Alchemists have nothing to fear, not even the bear

The crypto community have been rocked by the recent price crash that wiped over 50% off the value from Bitcoin and Ethereum’s recent all time highs.

By May 19th $662 million in loans in DeFi had been liquidated in the previous 24hrs. Whilst the negative effects of the crash were felt far and wide the good news was that DeFi as a system just went to prove how robust it was. Specifically Alchemix performed 100% as intended, not one user was liquidated as a result of the destabilising effect on token prices. Anyone that understands how Alchemix works knows that users can’t be liquidated so this fact should be no surprise.

Did anything positive come from the crash…oh yes

Apart from the obvious lack of liquidations there were a handful of other interesting benefits worth mentioning:

Since Dai rose above its dollar peg, users began to arbitrage Dai by converting alUSD to it. This was good for both Dai and alUSD by both stabilising and adding liquidity respectively.

alUSD was the 2nd most stable token on the ethereum blockchain
alUSD was the 2nd most stable token on the ethereum blockchain

Having all that new Dai in the transmuter didn’t hurt our APY.

Our global values changed quite a bit during the crash as users redistributed their portfolios, this acted as a stress test for our contracts. Now everyone knows that a huge market crash won’t bring our systems down. Oh yeah and did we forget to mention, nobody was liquidated!

And on that subject have you ever considered what a safe place Alchemix will be in a bear market? Soon you’ll be able to lock up multiple collateral types without any fear of liquidations whilst freeing up some capital to buy the dip.

If you to pop by to join the discussion in our Discord channel, you’ll find plenty of motivated Alchemist’s to link up with.

Alchemix | Docs | Discord | YouTube | Twitter | Forum | Github




Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

Trading Journal for 10/13

Bancor: Token Relay™

DeFi Tokens Take Center Stage as Crypto Universe Leans In

Decentralized Exchanges

How is Bitcoin’s ‘Liquid sidechain’ different from the Lightning network?

Invictus Capital: Weekly Wrap 27.08

SWYFT|Boldly Setting Sail for 2020!

uPort Year in Review + What’s to Come in 2018

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Alchemix Finance

Alchemix Finance

More from Medium

Olympus12: Building a Strong Ecosystem Around a Web3-Native Reserve Currency

Rethinking APY for rebase token protocols

Lower Spreads, Fewer Fees, Same SW DAO — Why Polygon ASAP

Crypto VCs : Introduction