Our multi-chain strategy
Alchemix is diversifying across multiple chains as they become feasible. There are many factors that contribute to our expansion plans including the integrity of our product and security of our alAssets. Managing the protocol across multiple chains should be as consistent as possible, especially where audits have the advantage to remain relevant. One way to maximize the security of our product is to deploy to other EVM chains. The Alchemix contract is complex; we believe it’s more efficient to utilize our developer resources to extend our vaults and alAsset portfolio amongst EVM chains than rewrite the core product in different languages.
Since Alchemix is reliant on other secure DeFi building blocks it’s imperative that the target side-chain or layer 2 has the necessary DeFi ecosystem.
The size of the Fantom ecosystem is sufficiently large to support Alchemix. According to Defillama.com, Fantom DeFi has a combined 6.66b TVL, placing it among the leaders in the multi chain space. That total addressable market is substantial and can become a new source of growth for Alchemix. Combined with the diversity and depth of DeFi on Fantom, it creates a fertile ground for integrations with various protocols across its DeFi ecosystem.
We are also fortunate to have forged some quality collaborations with BeethovenX, Spookyswap, and Spiritswap who will all be assisting in providing incentives, lessening our own costs to host liquidity. The exact budget for eight weeks of collaborative incentives is 5056 gALCX (approx 5250 ALCX), with the 60% going to the alUSD/USDC boosted pool on Beethoven X, 25% going to Spookyswap gALCX/FTM pool, and the remainder going to Spiritswap gALCX/FRM pool. This represents approximately 4% of our weekly emissions to bootstrap Alchemix in the Fantom ecosystem.
What will it look like?
Many of the parameters will mirror the mainnet deployment. The LTV for borrowing alUSD on Fantom will be the same as it is on mainnet, 50%, meaning a $1000 deposit allows for a $500 alUSD loan. The convertible cap will be set to $5m over a 1 hour period, which provides a good balance of UX and protection. In addition, MaximumLoss parameter will mirror mainnet at 0.05%.
Initially we’ll be launching on 3 DEXs:
- alUSD/USDC boosted yield pool. This pool puts the USDC to work in Yearn to provide extra yield to LPs!
Emissions and incentives
Due to cross chain arbitrage, there’s no need to have more than one or two robust marketplaces outside of the Ethereum mainnet. Considering Fantom’s low fees and super fast transactions, and the fact it is the first side-chain we will deploy on, it makes sense to build one of our primary multi chain markets there.
Initially, we will look towards liquidity mining incentives to bootstrap the markets on Fantom, and we will use gALCX instead of ALCX as the multi chain representative for our token. The main reason is that it offers the users a much better experience holding ALCX on other chains. Because it auto-compounds the staking rewards, it is always accruing more ALCX, making it a much more attractive token to hold. When the gALCX is paired in a LP position, it is getting ALCX rewards and trading fees — in addition to any other farming incentives on top.
How do assets work across chain?
Bridging from Ethereum to Fantom works the same way for gALCX and alUSD.
When for example a alUSD is bridged to Fantom, the alUSD on mainnet is stored as bridge liquidity, then bridge-specific alUSD is minted on Fantom. Approved bridges can burn the bridge specific alUSD to mint the canonical alUSD (ie, the alUSD that the protocol accepts), so that all users are operating with the same alUSD. This two step process will be abstracted away from the user in the UI. Note that to bridge alUSD back to Ethereum mainnet, liquidity to bridge back is required. When other chains are live, users will be able to mint/burn between other chains without liquidity required. gALCX uses the same mechanisms as alUSD. This system allows for unrestrained bridging of alUSD and gALCX throughout the Alchemix multi chain ecosystem while ensuring any gALCX and alUSD existing on Ethereum mainnet originated from it.
How is governance affected?
Governance will not be affected, it will remain on the Ethereum mainnet. Note that there will not be any extension of governance into side chains or layer 2’s as we rollout our multi chain strategy. Multi chain governance is a feature we may implement in the future.
What chain is next?
We have a number of candidates for our next deployment including Arbitrum, Optimism and Polygon. Keep tuned in to our discord and weekly fireside chats for updates.
How to get started:
How to bridge stablecoin collateral and FTM tokens (for gas fees) between Fantom and Ethereum:
You can send assets directly to your Fantom wallet address directly from a centralised exchange like Binance or you can use a cross-chain bridge to perform the bridging transaction manually on-chain.
To send tokens from a centralised exchange withdraw your token ensuring you specify the correct wallet address and blockchain, in this case Fantom.
To perform the bridge manually visit your favourite cross chain bridge. You could use https://zapper.fi/bridge, https://app.multichain.org/#/router https://synapseprotocol.com/ or any other bridge you trust.
Above shows the multichain bridge interface.
Here you need to ensure you’re on the bridge page. In the ‘From’ field input the amount of stable coin and the token from the dropdown list. In the ‘To’ field ensure you select ‘Fantom mainnet’ from the dropdown, the numeric field will display how many Fantom stable coin tokens you’ll receive when the funds arrive on Fantom.
Next you’ll need to approve the stablecoin of your choice, then press the swap button to send the funds to the bridge.
The bridge transaction should take between 10–30 mins to complete. After that the funds will appear in your Fantom wallet.
Now that you have your stables on Fantom you can deposit, earn and take self-repaying loans on the Fantom chain.
Adding the fantom network to your wallet (in this case MetaMask):
The Alchemix website will automatically add the connection to the Fantom blockchain when you select Fantom from the dropdown in the wallet widget.
Once you’ve selected Fantom Opera MetaMask will ask you for permission to add the network.
Once you approve the new network you’ll be able to switch between Fantom and any other networks you have added.
How to bridge alUSD and gALCX between Fantom and Ethereum using the built-in tool on the Alchemix site
Go to the swap page on the Alchemix website https://.alchemix.fi/swap
Select your target network which should be ‘Fantom’. Input the amount of gALCX or alUSD you’d like to send to Fantom and press ‘Bridge Token’.
If it’s the first time you’ve used the bridge, approve the token.
After the approval, click the bridge button and execute the transaction.
Bridging takes several minutes to process after your transaction clears. The UI will inform you when the bridging process is complete.
Lastly, change your network over to Fantom with the “Change” button, and swap the bridged token to the canonical version on Fantom.
Note that to bridge alUSD back to Ethereum mainnet, liquidity to bridge back is required.
At long last, super cheap transactions on Fantom make Alchemix accessible to everyone — regardless of their position size.
Our multi chain expansion is a hot topic within the community, if you have views that you’d like to share, then join the discord where you’ll be welcomed by our engaged community who will be happy to discuss. If you wish to open an AIP (Alchemix improvement proposal) or vote, find out more about ALCX governance in discord.
Join the Discord to become part of our community of amazing supporters and users.