A decentralized finance (DeFi) protocol built on Ethereum is getting a boost from the world’s largest crypto exchange by trading volume.
In a new announcement, Binance reveals it is introducing Alchemix (ALCX) for trading on the popular platform.
“Fellow Binancians,
Binance will list Alchemix (ALCX) and will open trading for ALCX/BTC, ALCX/BUSD, and ALCX/USDT trading pairs at 2021-11-30 06:00 (UTC).”
ALCX token is the native governance and staking token of the Alchemix protocol. Alchemix is an automated yield farming, lending, borrowing, and staking protocol that uses tokenized yield funds to repay debts. Users can open collateral-backed loans that are paid off automatically using the yield generated by the collateral.
The Alchemix protocol runs on the Ethereum blockchain and currently utilizes SushiSwap (SUSHI), Curve Finance (CRV), and Yearn.Finance (YFI). ALCX can be staked and earned in liquidity pools. ALCX also gives holders a vote in Alchemix decentralized autonomous organization (DAO) governance.
Alchemix Finance shared news of the Binance listing on Twitter with its 52,000 followers.
👀🧙♂️ https://t.co/ih5aSyI5va
— Alchemix (@AlchemixFi) November 30, 2021
The Binance announcement sent ALCX soaring to a 24-hour high of $444.08 after starting the day near $376, an approximately 18% increase. ALCX has since corrected and is currently trading at $387.66, a 3.27% increase over the last day.
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Alchemix has fallen over 15% after Coinbase announced support for the similarly-named asset Alchemy Pay.
Alchemix Drops on Failed Insider Trading
It seems someone got confused between Alchemix and Alchemy Pay.
Yield tokenization protocol Alchemix dropped over 15% on Monday following the fallout from a case of suspected insider trading.
At 12 pm EST, Coinbase announced through a blog post that it would be listing the crypto payment gateway Alchemy Pay (ACH) on Coinbase Pro. Minutes after the announcement went live, the similarly-named Alchemix (ALCX) crashed 13.3%, with much of the drop caused byone large traderexiting their position via SushiSwap.
Source: CoinGecko
While the sudden fall in price for Alchemix could have been coincidental, the likely explanation is that someone with insider knowledge tried to buy in ahead of Coinbase’s announcement. However, the insider appears to have confused Alchemix for Alchemy Pay. When Coinbase announced the different but similarly-named asset, the trader quickly exited their position. Following the announcement that Alchemy Pay would be listed on Coinbase Pro, the ACH token soared over 90%.
Onlookerson Twitter were quick to point out that the attempt at insider trading likely came from Coinbase. Assuming Coinbase and Alchemy Pay were the only organizations to know of the listing ahead of time, it would be very unlikely for someone from Alchemy Pay to buy the wrong token.
Seems like Coinbase’s insider protections need some work.
Alchemix drops on Alchemy Pay being listed.
Seems like someone bought up the wrong token. Obviously the project didn’t leak it as you can’t get the project wrong from that side… https://t.co/gLFeWCoC8G
— Adam Cochran (@adamscochran) August 2, 2021
Over the past several weeks, Coinbase has frequently announced listings for various crypto assets on Coinbase Pro. The move to ramp up listings follows a tweet from Coinbase CEO Brian Armstrong in June, where hestatedthe company’s goal is to list every crypto asset where it is legal to do so. Many of the assets listed by Coinbase see significant increases in value, with yield aggregator Harvest Finance soaring 127% after Coinbaseannouncedits listing last week.
Disclaimer: At the time of writing this feature, the author owned BTC and ETH.
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The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
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After close to a month of consulting with industry experts and journalists within Cointelegraph and without, we’re proud to unveil a new segment for Finance Redefined, a.k.a. the premier DeFi industry newsletter: on-chain analysis.
Reporters will often look to public records to bolster stories, and the blockchain is no different. Everything from analyzing the wallet of the fake Banksy NFT artist to following-up with exploiter wallets in the wake of hacks, the data is often used but arguably not to the extent that it could be.
For instance, there is a wallet widely-known to be that of Mark Cuban, serial entrepreneur and owner of the Dallas Mavericks. He’s doxxed himself indirectly and directly many times — the address is the owner of markcuban.eth, for christsakes. And yet, when he announces that he’s invested in Polygon (or an algo stable shitcoin, RIP Titan) it’s news, but when he makes the moves on the wallet in real time…. the crypto-news industry ignores it?
