Alchemix raises $3.1M to build DeFi lending backed by future income
Alchemix users will be able to draw no-liquidation loans backed by future yield.
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.”