Alchemix Finance

May 11, 2021

5 min read

Advancing Alchemix with Chainlink

Mapping new constellations in DeFi

Understanding the Alchemix — Chainlink Integration

Alchemix is a self-repaying lending protocol that routes the deposited collateral of users to Yearn vaults, where their earned yield is automatically used to repay their loans. This effectively acts as an advance on a user’s future yield over time, providing users with a way to deploy their assets in a more capital efficient manner.

See the overview above to understand the Alchemix user experience
  • High-Quality Data — Chainlink Price Feeds source data from numerous premium data aggregators like BraveNewCoin and Kaiko, leading to price data aggregated from hundreds of exchanges, weighted by volume, and cleaned from outliers and wash trading. This generates accurate global market prices that are resistant to black swan events or centralized exchange failures.
  • Secure Node Operators — Chainlink Price Feeds are secured by independent, security-reviewed, and Sybil-resistant oracle nodes run by leading blockchain DevOps teams, data providers, and traditional enterprises. Chainlink nodes have a strong track record for reliability, even during high gas prices and infrastructure outages (e.g., Infura).
  • Decentralised Network — Chainlink Price Feeds are decentralised at the data source, oracle node, and oracle network levels, generating strong protections against downtime and tampering by either the data provider or oracle network.
  • Economy of Scale — Chainlink Price Feeds benefit from an economy of scale effect, where increasing adoption allows multiple projects to collectively use and fund shared oracle networks to fetch commonly required datasets. This allows DeFi projects to get premium data quality and robust oracle security for a fraction of the total cost.