Reporting on wallet transactions is fraught with complications, however. As Sam Trabucco of Alameda Research told me in Miami, “doxxed” Alameda wallets know that they’re doxxed (“contaminated” is the term they use internally), and trying to interpret a buy from one ‘known’ wallet may only be glimpsing a small part of a much larger picture — Alameda may be hedging with another acct, and as such public buys/sells are ultimately not indications of a wider opinion on an asset.
Check out this thread on folks trying to uncover what Alameda is doing with CRV as an example — the tail-chasing and narrative flip-flopping is extreme:
Alpha Leak!
You guys have been wondering why Sam dumps his $CVX everyday?? But rn, he’s buying back!!https://t.co/e7kKO1e2QG
1/Probably he’s controlling the price to accumulate more and more! This could be a good sign, @ConvexFinance => FTX soon?
— Ade- $CRV maximalist (@MrFro92) June 15, 2021
Additionally, despite ample evidence, if Mark Cuban ever came out and said that a wallet is not his — doesn’t matter if he has the ENS, doesn’t matter if he’s even claimed it as his in the past — we, as an outlet, have no way to definitively prove to the contrary, and as such explicitly linking an individual or institution to a wallet is unacceptable regardless of any amount of circumstantial evidence.
So, we’ve tiptoed and wondered and thought and thought about it some more. On-chain data is both public and wildly underused by news outlets, but it’s a new source type from a journalism perspective and really uncharted ethical ground.
Some of the language decisions we’ve made might seem a little obtuse, but they’re measured and we think appropriate. Let us know what you think.
We hope you like our first installment, courtesy of Bill Zerox aka @0xbilll:
Alchemix rugpull remuneration analysis
After a rug pull, desperate community members typically beg developers to return the stolen funds and social media channels become chaotic — filled with stories of tragic loss and impoverished nurses. It only makes sense then that in the first “reverse rug” in DeFi history, it’s the developers begging the community to return the funds. The big difference is that instead of ignoring requests, as exploiters often do, the community has seemingly responded.
Last week, Alchemix suffered a bug that saw users walk away with 2262 ETH (almost $4.5 million USD, even with the recent price decline) in what is being called the first-ever “reverse rug”. Instead of using treasury funds or minting a new token, steps that other protocols have taken to recoup a loss after a bug or hack, the Alchemix team is asking users who benefited to return the ETH.
In exchange, Alchemix is promising users 1 ALCX per 1 ETH returned. If users who benefited from the bug return the full amount of ETH that they were able to withdraw, the team says the generous exploiters will also receive a “special” NFT that includes “yet-to-be-determined functionality in the Alchemix DAO.”
If you benefited from the reverse-rug, then please consider becoming an Alchemix legend and returning the free money.
Every bit counts, and all contributors will be remembered https://t.co/GqkkIBG9Ma
— scoopy trooples (@scupytrooples) June 21, 2021
Although unconventional — as the best things in DeFi are — on the surface their ask to the community has been a success. Taking a look under the hood, however, reveals that the majority of funds were donated from one altruistic Alchemist developer while the accounts that walked away with the most ETH show no signs that they will return the funds.
On-chain data shows that the majority of ‘returned’ funds have come in the form of community members donating ETH, as opposed to users returning the ETH that the bug allowed them to claim.
1129.85 ETH has been returned as of this afternoon. Breaking it down, 358.21 ETH (~32%) is from users who benefited from the bug, while 771.64 ETH (~68%) has been donated by community members.
Data taken from Dune Dashboad thanks to 0xGranger at ~2:45 EST June 23rd; https://duneanalytics.com/queries/66340/132563
The largest donation so far is a staggering 730 ETH from an apparent Alchemist developer with the ENS handle n4n0.eth. They did not receive ETH from the exploit, so they are presumably reaching into their own pockets — a testament to their belief in Alchemix and their desire to make the protocol whole.
When called out in the Alchemix discord, n4n0 simply said, “I’m in it for the tech.”
Screenshot taken from official Alchemix Discord channel
A Twitter profile with the same name lists their role as “codemonkey @ http://alchemix.fi.”
Outside of n4n0.eth’s 730 ETH donation, 196 other addresses have donated a total of 41.64 ETH. While some of the addresses may be speculating that those who donate will be eligible for future airdrops, the response also shows that the community wants Alchemix to succeed.
