A loan that pays itself off?

Decentralized Finance has just begun to take shape, and several projects have pushed the envelope with features never thought possible.

Alchemix is a DeFi platform that continues to make waves in the industry. A newly released blog on their website has detailed what version 2 of the platform aims to do. 

Alchemix came into the spotlight on its release of Self-Repaying loans. Like other DeFi platforms, these loans are heavily collateralized and offer stablecoins in return.

Unlike other platforms, Alchemix accepts yield-bearing collateral tokens and uses the yield to pay down the users’ balance. 

This feature deemed impossible quickly became popular and the protocol grew until there was over $1bn worth of crypto-assets locked on the platform.

 The second version of the platform is close to full release, with the new version offering innovative features including collateral types and the ability to provide credit to other users. 

The most exciting prospect is delegated credit.

What is delegated credit?

Delegated credit allows a user more power over their collateralized yield. Instead of having your yield going back to the repayment of the loan, you could have a portion of the yield go toward payments of other services such as subscriptions or other dapps.

Alchemix has also built into the new platform new growth options. The new roadmap shows opportunities for opening the development up to the community and even grants to help build the ecosystem.

More developers might lead to even more innovations down the road. The next stage for v2 of the Alchemix platform is the audit stage which could prove to be very important.

This summer, the platform suffered an exploit that repaid users loans too quickly. The exploit caused a loss of ETH 2,000. Alchemix asked their users to return these funds but only 40% of the users complied. 

These exciting new features continue to push what we once thought was possible in the financial world. With the recent positive market, there could be an influx in users of the DeFi space and larger amounts of crypto-assets locked into these platforms. 

If DeFi continues down this path it could very well pose a threat to the traditional banking industry.

In the meantime, you can still use crypto for recreational purposes at places such as Bitcasino, 1xBit, or FortuneJack.


Updated: 10/08/2021 — 19:00