Alchemix USD (Ethereum)

alUSD

Alchemix USD is an fully collateralized and credit-based stablecoin

Risk Rating
Best
$0.98
0.10%
Summary
What we like
alUSD is a synthetic version of USD that is backed by underlying DAI deposited in Alchemix vaults. It enables the user to leverage on top of their USD holdings.
What we like less
alUSD could lose peg in volatile market conditions given the potential risk of DAI losing peg against USD and the operational risk of the Yearn vault losing DAI.
What it means for you
alUSD is a solid way to gain leveraged exposure to USD and put it to work for you in DeFi.
Information
Blockchain
  • Ethereum
Key Metrics
  • Market Cap: $164.3M
  • Fully Diluted Valluation: $164.3M
  • FDV / MC: 1
  • Ranking inside Exponential (among stables): #10
  • Circulating Supply: 167,481,421
  • Total Supply: 167,481,421
  • Volume (24H): $62.5K
  • ATH: $2.13 (03/21/2021)
  • ATL: $0.06 (03/19/2021)
Risk Assessment
Best
Asset Strength

alUSD is a low-cap, fully collateralized asset. This asset is exposed to the underlying risks of Alchemix and Maker, which are protocols rated as Watch out and Good, respectively.

alUSD is a stablecoin that trades within 100bps of its peg to USD, making it a somewhat volatile store of value.

Asset Tokenomics

alUSD has an uncapped supply but has inflation control or burn mechanisms in place. The Alchemix Elixir is inspired by FRAX`s AMO design by supplying liquidity to its primary Curve pools for alUSD and alETH. The Elixir is continuously funded by debt repayments which will further deepen liquidity and help maintain the peg.

Asset Volatility

alUSD is a stablecoin that trades within 100bps of its peg to USD, making it a somewhat volatile store of value. The Alchemix Elixir is inspired by FRAX's AMO design by supplying liquidity to its primary Curve pools for alUSD and alETH. The Elixir is continuously funded by debt repayments which will further deepen liquidity and help maintain the peg.

Dependencies

Alchemix

Things to know about alUSD

How does alUSD work?

alUSD is a synthetic asset created on the Alchemix platform. It is minted against the value of DAI deposits which acts as collateral backing the value of alUSD. alUSD is currently backed by a 200% collateralization ratio, meaning for every 100 DAI deposited, the user can borrow 50 alUSD.

Why trade alUSD?

alUSD can be a great way for users to leverage up on their USD exposure as well as hedge against market volatility without actually selling their underlying DAI. By depositing into Alchemix, the user can borrow up to 50% of their DAI value in alUSD. This can then be sold for stablecoins as a way to leverage their USD position without actually losing exposure to their DAI. If alUSD were to depeg, then users would be incentivized to buy alUSD on the open market at a discount to repay their debt or exchange 1:1 with the transmuter for an instant arbitrage profit.

How to redeem back for DAI?

alUSD can be redeemed back for its underlying USD at any time. The Alchemix vault is constantly paying off its own debt as it uses the DAI deposits to earn yield across DeFi. It then uses these earnings to pay off its alUSD debt over time. In essence, Alchemix is providing users with a line of credit on their future expected yield. There will never be any liquidations of a user's collateral unless it is done to repay the debt and withdraw the collateral. Otherwise, the user just needs to burn alUSD on Alchemix to redeem their DAI deposits.