Looking at addresses who received excess ETH from the exploit, the top 20 addresses walked away with almost 1800 ETH, ranging from 25 to 500 ETH. Of those, so far only four addresses have returned the full amount they got off with for a total of 174 ETH.
One of these addresses, themockingjay.eth, returned the 40 ETH that they were able to withdraw because of the bug. Their address shows that they are active DeFi users and early Alchemist supporters, as demonstrated by them apeing into pool 2 a couple days after the protocol launched.
Zerion currently shows themockingjay.eth’s net worth at over $2 million, demonstrating that they are characteristic of DeFi users who are in a position to support a protocol, as opposed to carry off with the funds.
With the promise of an NFT and the chance to live in Alchemix/DeFi/Crypto history forever, perhaps the response here should not come as a surprise.
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Aave 2.5, and airdrops to come
Like many DeFi protocols, Aave isn’t having ‘growing pains’ so much as the project is sprouting wings.
A former perennial top-10 on rankings websites, they’re now the definitive #1 in DeFi with nearly $17 billion in TVL on the back of a highly successful liquidity mining program. However, in an interview with Cointelegraph Aave co-founder Stani Kulechov weighed in on the same problem dozens of protocols now face: how to continue the explosive growth in an increasingly complicated system?
“Now the question is, how do we keep growing at the same pace, and also expand the growth as new projects are coming in, as new ideas and innovation comes into the whole ecosystem?” He asked.
The first step for Aave is applying what works to new environments. The team is working on a governance bridge that can let users vote on layer-1 for decisions that will apply to the various layer-2 implementations of the market, allowing for “cross-chain decentralized decision making,” says Kulechov. This new feature will be available in a matter of weeks.
However, larger changes are coming as well:
“We believe the future is multi-asset and multi-governance. […] This means we’ll have more inclusive decision making in the community.”
Multi-asset governance —- say, AAVE and BAL holders voting on a AAVE-specific proposal — will of course be an entirely new experiment, and comes with specific considerations for the community.
In Stani’s view, which assets other than AAVE should determine Aave’s fate largely depend on the synergy. Ultimately it will be up to AAVE holders to vote on who gets in, but Stani pointed towards protocols like Balancer — who have a forthcoming deep integration with Aave to deposit unused AMM liquidity into lending pools — as a prime option in a multi-asset governance framework. Likewise, MakerDAO is building a system where the protocol deposits DAI into Aave, and then uses aDAI as collateral in special vaults to assist with liquidity crunches — another deep integration that would possibly warrant inclusion for MKR in multi-asset governance.
This is part of a broader framework for the Aave core team stepping away from the project after the eventual Aave v3 launch. At that point, major users of the Aave protocol (including other protocols that may be using Aave), should be the ones to decide its parameters.
As a result, the day may come when the most significant votes on Aave governance come from addresses controlled by other governance communities.
What if there was a social media protocol built on top of a DeFi Protocol..?
— Aave (@AaveAave) April 17, 2021
But what will the core development team do after the launch of Aave v3? Social media protocols? High fashion on the blockchain? And will it involve potentially lucrative airdrops to current AAVE holders? Kulechov was scant with details (despite his odd Tweets on the topic here and there), but did wax philosophical when it comes to possible airdrops:
“The two key principles are distribution — how do you empower the Aave community when you distribute new assets — and secondly how you can use tokeneconomics to empower your product and your community.”
As an example of empowering a community, Stani pointed to staked Aave, stAAVE, which is used to backstop the protocol as an insurance fund in the case of a shortfall event. Depositing into this fund rewards users with more AAVE and therefore more governance power — ultimately using the token to reward deeper engagement.
The development of the backstop model — also known as Aavenomics, a whitepaper that laid out how the protocol would attract liquidity, and the security to back that liquidity — took six months. Stani said the team settled on a model where “the AAVE token becomes a way to transfer risk to community members, as they’re the ones making risk-based decisions.” This forces the community to be more involved, as they bear risk, but proportionally rewards them.
Kulechov expressed skepticism that new tokens would be needed for new projects from the core team because “you can build value with new protocols directly in the ecosystem you have, and reinforce the current value there.” He also noted that the Synthetix model, which will lead to four new tokens in the coming months, may have downsides: “The risk is that if you come to market with five new tokens, you kind of might dilute the main asset and the community there, and split your community.”
