1. Hello all! This time the thread goes to @AlchemixFi ! A genius idea, which makes DeFi move one more step forward! Let's start, and as always I'm going to try to explain it as easy as I could!
$ftm
$ftm
2. Let's start with the real centralized banks and what they do.
You deposit money, they give interest to you, and you'll be able to get more money after 1 year.
For example:
You deposit money, they give interest to you, and you'll be able to get more money after 1 year.
For example:
3. You have 1000 $.
Bank has %1 interest rate.
You deposit 1000$ today, and get 1010$ next year. You earned 10$ just for depositing, and bank probably earned more with giving loans/credit etc.
Bank has %1 interest rate.
You deposit 1000$ today, and get 1010$ next year. You earned 10$ just for depositing, and bank probably earned more with giving loans/credit etc.
4. What if you could deposit and promised the bank that you will be there for 1 year, and wanted to spend that 10$ today?
Meet @AlchemixFi ! A brilliant idea! It goes like this:
Meet @AlchemixFi ! A brilliant idea! It goes like this:
5. You deposit 1000 $DAI to the vault which generates yield in $YFI etc. Let's say it generates %20 APR.
You'll have 1200 DAI next year, and 1500 DAI the next one right?
You'll have 500 more $DAI 2 years later, right?
You'll have 1200 DAI next year, and 1500 DAI the next one right?
You'll have 500 more $DAI 2 years later, right?
6. So you promise that you'll lock your 1000 DAI for 2 years, and take 500 $alUSD today. (alUSD is abbrv. for "Alchemix USD")
You can spend it as you want today. But, why does someone accept the $alUSD as $DAI ?
Because generated yield will go to DAI/alUSD pool in Curve!
You can spend it as you want today. But, why does someone accept the $alUSD as $DAI ?
Because generated yield will go to DAI/alUSD pool in Curve!
7. The yield will be generated anyway, so if everything goes as planned, alUSD will be pegged to DAI anyway!
%90 of the yield goes to the pool, and %10 of the yield goes to @AlchemixFi treasury! So holding the governance token also has a purpose!
%90 of the yield goes to the pool, and %10 of the yield goes to @AlchemixFi treasury! So holding the governance token also has a purpose!
8. If you want to unlock your funds, you can either pay your loan back with $alUSD or $DAI! If you don't pay back, you have to be there for the promised time, if you pay back, you can take back!
9. This is a cool innovation and a great #DeFi lego piece imo. And I really want them in #opera, it will be awesome to have a project like this but instant finality and $0.0001 fees!
Thank you for reading!
$ftm
Thank you for reading!
$ftm
10. If i made any mistake, feel free to correct me too, these are new products that I try to understand and explain, so I can make mistakes, DYOR as always!
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