Introducing Alchemix v3
The next era of Alchemy has arrived.
90% LTV vaults, Fixed-Yield Opportunities, Mix-Yield Token, and a New Era of Capital Efficiency. Caps are raised, and Transmuters are open.
The Evolution of Self-Repaying Loans
When Alchemix first introduced the vision of self-repaying loans in 2021, it changed the face of DeFi. The concept was a success, but the mission was always much larger. A mission to build the most efficient, secure, and flexible yield engine possible.
In v3, that mission takes its next big step.
Alchemix v3 moves the protocol away from single-strategy vaults into a unified yield-management layer. By rebuilding our core architecture around the new Mix-Yield Token and the Transmuter, we have unlocked capital efficiency that was impossible in v2.
Welcome to the new Alchemix.
V3 at a Glance
Alchemix v3 is a complete re-architecture focused on capital efficiency, peg stability, and user flexibility.
- 90% LTV — Borrow up to 90% Loan-to-Value (LTV), nearly doubling the capital efficiency of Alchemix v2.
- Mix-Yield Token — All vault deposits are denominated in the new Mix-Yield Token (MYT), which earns yield from a diversified, risk-isolated portfolio of strategies.
- Fixed Yield & alAsset Pegs — The new Fixed-Duration Transmuter creates a predictable arbitrage cycle that supports alAsset pegs and provides fixed-yield opportunities.
Meet the Mix-Yield Token
At the heart of v3 is the new Mix-Yield Token (also known as MYT).
The MYT is a tokenized basket of yield strategies built on Morpho V2. Instead of relying on a single point of failure or yield source, your deposit is allocated across a portfolio of risk-managed strategies curated by the Alchemix DAO.
This makes the protocol far more resilient than relying on any single yield source. If one underlying strategy underperforms or encounters an issue, the MYT absorbs the impact across the wider basket. It also allows the DAO to rebalance strategies and maintain a reliable, consistent yield without requiring any manual migration of your funds. Community builders can also develop and propose custom strategies through our grants program, keeping the basket evolving alongside the broader DeFi ecosystem.
The specific composition of the MYT will also vary across different chains, giving users access to distinct strategy mixes suited to different risk profiles. If you prefer straightforward passive returns without borrowing, you can simply deposit into the MYT directly and let it earn yield on your behalf.
The move to the MYT represents a significant simplification of the user experience and sets the foundation for a more adaptable, scalable, and ultimately robust future for self-repaying loans.
Launch MYT compositions include:
- Mainnet USDC — Yearn yvUSD (Conservative), EulerUSD (Moderate), TokeAutoUSD (Conservative)
- Mainnet wETH — EulerwETH (Moderate), TokeAutoETH (Conservative), WstETH (Moderate)
- Arbitrum USDC — AaveUSDC (Conservative), EulerUSDC (Moderate), FluidUSDC (Moderate)
- Arbitrum wETH — AaveETH (Conservative), EulerETH (Moderate)
- Optimism USDC — AaveUSDC (Conservative)
- Optimism wETH — AaveETH (Conservative), WstETH (Moderate)
Each MYT aims to blend a Conservative risk anchor strategy with Moderate risk yield boosters (where applicable), governed by global risk caps.
How a Fixed-Duration Transmuter Changes Everything
One of the largest constraints in previous versions of Alchemix was the stability of alAsset pegs. We solved this in v3 by completely rethinking the Transmuter.
The new Transmuter acts as a bond market, allowing anyone to deposit alAssets (alUSD or alETH) and lock them for a fixed duration. At maturity, the protocol guarantees a 1:1 redemption for the underlying collateral.
This creates a far more stable peg. If alUSD trades below $1.00, arbitrageurs have a guaranteed, low-risk yield opportunity, which in turn helps balance the market discount back toward $1.00. For example, if alUSD drops to $0.98 and there is a three-month redemption period, buying and locking it in the Transmuter yields roughly 8% annualized on a fixed basis. This aligns incentives between the market and the protocol’s health. These traders get a safer path to arbitrage, and Alchemix maintains a healthier peg for its synthetic alAssets.
This mechanism also makes providing liquidity for alAssets more attractive. If the alAsset peg starts to drift, LPs can let arbitrageurs restore it, or they can withdraw their alAssets and redeem them 1:1 through the Transmuter, effectively erasing any impermanent loss.
This guaranteed Transmutation path, combined with the new redemption system, provides the foundation for v3’s leap to 90% LTV.
How Redemptions & Repayments Work
In Alchemix v3, the value of your position is affected by two parallel systems.
Collateral Appreciation
The first system is the yield generated by your collateral. As your MYT accrues yield, it increases in value, steadily reducing your debt-to-collateral ratio. Your entire collateral continues to appreciate regardless of your outstanding debt.