Potential fat airdrops aside, for now the focus is on the forthcoming “Aave v. 2.5,” the penultimate upgrade before v3.
Enter DeFi Decade
— stani.eth =(⬤_⬤)= (@StaniKulechov) June 17, 2021
Aave 2.5 comes with a focus on risk mitigation. The update will include supply and borrow caps on certain assets, and improved liquidation mechanisms — what Stani calls “the final version before the ultimate protocol we wanted to build (v3),” and afterwards the community will take over the protocol and its development entirely. The team at Parafi Capital, who co-authored a liquidity mining proposal for Aave, are some of the chief architects of the overhaul.
Ultimately, while the Aave team continues to iterate and learn from fellow protocols, Stani says the kind of bold experimentation Aave has made (and continues to make) is the best path forward for the space:
“The best way to do things is being experimental. You actually need to fail with tokeneconomics before you can find something that actually works.”
Three of DeFi’s leading projects are in dispute after Curve Finance proposed removing CRV rewards from Alchemix’s pool in the protocol.
The proposal argues that Alchemix already generates yield from Curve Finance via Yearn Finance’s vaults.
Alchemix recently launched its latest alETH product with Saddle, a Curve Finance fork.
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Some of DeFi’s best-known protocols are debating the impact of their yield farming strategies. The discussions center on Alchemix, Yearn Finance, and Curve Finance.
DeFi Projects in Conflict
A group of DeFi’s leading protocols has come to blows as Alchemix, Yearn Finance (Yearn), and Curve Finance (Curve) discuss Alchemix and Yearn’s yield farming strategies built on top of Curve’s liquidity pools.
To get an understanding of why this conflict is taking place, it’s necessary to explain how these DeFi protocols interact with one another. Curve is a decentralized exchange specializing in stablecoin pools and pools between assets of the same value.
Curve incentivizes liquidity provision by distributing CRV tokens on top of the fees made by the liquidity providers. One of Curve’s most substantial liquidity providers is Yearn. As covered in Crypto Briefing’s Project Spotlight feature on the protocol, Yearn allocates the funds it gets from individual users into Curve pools (amongst other strategies) and sells part of the CRV rewards to provide users with better yields than they would normally receive on Curve.
Alchemix is a DeFi protocol built on top of Yearn’s flagship vaults feature. In Alchemix, users lock a certain amount of DAI and can borrow up to 50% of the deposit in alUSD, Alchemix’s stablecoin. The locked DAI is used to collect yield through Yearn’s vaults to reimburse the original loan. Alchemix’s alUSD also has its own Curve pool, which is incentivized with CRV rewards.
On Tuesday, the Curve team opened a proposal to remove CRV rewards from the alUSD pool, arguing that Curve rewards are distributed twice with alUSD. First, users earn CRV through Alchemix’s core mechanism of locking DAI in Yearn’s pools (which themselves farm and sell CRV tokens). Second, users can stake alUSD on Curve to earn additional CRV rewards. When Alchemix sells CRV rewards or uses a protocol like Yearn which automatically sells them, other Curve liquidity providers suffer from the resulting inflation. This creates a “double sell” problem for CRV holders.
The timing of Curve’s proposal is significant. Alchemix recently announced that it would use Saddle, a fork of Curve, rather than Curve itself for its new alETH product. This decision may have acted as a catalyst for Curve’s proposal against Alchemix. When Alchemix announced that Saddle deposits were live, Curve responded that it was “99% sure” Saddle’s code violates a license on Curve’s contracts. Like Uniswap V3, Curve has licensed its code to protect itself against copycat projects.
Btw 99% sure that the way Saddle reimplemented the code (line-by-line translation from one language to another, unless anything changed) violates the license on Curve contracts. Just saying
— Curve Finance (@CurveFinance) June 15, 2021
Yearn developer banteg announced that “Yearn [would] vote against” Curve’s proposal to remove CRV rewards from the Alchemix pool. They reasoned that the alUSD pool provides some of the highest yields and fees for Curve, and therefore removing the incentivization could hurt the protocol in the long run. While Curve’s governance proposal hasn’t yet received any votes, the ongoing debate is heating up.
Disclaimer: The author of this feature held ETH and other cryptocurrencies at the time of writing. Andre Cronje, the founder of Yearn Finance, is an equity holder in Crypto Briefing.
