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Have you ever taken a loan that is automatically repaid, without the need to repay it yourself? That’s what Alchemix Finance offers, here is an article that presents the project.
What is Alchemix Finance?
Alchemix Finance is a Defi protocol created in February 2021 which allows to take a loan that will be repaid by the protocol itself. It sounds crazy but it’s real, let’s see how it works:
If Alchemix is able to do this, it’s with the help of YearnFinance’s Vaults system. For those who don’t know what a Vault is, it’s simply a pool with collected funds on which active strategies are applied to maximize returns.
The strategies used within a vault are active strategies voted by the community. The strategies can be very diverse, such as:
- Deposit funds in other protocols and borrow other assets
- Deposit funds in other protocols to increase liquidity and collect fees
- Farming different tokens and reselling them for profit
Each vault follows a well-defined strategy. If you want to reclaim the collateral held in a vault, then you get back the asset you deposited + the yield on your deposit less the vault costs (gas cost, strategy developer payment and so on.)