The Redemption Cycle
The second system is the redemption cycle. When the Transmuter needs to settle claims for fixed-duration transmutations, the protocol “earmarks” a percentage of all borrower debt positions to cover them. Earmarking is time-weighted, meaning users who have held debt for the full redemption period receive proportionally more earmarking than those who joined midway through. Without it, a user could repay their debt right before a redemption and re-borrow immediately after, pushing the cost onto everyone else.
This is another distinct benefit of v3 over other protocols. We call it “Temporal Leverage”.
When your collateral is earmarked for repayment, it doesn’t leave your position immediately. It sits in a pending state until its corresponding Transmuter position is claimed. During this period, you continue to earn yield on the full balance of your collateral until the moment of settlement.
Users can always repay their regular debt using alAssets, but earmarked debt specifically requires MYT. If you repay earmarked debt early, the MYT you use goes into a buffer that prioritizes future redemptions, extending the temporal leverage for all participants.
As Transmuter redemption positions mature, it triggers debt repayments using user collateral. Since these assets are like-kind, this acts as a zero-cost deleveraging event rather than a loss of value. This process clears higher-LTV positions faster than lower-LTV positions because redemptions are scaled by a percentage of your debt.
Unleashing 90% LTV
Because the Transmuter and Redemption Engine provide a reliable mechanism for clearing debt and stabilizing alAsset pegs, we can safely support significantly higher leverage in our vaults. There are still no interest rates on your loan; instead, Alchemix charges a performance fee on the yield generated by the MYT and a redemption fee when debt is repaid through the Transmuter.
Alchemix v3 allows borrowing up to 90% Loan-to-Value (LTV).
This level of capital efficiency completely changes the protocol’s utility. It allows you to access nearly all of your liquidity while simultaneously keeping your principal working for you. A strong yield profile combined with a healthy redemption rate provides flexibility, allowing you to choose between a more traditional lower-LTV v2 style Self-Repaying Loan and to maximize capital efficiency by leveraging up to 90% LTV.
Engineered for Safety
Security is the highest priority for Alchemix v3. We combine traditional smart contract audits with infrastructure-level safeguards designed to protect the protocol from external risk avenues.
Rigorous Audits
At the level of our codebase, we’ve completed comprehensive audits with yAudit, Spearbit / Cantina, Immunefi, Nethermind, alongside a solo review from Alpeh_V and ongoing testing with our in-house security suite.
These independent reviews ensure the maximum possible integrity of our contracts before they are deployed. In addition, a long-term partnership with Nethermind means that every yield strategy considered for inclusion in the MYT must undergo a dedicated audit before being whitelisted.
Oracle Pricing
Alchemix v3 uses Chronicle’s Market Rate-based oracles to price collateral.
The validator network aggregates data from multiple sources and takes the median to determine the final value. Reference pools are monitored for liquidity and stability across mainnet, Arbitrum, and Optimism, and the liquidity profile can be observed via the Chronicle Dashboard.
Chronicle’s validator network is run by leading blockchain protocols, including Sky, Infura, Gitcoin, Etherscan, Gnosis, and more.
Risk Containment
To protect the protocol from a single point of failure, the DAO enforces strict diversification limits within the Mix-Yield Token.
These strategies are capped individually based on their specific risk profiles:
- Aggressive strategies: Up to 10% of the total portfolio.
- Moderate strategies: Up to 25% of the total portfolio. 40% combined.
- Conservative: No cap.
These caps create a mathematical safety net, preventing any single aggressive yield source from jeopardizing the health of the entire protocol.
Cross-Chain Infrastructure
Bridging is also a common point of failure in DeFi, so we’ve reinforced Alchemix v3’s cross-chain activity with a custom implementation of the LayerZero OFT standard, paired with a “2-of-3” Decentralized Verifier Network (DVN) system, which ensures no single bridge can create a failure point or exploit vector.
This requires consensus from multiple independent verifiers before any message is passed. We’ve also introduced daily rate limits on every asset and chain, ensuring that any additional bridge risks are contained and do not drain the protocol.
These audits and structural constraints ensure that Alchemix v3 remains secure at both the contract and infrastructure level.
The New Standard
Alchemix v3 elevates the beloved Self-Repaying Loan into a fully scalable, foundational component of decentralized finance (DeFi).
If you need liquidity, borrow up to 90% LTV and watch Alchemix work your debt down over time. If you want passive, diversified yield without borrowing, deposit into the MYT and let your yield accrue. If you want fixed returns, buy alAssets below peg and redeem them 1:1 through the Transmuter. The system is designed to be fair to everyone, delivering capital efficiency without compromising safety.
This is the new standard for decentralized yield, and we invite you to join us in this next chapter.
Welcome to Alchemix v3.
Get started
- Use Alchemix v3 — alchemix.fi
- Visit our docs — docs.alchemix.fi
- Stay up to date on X — x.com/AlchemixFi
- Join the conversation on Discord — discord.gg/alchemix