This news was brought to you by ANKR, our preferred DeFi Partner.
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The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.
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With the total value locked in decentralized finance on Ethereum now $89 billion, the market is eagerly waiting to see if the launch of UniSwap v3 could be the catalyst for DeFi’s next big bull run.
Uniswap v3 promises advanced new features and opportunities for yield generation with its launch scheduled for May 5.
Uniswap is emphasizing three new features for liquidity providers — customizable capital deployment across a markets’ entire price curve in the form of concentrated liquidity, tiered market maker fees offering boosted returns for volatile pairs subject to impermanent loss, and cheaper access to oracles for improved data integrity.
The expected reduction in Ethereum’s fees due to the EIP-1559 upgrade come July is also expected to boost v3’s value proposition, and the latest version of Uniswap will also launch on Optimism after the layer-two rollups solution goes live.
With its new concentrated liquidity feature promising users’ unique and customizable yield products, a nascent DeFi sector specializing in tokenizing future yields appears poised to flourish.
1/ Uniswap v3 will improve capital efficiency and liquidity for synthetic tokens built with UMA.
The defining feature of this upgrade is “concentrated liquidity.” It grants individual liquidity providers more control over how they provide liquidity.https://t.co/sysXbun0qg
— UMA (@UMAprotocol) May 3, 2021
Emerging projects like Alchemix have recently enjoyed meteoric growth from the promise of tokenizing future yields, while the likes of Alchemist Coin are using Ampleforth’s V2 Geyser contracts to allow users to create nonfungible tokens representing claims to future Uniswap liquidity provider fees.
Further, new decentralized exchanges are innovating to facilitate trade in tokenized future yields, with Pendle raising $3.5 million from major investors last month to build an automated market maker specializing in time-degrading assets.
Commenting on the completion of Pendle’s public LBP offering earlier this month, Cinneamhain Ventures Partner, Adam Cochrane, described the forthcoming exchange as creating “an entirely new category of market in the DeFi space.”
1/23
One of the newer small caps I’ve been wanting to cover recently is $PENDLE (@pendle_fi).
I think they are one of the only new projects I’ve seen that I think creates an entirely new category of market in the defi space. pic.twitter.com/by1u3PZabT
— Adam Cochran (@adamscochran) May 1, 2021
Uniswap v2 in history
Uniswap v2 launched on Ethereum’s mainnet on March 18, 2020. Back then, the decentralized exchange had roughly $13.7 million locked in total value locked, or TVL, while the broader DeFi sector’s TVL was roughly $550 million.
Despite attracting controversy early on for the popularity of its open listing policy among scammers and impersonators and its relatively high trade fees compared to some centralized platforms, Uniswap’s TVL pushed above $100 million in August as the sector’s TVL surged to $7.5 billion by September.
After facing a series of vampire mining attacks from rival yield farming DEXes in a bid to siphon away the platform’s liquidity, Uniswap airdropped its native governance token to the v2 protocol’s users in September and closed the month with a TVL of more than $2 billion.
While the DeFi markets cooled in Q4 2020 while Bitcoin into new all-time highs above $20,000, the sector’s TVL has rocketed since the start of 2021, while value locked in Uniswap grew from $2.15 billion to $8.53 billion, according to DeFi Llama.
@Uniswap weekly trading volume just passed $10b for the first time!!!
$10b/week is over $0.5 trillion per year pic.twitter.com/ZibcDT9Zob
After taking a bit of a break and skipping a week for the newsletter, I’ve returned with the feeling that something big is brewing for the crypto space.
To people who follow me on Twitter or here, it is probably no secret that I believe the fate of the crypto market is strongly tied to that of the tech sector and stock market as a whole. After showing really strong signs of a pending crash, it seems that markets are well on their way to a recovery. If you look at the S&P 500, it’s actually been making new highs last week. The actual source of the uncertainty was the Nasdaq 100, the tech-heavy index, which is now making a solid recovery as well.
A favorable stock market environment is key to maintaining the crypto bull run. We obviously don’t know how long all this will last, but it seems that the initial panic subsided and likely won’t return for at least a month or two. As always, not financial advice and I may very well be wrong.
The stock market recovery has of course been reflected in the crypto markets as well. Over these past few weeks, I’ve realized just how far crypto has come in popular perception. NFTs have a lot to do with that reputation improvement, although I can’t imagine it being the only demand driver like with 2017 ICOs.
