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The new AC project, Alchemix (English translation alchemy), just launched, once again exploded in the DEFI circle.
Let’s look at Twitter first, today there are 8,594 fans, and the growth rate is very fast. Two days ago, the fat man seemed to have only more than 5,000 people when he saw it.
In addition, the Alchemix Twitter account was created in August of last year. After the status was posted on October 11, it stopped updating. It was not until February 2 this year that the status was updated and several introductory articles were posted.
Screenshot time 2021/3/1
Looking at the price of the coin, Alchemix’s project governance token ALCX was only launched on Sushiwap the day before. The price was 15U/piece at the beginning, and it soon rose to almost 800U/piece. As of 7:21 a.m. on March 1, according to Coingecko’s data, the transaction volume was 21.89 million U.S. dollars, and the price was 606.10 U/piece.
Fatty joined the Alchemix related exchange group, and the discussion was very lively. Some older brothers who missed “slapped off” their thighs and laughed at themselves: “ALCX is too cruel, and missed another 100 million, hahaha.” And some well-informed older brothers have eaten the “meat” and silently exposed them. Add a screenshot of liquidity yourself.
Picture from Alchemix related exchange group
It is estimated that many older brothers will ask: Why is Alchemix so hot, and what are the innovations? How to participate now, is there still a chance?
The first question is too much to talk about, the fat man first asked the second question, that is, how to do it; then, I will introduce the innovation of the project to my brother.
Four ways to participate
Of course it is too late. The project token has only been launched for two days. It is a very new early project.
According to the project white paper, there are currently four ways to get rewards.
The first is to pledge the alUSD USD stablecoin through the alUSD pool (explained in detail later) to obtain the ALCX rewarded by the system. The staking principle is similar to that of staking SNX to produce sUSD, both of which are excess pledges. This is the project to encourage users to mint alUSD, allowing users to earn ALCX token rewards with a very low threshold.
The second is to put the alUSD in the hand into the alUSD-3CRV pool on the Curve to earn ALCX tokens rewarded by the system. The purpose of this is to allow the stable currency alUSD generated by the Alchemix protocol to circulate to a broader DEFI ecosystem through the currency exchange pool of Curve, and to increase the value of use.
The third is to add ALCX/ETH to Sushiswap to earn rewards. The way this is done is to promote liquidity to ALCX.
The fourth is to pledge ALCX to get rewards, allowing token holders to get more rewards by simply holding coins.
According to the project white paper, as more al-token series are launched, the corresponding liquidity reward pool will also be added to the yield farming system. The mining of these tokens is similar to the mining model of alUSD tokens.
Screenshot from the official website: Alchemix project development roadmap
Seeing this, many brothers may be confused, what the hell, mining a mine is so troublesome, and you need to generate alUSD tokens in advance. So what is alUSD token? What is al-token again? How to pledge to generate alUSD tokens?
Don’t panic, the problem is not big, then the fat man will show the old friends one by one.
Let’s take a screenshot of debank first. There are currently a large number of token assets locked in various DEFI protocols. For example, the two protocols of Maker and Compound together are worth about 1 billion U of tokens.
Looking at the entire Ethereum DEFI market, although the price of the coin has plummeted in the past two days, there are still 48 billion U of tokens that have been locked.
Screenshot time: 2021/2/28
Asset lock-up loses liquidity. For users, there is no cash flow on hand, and it is difficult to obtain further income. Take Fatty as an example. In the past few days, I shared a lot of good tokens on Knowledge Planet, but I don’t have U anymore, I can only watch. Uncomfortable:)
The emergence of Alchemix has greatly eased the pain points of losing liquidity and made Bishengcoin more efficient. How does it do it?
According to the project white paper published on February 24, on the Alchemix protocol platform, users can obtain synthetic tokens secured by revenue at zero cost during the process of locking and pledge token assets, thereby realizing the ability to increase future revenue immediately.
It should be reminded that not any tokens can be pledged and locked on the Alchemix protocol platform, only those tokens that already have a revenue generation mechanism on the chain. For example, a token already has a lending pool in the lending market AAVE or Compound, and has a certain annualized income.
There are actually many such tokens. For the sake of insurance, Alchemix has only tested one token, which is the stable coin Dai produced by staking on Maker. Users can pledge Dai to mint and generate a synthetic USD stablecoin called alUSD.
By the way, al here means Alchemix, alUSD is a synthetic USD stablecoin generated on the Alchemix platform, and al-token is other synthetic tokens generated on this platform.
According to the white paper, the project team plans to make a series of synthetic stablecoins first, that is, when DAI tests the waters almost, in the future, it will support more other stablecoins to generate alUSD through pledge casting. These alUSD will circulate in the relevant links of the Alchemix platform and generate value.
The picture below is the product framework of the Alchemix platform, which mainly includes four parts: Vaults, Transmuter, Treasury, and Farming.
Screenshot from the white paper
Seeing this picture, it is estimated that many old men will be dizzy again, what the hell? Don’t worry, you will be able to obtain the wealth code with patience.
Vaults are where users manage their pledged tokens. How does it work?
In the first step, the user needs to save the DAI in the contract, and then these DAI will be deployed by the Alchemix contract to Year’s yvDAI Vault to earn revenue.
