Alchemix arrives on Arbitrum!
Alchemix is proud to bring you to Arbitrum!
As part of our continued multi-chain rollout, we have officially launched on the Arbitrum network.
Why Arbitrum?
Since Alchemix is reliant on other secure DeFi building blocks, it is imperative that the target side-chain or layer 2 has a sufficiently robust DeFi ecosystem.
Many of the Alchemix team and voting community members believe that the breadth of the Arbitrum ecosystem has demonstrated itself to be of sufficient size, scope, and security to support Alchemix’s multi-chain goals. According to DeFiLama.com, Arbitrum has a combined TVL of ~$2.65b, putting it in 4th place on the multi-chain leaderboard.
Many of the parameters of the Arbitrum deployment mirror the Mainnet deployment. The LTV for borrowing alUSD on Arbitrum is the same as it is on Mainnet: 50%. This means, for example, a $1000 aUSDC deposit allows for a $500 alUSD loan.
Deposit Caps
With the safety of our users always in mind, we have set limited deposit caps for our Arbitrum launch: $100k for USDC and 200 ETH for stETH. Barring any significant setbacks, the DAO multisig will then increase caps on all collateral.
We also plan to add jUSDC very shortly after launch, pending the implementation of JonesDAO’s ongoing jUSDC contract upgrades.
Emissions and incentives
On the Arbitrum DEX RAMSES, users can provide liquidity to the alETH and alUSD pools. The Alchemix DAO is a stakeholder in RAMSES, possessing one of their veNFTs. This enables us to vote and provide RAM token rewards for our liquidity providers. Alchemix will also initially be incentivizing these pools with at least $1k per week in ALCX.
Once users have acquired alETH or alUSD, they can provide liquidity in its respective pool on Arbitrum. As you can see in the image above, RAMSES requires users to add liquidity in proportion to the current pool balance, so single-side deposits are not currently possible.
If users only have alUSD or USDC (or alETH or WETH) and want to LP in these pools, then users will have to sell enough of one of the assets to supply the pool with liquidity.
RAMSES offers a market leading concentrated liquidity program. For more information on this, check the deep dive here.
How do alAssets work cross-chain?
In this example, when alUSD is bridged to Arbitrum, the alUSD on Mainnet is stored as bridge liquidity — then bridge-specific alUSD is minted on Arbitrum.
Approved bridges can burn the bridge specific alUSD to mint the canonical alUSD (i.e., the alUSD that the protocol accepts), so that all users are operating with the same alUSD.
This two-step process is abstracted away from the user in the UI.
Please note that bridge liquidity is essential in order to bridge alUSD back to Ethereum Mainnet.
However, users will be able to mint/burn between other chains without any liquidity requirements.
For more information about bridging assets, see our guide here.
Is governance affected?
No, governance is not affected by this new offering; it remains entirely on the Ethereum Mainnet. Multi-chain governance is a feature we may implement in the future, but not during this current campaign.
Adding the Arbitrum network to your wallet (in this case MetaMask):
The Alchemix website will automatically add the connection to the Arbitrum blockchain when you select it from the dropdown in the wallet widget.
Once you’ve selected Arbitrum, MetaMask will ask you for permission to add the network. After you have approved the new network, you will be able to switch between Arbitrum and any other networks you may have added.
You can also add networks for other wallets, using Chainlist for example.
Further reading
Alchemix | Docs | Discord | YouTube | Twitter | Forum | Github