Technology advances are setting us up nicely for an explosive rest of the year. Between Ethereum layer-two, Polkadot’s parachains and Cosmos’s Stargate all coming online now or in the near future, we should have plenty of bandwidth to let developers build exciting new crypto primitives.
We’re still in very, very early stages of DeFi and crypto adoption. All we’ve seen so far is a lot of Ponzi games with maybe a few small nuggets of something real. The Ponzi games have definitely served well to develop the infrastructure and attract a lot of money, but I’m mostly excited about what’s to come. My hope is that we’re not far off from that promise.
New DeFi building blocks keep coming
I wanted to highlight a couple of really interesting new projects in DeFi these past two weeks. The first is WETH10, a new wrapper for Ether. As you may know, all DeFi projects use a tokenized form of Ethereum in the backend. WETH assimilates Ethereum itself, which is not a token, to the ERC-20 standard. This lets smart contracts perform actions on it.
The new WETH10 iteration upgrades ETH with all the bells and whistles of more recent token standards, allowing things like gasless transactions and the transferAndCall function, a way to get rid of the cumbersome and unsafe token approval mechanic.
The most important feature, however, is the Flash Mint. It’s exactly like a flash loan, only it creates new tokens out of thin air instead of drawing them from a liquidity pool. There are practically no limits to how much you can create, making arbitrage strategies even more effective and cheaper. Of course, this also means simplifying hacks and exploits, but here we come back to the age old argument of “flash loans good” vs. “flash loans bad.” I’m firmly of the former stance, since a protocol would’ve still been weak to exploits even without help from flash loans.
Another exciting new primitive is Alchemix, a protocol that lets you draw a loan backed by your future yield. You can basically speed up your yield income and get most of it right away, which could be incredibly useful if you have a large expense coming up.
To be fair, Alchemix’s concept could have already been reproduced with a platform like Cream Finance. It supports yCRV or yETH, interest-bearing tokens by Curve and Yearn.finance, respectively. Just deposit those tokens, draw Dai or another stablecoin, and repay the loan over time from your yield. But Alchemix does expand this concept and, most importantly, automates it. From a niche and little-known trick, this “instant gratification loan” becomes an easily accessible DeFi tool.
New decentralized finance project Alchemix Finance has raised a strategic $3.1 million round from notable crypto investments funds and angels.
The round was led by Spartan Capital, the investment arm of crypto consulting firm The Spartan Group. Delphi Ventures, Nascent, CMS Holdings, Maven 11, Genesis Block Ventures participated in the round as well. Several angel investors joined in as well, including Jason Choi, general partner at The Spartan Group.
Alchemix also raised $4.9 million in an over-the-counter token sale deal led by CMS Holdings and Alameda Research.
The Alchemix project is building a new DeFi primitive, combining yield generation with a lending platform that allows drawing loans based on future income. In the initial iteration, users can deposit Dai to draw alDai for up to 50% of the value of the deposit. AlDai can be converted one-to-one to Dai through the protocol or decentralized exchanges.
In the backend, Alchemix sends the deposited funds to yield generating protocols like Yearn.finance. The yield obtained from the platform is used to automatically repay the alDai loan over time, with the protocol withholding 10% of the yield as revenue for its governance treasury.
Alchemix targets a 200% collateralization ratio, equal to the initial 50% loan-to-value ratio. Upon surpassing that threshold, users can draw more alDai or withdraw a portion of their original Dai.
From a practical perspective, Alchemix allows its users to immediately use a substantial portion of their future yield on their assets. This can have real-world utility as well, for example allowing users to pay for sudden expenses without losing their capital in the long run. Though Alchemix only supports Dai at the moment, its whitepaper states that any crypto asset with established yield generation opportunities can be eventually added.
Alchemix’s team is anonymous and is led by a developer named Scoopy Trooples. Choi tweeted on Tuesday that he “met an anon online last week via memes, arranged an investment round via Telegram, without meeting a single person in the process.” Though he did not explicitly confirm it, it is likely Choi was referring to Trooples. Anonymous developers are a relatively common phenomenon in DeFi.
Choi was particularly excited about the project’s no-liquidation loans and its overall innovativeness, saying:
“Alchemix is building a new DeFi protocol that enables users to tokenize their yield in a no-liquidation manner. We’re excited to see this evolve into a new primitive in DeFi as yield opportunities continue to mature.”
