Yield options

Become the master of your own destiny. Use Alchemix to explore yield opportunities within DeFi, and get that yield upfront. Your only debt is time.

Alchemix Finance
3 min readMar 21, 2022


As the number of Alchemix yield options grows, so will the ability to to take advantage of future yield from multiple new sources.

In v1, there are only 2 collateral tokens (DAI and ETH) with their respective singular strategies and respective synthetic tokens (alUSD and alETH). In v2, each collateral token can earn yield via multiple strategies. At launch, this will be limited to Yearn, but the architecture allows for any arbitrary number of strategies. We are currently working on several new integrations and will be proposing them to the Alchemix DAO as they become production ready.

V1 presented users with a single yield source, limiting options for loan-repayment. In v2, Alchemix shall be constantly expanding its range of available yield options, allowing it to be a key lego in the DeFi stack. If a new app comes along that offers competitive yields, we will be in the position to capture it quickly, which will be mutually beneficial for both us and the protocol we integrate.

Furthermore, v2 gives users the ability to granularly determine which yield strategies back their loans, allowing them to make their own custom yield-aggregators on top of Alchemix. More conservative investors may opt for safer, more stable yield options, while more aggressive investors might choose to take on more risk by selecting other, less established options with highly variable rates.

Keep exposure to your valued assets, retaining your long-term outlook whilst releasing their future yield. For anyone looking to take a loan, free from the risk of liquidation on their tokens, Alchemix will be the definitive choice.

Security first

Each yield token strategy in Alchemix v2 has multiple security parameters that will be set by governance.

Maximum Expected Value: If the total collateral value of a yield token reaches its “maximum expected value”, subsequent deposits over that limit will be rejected. This limits the exposure that the collateral backing a synthetic asset can have to a given yield token.

Max Loss: The “Max Loss” parameter sets a basis-point amount of loss that is acceptable in a vault at any given time. Should the percentage lost by a vault exceed its set “Max Loss”, deposits, withdraws of collateral, and liquidations will not be possible until either a) the vault recovers its losses or b) governance accepts the losses and resets the expected value of the vault via the `snap()` functionality.

Repay & Liquidate Caps: The Repayment and Liquidation Caps limit how much of a given collateral can be used to repay or liquidate debt, within a given time frame. If a collateral asset were to suddenly depeg,users could arbitrage that depegged asset by exchanging to alUSD in Alchemix 1:1. These convertible caps place timed limits on how much can be repaid or liquidated with the collateral asset. If a depegging event did happen for one of our collateral types, the cap would mitigate the immediate damage, buying enough time for the peg to recover or to pause the strategy. This is ultimately a damage mitigation safeguard, and will protect the integrity of Alchemix should such a Black Swan event happen.

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