🏺alAssets

alAssets represent users' future yield from deposited yield-bearing collateral, functioning as tokenized loans for the different strategies (e.g., ETH for alETH, various stablecoins for alUSD).

alAssets can be swapped for other assets, paired with other assets to provide liquidity, converted to their underlying assets via the Transmuter, or used in various DeFi protocols such as the ones on Alchemix Stats.

Because alAssets represent future yield, they are typically expected to be valued by the market at a discount from 1:1 with their associated underlying asset. Thus, experienced DeFi users may wish to purchase alAssets directly (instead of taking a loan) to earn yield, speculate on the price of the alAsset, or profit by converting it back to its underlying asset via the Transmuter. This type of user is the counterparty that makes it possible to access self-repaying loans from Alchemix.

Governance mechanisms and systems, such as the Transmuter, Elixir AMO, and liquidity incentives provided by the DAO treasury, work together to influence the price and manage the supply of alAssets.

alAssets are minted when users deposit collateral into the Alchemists and take out loans against those deposits. These assets can be used in market swaps or any type of transaction. alAssets can also be used in the Transmuter which will gradually convert these into the underlying from the harvested yields.

Key Features

Yield Representation

alAssets represent future yield generated by deposited assets in the platform.

Discounted Trading

alAssets typically trade at a discount to the underlying, reflecting their representation of future value.

Governance Oversight

The alAsset supply and price are influenced by the Transmuter, Elixir AMO, and DAO-managed liquidity incentives (find more info about the incentives in Staking Pool Incentives).

Debt Repayment

Enables users to repay debt or convert assets using alAssets.

Collateral Deposit Cap

Ensures a predictable maximum global supply in addition to Alchemist collateral deposit caps.

How it works

1. Deposit Collateral: Users deposit collateral assets into the Alchemix protocol.

2. alAsset Issuance: When users take out loans, they receive alAssets representing their future yield from the deposited assets.

3. Market Accessibility: Users can utilize alAssets for various on-chain transactions, including market swaps and loan repayments.

4. Liquidity Management: Users taking loans will expand the supply of alAssets. Loan repayments, Transmutation, and the Elixir AMO will all shrink the supply of alAssets. The price of the alAsset is representative of these mechanisms, as well as demand for loans, third-party liquidity providers, and Transmuter users.

5. Transmuter Conversion: Users can deposit alAssets into the Transmuter, gradually converting them into their underlying collateral assets over time.

For detailed information, see this guide to learn how to Deposit collateral & how to Take a Self-repaying Loan.