The round was led by CMS Holdings, Alameda Research, and eGirl Capital.
Alchemix has stormed the DeFi space by offering loans that reimburse themselves.
Alchemix builds on Yearn Finance vaults and uses their yield to reimburse the loans.
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Newcomer to the scene, Alchemix has already raised $4.9 million from some of the most reputable VCs in the crypto space.
Alchemix Hits $80 Million in Two Weeks
Alchemix is quickly building a name for itself. The protocol was onlyannouncedon Feb. 22 but has since taken the crypto space by storm.
Alchemix announced Sunday on their Discord a very successful round of funding from some of the biggest names in crypto. The latest round was led by CMS Holdings, eGirl Capital, and Alameda Research, who is fresh off another $20 million investment in Reef Finance.
Other investors includeImmutable Capital, Nascent, Protoscale Capital, LedgerPrime, Fisher8 Capital, and Orthogonal Trading.
Alchemix also revealed that these investors could buy tokens at the price of $700, less thanhalf its current price.
While itself built on top ofYearn Finance, it aims to become a DeFi primitive for both individuals and future projects. Users deposit DAI in the contract and receive a certain amount of alUSD, up to 50% of the deposited DAI. This alUSD is a stablecoin.
Alchemix then uses the deposited DAI to earn yield in Yearn vaults, and this yield eventually reimburses the alUSD – at which point the user can unlock their DAI.
“We see both deals as a huge win, aligning the team’s objectives and our ability to serve the DeFi Nation with upcoming innovations that will continue to make waves in the space.” added the Alchemix core team on Discord.
Disclaimer: The author held BTC, ETH, and several other cryptocurrencies at the time of writing. Andre Cronje, the creator of Yearn Finance, is also an equity holder in Crypto Briefing.
This news was brought to you by ANKR, our preferred DeFi Partner.
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A fast riser in the decentralized finance (DeFi) world has announced a $4.9 million raise today led major industry venture capital groups — as well as some unusual, upstart players.
Alchemix, a DeFi lending protocol whose loans automatically repay themselves via deposits into other yield-bearing protocols, announced on Discord today a $4.9 million raise led by ten investors, including industry mainstays CMS Holdings and Alameda Research, as well as upstart crypto VC players such as eGirl Capital.
Rounding out the investors are Immutable Capital, Nascent, Protoscale Capital, LedgerPrime, Fisher8 Capital, Orthogonal Trading, and one unidentified “individual.”
Exiting news! The Alchemix team has successfully raised funds with amazing and exciting partners. Read the discord announcement here or in this exceedingly large screenshot.https://t.co/iKov18CZBS pic.twitter.com/fB2REerYmr
— Alchemix (@AlchemixFi) March 13, 2021
“Alchemix aims to be one of the key money legos in the Ethereum ecosystem. It is the culmination of countless innovators and one great idea and a lot of hard work from our team,” said Scoopy Trooples, team lead at Alchemix. “[…] We are excited to have the backing of a plethora of reputable investment firms. With their support we can charge ahead full time and make Alchemix even better.”
Unlike with many recent VC investments into DeFi protocols, the Alchemix team put forth some effort to disclose the terms of the investment. Per their Discord post, the team sold tokens from their team treasury allocation at roughly $700 per ALCX, with prices ranging from $680-$800 according to the trading range of the token on the day of the sale, March 11th.
The post said that the sale provides the equivalent of a one year runway for the team, and specified that there is now a yearlong lockup on the team selling any further allocated tokens as well as a three month lockup on the new investors selling theirs. The newly-raised funds will be used for audits, contractors, hiring, marketing, and community efforts.
Alchemix is part of a movement that has been referred to as the “Gen 2” of DeFi — a group of projects building on previous protocols that are currently outperforming the wider market.
CL, a partner at e-Girl Capital, spoke glowingly about the potential of the project.
“Personally I think the team is extreme capable, very bullish on the project as record amounts of stablecoins continue to be printed daily and flow into DeFi protocols, and the idea of immediately being able to spend future yield is very powerful,” they said.
The investment bolsters a growing trend of traditional legal entities and VCs participating in fundraising rounds alongside newer, perhaps atypical investment bodies. However, as the tooling for DAOs and treasury management smart contracts grow more sophisticated, anonymous individuals and entities may be making their way onto more press releases.
