emission rate at the 3-year mark, representing a ~4.5% annual inflation at that point in time. The current token supply can be viewed at https://alchemix-stats.com/.
The ALCX token can be staked to gain additional ALCX and/or used in the protocol's governance. The Alchemix governance token is split among the developers, the DAO itself, and the community, with the vast majority going to the community. ALCX emissions are used to pay developers, community contributors, and to incentivize liquidity within the Alchemix system.
ALCX coin value has fluctuated ever since its launch and, like most projects in the crypto field, it has enjoyed its fair share of popularity. At the moment, it’s valued around $$22.83 on CoinMarketCap and it ranks #458. It reached its all-time high in 2021 with a whopping 2000 USD per coin. However, it’s still unclear if it is going to repeat its past success as just 25 days ago, it dropped to a fracture of its all-time low, $16,94. Let’s take a look at what crypto experts are saying.
PricePrediction analysts are certain that the trend for Alchemix coin will remain bullish. They believe that the price will only grow, with ALCX going up to $1,039.73 by 2031.
Crypto experts at DigitalCoinPrice are not as enthusiastic: according to their estimates, the Alchemix token price will go only as high as $126.20 by 2031.
PortalCripto claims that by 2030, Alchemix can reach a maximum possible level of $196.47, with the expected average price of $148.05.
A curious website, BitScreener, that predicts crypto prices on the market in relation to Bitcoin, claims that ALCX price will exceed $210 later in 2022.
The future of ALCX remains a total mystery. The market is full of both negative and positive price predictions, with some experts claiming that ALCX crypto price will rise up to thousands of dollars, while others are predicting its quick demise. The value of Alchemix largely depends on what its developers do in order to promote the project. For now, we can only safely say that any crypto investment is risky and requires careful consideration.
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Don’t forget to do your own research before buying any crypto. The views and opinions expressed in this article are solely those of the author.
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