Alchemix proudly announces its launch on the Arbitrum network, marking a significant milestone in the platform's ongoing multi-channel rollout. This initiative opens up new prospects for Alchemix users who are keen to explore the advantages offered by Arbitrum.
Alchemix works on the basis of a simple but innovative concept. Users deposit digital assets as collateral, from which they can borrow money with no fixed repayment term. Alchemix's innovative mechanism uses these deposits to generate returns via other DeFi protocols. These returns are then automatically applied to the repayment of the loan, potentially freeing the borrower from any direct repayment obligation.
This self-repaying loan method is a game-changer for crypto-currency investors, as it allows them to retain ownership and growth potential of their assets while accessing the liquidity they need. In addition, the absence of a maturity date for repayment eliminates the risk of liquidation in the event of market volatility, provided the collateral ratio remains within acceptable limits.
Alchemix is thus part of a disruptive dynamic within DeFi, offering not only a new avenue for lending and borrowing, but also strengthening inter-connectivity within this ecosystem. Users can leverage borrowed funds or even the returns on their deposits to engage with other DeFi protocols, thereby maximising their investment opportunities.
The decision to migrate to Arbitrum was based on Alchemix's need to rely on secure DeFi building blocks. The Arbitrum ecosystem, with its combined TVL of around $2.65 billion, ranks fourth in the multi-channel league table and meets the size, reach and security requirements to meet Alchemix's multi-channel objectives.
The parameters of the Alchemix deployment on Arbitrum mirror those of the Mainnet, including an LTV for alUSD loans identical to that of the Mainnet: 50%. This means, for example, that a deposit of 1,000 aUSDC can be used to obtain a loan of 500 alUSD.
With user security in mind, Alchemix introduced limited deposit limits for its launch on Arbitrum: $100,000 for USDC and 200 ETH for stETH. In the absence of any significant setbacks, the DAO multisig plans to increase these ceilings for all forms of collateral.
On the DEX Arbitrum RAMSES, users can provide liquidity to the alETH and alUSD pools. The Alchemix DAO, as a shareholder of RAMSES, owns one of their veNFTs, allowing it to vote and provide RAM token rewards for its liquidity providers. Alchemix will also incentivise these pools with at least $1,000 per week in ALCX.
Once acquired, users can provide liquidity to the respective pool on Arbitrum. RAMSES requires users to add liquidity in proportion to the current pool balance, making unilateral deposits currently impossible.
If users only have alUSD or USDC (or alETH or WETH) and wish to participate in these pools, they will have to sell enough assets to feed the pool with liquidity.
RAMSES offers a market-leading concentrated liquidity programme.
In this example, when alUSD is transferred to Arbitrum, alUSD on the Mainnet is stored as bridge liquidity - then bridge-specific alUSD is mined on Arbitrum.
Approved bridges can burn the bridge-specific alUSD to mine the canonical alUSD (i.e. the alUSD that the protocol accepts), so that all users operate with the same alUSD.
This two-step process is not taken into account by the user in the user interface.
Bridge liquidity is essential to allow alUSD to be returned to the Ethereum core network.
However, users will be able to create or destroy currency on any chain without any liquidity requirements.
No, governance is not affected by this new offer; it remains entirely on the Ethereum Mainnet. Multi-chain governance is a feature that Alchemix may implement in the future, but not during this campaign.
Add the Arbitrum network to your wallet (in this case MetaMask):
The Alchemix website will automatically add the connection to the Arbitrum blockchain when you select it from the drop-down menu in the wallet widget.
Once the Arbitrum network is selected, MetaMask will ask for permission to add the network. Once the new network has been approved, it will be possible to switch between Arbitrum and all the other networks added.
This transition to Arbitrum symbolises a giant step forward for Alchemix and offers new prospects for innovation, security and transaction efficiency in the cryptocurrency ecosystem.
