Alchemix is a unique DeFi protocol that offers self-repaying loans. Users deposit collateral (like DAI or ETH) and receive a synthetic token (alUSD or alETH) representing a loan. The loan is repaid automatically over time using the yield generated by the deposited collateral — meaning borrowers never need to actively repay.
Self-Repaying Innovation
Alchemix's key innovation is the self-repaying loan model. Your deposited collateral is invested in yield-generating protocols (like Yearn Finance), and the yield automatically pays down your loan balance. You can withdraw your collateral once the loan is fully repaid by the yield.
No Liquidation Risk
Because the loan is overcollateralized and self-repaying, there is no liquidation risk as long as the underlying yield protocol continues to function. This is a major advantage over traditional crypto lending where liquidation is a constant risk.