In the second step, users can mint alUSD, up to 50% of the deposited amount of DAI. For example, if a fat man deposits 1,000 DAI, he can generate up to 500 alUSD. As Year’s yvDAI Vault continues to generate revenue, the user’s alUSD debt is also continuously reduced. If Fatty is left long enough, Fatty’s debt in the Alchemix Agreement will be completely paid off by the proceeds generated by Year’s yvDAI Vault.
The third step is to extract the deposited DAI. If the DAI/alUSD in the user contract exceeds 200%, the previously deposited DAI can be withdrawn, or alUSD can be minted until the Vault reaches 200% pledge rate.
Vaults have a thoughtful place. AlUSD and DAI are the same in the contract, so users can also use DAI to pay alUSD debts. In particular, when a user lacks funds to pay debts, he can even use DAI with a contract to pay debts. After the debt is paid off, you can withdraw the DAI stored in the contract at any time.
In the future, alUSD will be supported and synthesized by various stable currencies, not only DAI, but also USDC, sUSD, etc. Therefore, users face a risk that the prices of these stablecoins may fall off the anchor. In this regard, the white paper has a more detailed description, and the fat man will not expand too much.
Fatty believes that Transmuter’s translation into an alchemist is actually not very accurate. It may be better to understand Chinese as an alchemy station or an alchemy circle. Because here users can exchange their alUSD into DAI, which looks like alchemy.
The principle is also relatively simple. Alchemix will intercept a part of the income generated by all token assets of Year and send it to Transmuter. In this way, when the user pledges alUSD to DAI, there is a large amount of DAI available for exchange in Transmuter.
For example, suppose the fat man has 1200alUSD pledged into Transmuter, and 400 DAI of the income generated by Year is allocated to Transmuter. For the fat man, 400 alUSD will be offset and destroyed during the exchange, and finally 800alUSD and 400DAI.
There is a fun place here. When 1250 DAI of the income generated by Year is allocated to Transmuter, for fat people, 1250 DAI can be exchanged for 1200alUSD to achieve 50 DAI arbitrage. If the fat man didn’t do it, then the 50 extra DAI would be allocated to all other pledgers.
In this way, alUSD is more like a bond, which can be converted into DAI in Transmuter.
Treasury (Financial Treasury)
Alchemix’s Treasury (financial library) is not much different from the general DEFI project, and both use part of the proceeds as the future development fund of the project.
Specifically, 10% of the revenue generated by Year each time will be allocated to AlchemiDAO’s Treasury (financial library), which is mainly used to support the continuous development of the project agreement, and pays to developers and team core supporters, payment server Costs, and other ongoing expenses. The distribution of fees in Treasury is determined by voting by ALCX holders.
The main investment institution, but the fat man has never heard of
Alchemix also followed the scripts commonly used in the DEFI world to return governance to the community. According to the white paper, the team temporarily controls Treasury through a multi-signature wallet. With the launch of dAPP, the control will be transferred to the community, and the community will decide the distribution of funds.
In the previous section, Fatty has introduced four methods of ALCX mining.
In terms of token distribution, according to the white paper, 60% of the ALCX tokens will be distributed to the community, 20% of the tokens will be distributed to the DAO controlled by the community, of which 5% will be used for bug discovery bounties; 20% of the tokens will be distributed For the development team, keep it in a dedicated pool.
The token issuance process is divided into two stages. When mining started, 22344ALCX tokens were allocated in the first week, and thereafter, 130 ALCX token rewards were reduced every week. After 3 years, the token distribution shifted to a stable distribution, that is, 2,200 tokens were issued every week to support the sustainable incentive demand of the ecology.
The total amount of tokens is not clearly stated in the white paper, nor is it found on the etherum scan. It feels that the project party is taking one step at a time and making corresponding changes based on market conditions.
In general, this is a relatively slow release process, through gradual inflation, so that the system can operate peacefully in the market.
Before Alchemix went live, it was a less impetuous team after more than 6 months of development.
Moreover, AC continued to retweet during the project’s launch process, showing support. Although it is still unclear what role AC will play in this project, in terms of its style, it is very AC! Fully interpret the power of DEFI Lego through automation. And, this time is more complicated.
On the whole, Alchemix is built on Yearn, which allows asset liquidity to be released to a certain extent, and improves the future income of asset lock-up mining through automated methods. Currently, only stablecoins represented by DAI are supported. In the future, they will be combined with more Ethereum assets and enter a broader ecosystem.
Fatty believes that if the stablecoin series represented by DAI succeeds, and more mature token applications can be launched in the future, then the impact will be relatively large, and more assets will be gathered in Alchemix and Yearn. inside.
As the top-level asset portal, Alchemix will have a certain amount of power to distribute token assets, and those projects that participate in its ecological construction will benefit.
In addition, because of the complexity, the probability of bugs may be higher. Two days ago, furucombo, an automated combination tool, had problems again, and users lost a lot of money.
There are more details in the white paper. I should read it before participating. Fatty will also update the market’s latest understanding of the project and related developments in Knowledge Planet.
Finally, for the old brothers and sisters who want to participate, the fat man still said: do what you can, the principal is king.