Olympus Pro Spotlight: Alchemix

3 min readNov 13, 2021

Olympus Pro Spotlight is a series where we highlight our Olympus Pro cohort partners to give OHMies insights into what our partners are building, how their token works, and why they chose Olympus Pro.

What is Alchemix?

Since their launch in Feb. ’21, Alchemix has grown to a TVL of $852m while their governance token, ALCX, has climbed to a market cap of $364m at time of writing.

According to their docs, Alchemix is a future-yield-backed synthetic asset platform and community DAO. Put differently, Alchemix (v1) allows users to deposit DAI and ETH as collateral in order to borrow their synthetic stablecoin called alUSD or another synthetic asset called alETH. This collateral is deposited to yield generating Yearn Vaults where the yield is used to “pay back” the loan as it’s generated. In other words, any synthetic asset borrowed from Alchemix is backed by the future yield of its underlying collateral.

Using Alchemix is straightforward: Users can deposit DAI or ETH and borrow alUSD or alETH worth up to 50% of their collateral’s value (e.g. 100 DAI lets you borrow 50 alUSD). That collateral is then sent to its associated Yearn Vault to generate yield. When the yield is harvested it’s used to pay down the global debt in the system — reducing the debt of all depositors. Yes, all users’ loans are self repaying! As debt is paid down users can continue borrowing more up to the 200% minimum collateral ratio.

Here’s a visual from their website showing Alchemix’s mechanisms in action:

What is ALCX?

We’ve touched on the synthetic assets available to Alchemix users, but the token Olympus Pro users will be interacting with is ALCX. ALCX gives its holders governance rights over the direction of the protocol and its treasury. ALCX can also be staked to earn additional ALCX rewards through a simple staking mechanism or through the ALCX/ETH Sushiswap farm — both can be found here.

Alchemix and Olympus Pro

Alchemix Founder, Scoopy Trooples, proposed the ALCX Bond Program to the Alchemix community in September to become a member of the first Olympus Pro cohort. At the time, Alchemix was spending 16,000 ALCX weekly — roughly $5.5m / week at the time — on all of their liquidity mining programs. The problem? The Alchemix DAO didn’t own any of that liquidity and were recognizing that such a cost would become a bottleneck in the future.

To solve this issue, the proposal allocated 1,600 ALCX per week for purchase via bonds. This new direction would allow AlchemixDAO to acquire ALCX/ETH SLP instead of renting it, ushering in a new era for the DAO. Since launching ALCX bonds, the Alchemix DAO has acquired >$3.8m (1.5% total) of ALCX’s liquidity, which is now an income producing asset on their balance sheet and has recently expanded their use of Olympus Pro to acquire more DAI and wETH. You can find their original governance proposal here.

As highlighted above, Alchemix allows ALCX bonds to be purchased using ALCX-ETH SLP, DAI, and wETH. Users can get started using the Olympus Pro marketplace.

Continue Learning

We’re excited to have a partner like Alchemix on board and encourage OHMies to get involved in their community if it interests you. Here’s some resources to get you started:

About Olympus Pro

Olympus Pro is a service for protocols looking to utilize bonds in their emissions programs with low overhead and maximum impact. We provide our partners with infrastructure, expertise, and exposure. Projects only need to bring a token and an objective. To learn more, read our in depth guide: A Beginner’s Guide to Navigating Olympus Pro.