Alchemix is a platform that allows users to create yield-backed synthetic tokens. To create a synthetic token, the underlying asset must already have a yield generating mechanism on-chain, such as lending markets or vault-like products.

The first synthetic token created on Alchemix is called alUSD, which is backed by stablecoins. Initially, the protocol only supports DAI, but other stablecoins will be added in the future. The Alchemix dApp consists of Vaults, Transmuter, Farming, and Treasury. The governance token for the protocol is called ALCX.

Alchemix was launched in February 2021 by a team of pseudonymous developers led by Scoopy Trooples. Initially, only Dai could be used as collateral to mint alUSD tokens, with a minimum collateralization ratio of 200%. However, a new vault has been created to allow users to deposit ETH and mint alETH tokens with a minimum collateralization ratio of 400%.

Shortly after launch, there was an incident involving the ETH vault, where users were able to withdraw collateral without repaying their loans, resulting in a loss of over 2,200 ETH. The Alchemix team organized a campaign to recover the lost funds, and they were able to retrieve more than half of the funds.

Alchemix is committed to decentralization and plans to transition into a DAO controlled by the community. The protocol aims to divert a portion of the overall yield to the DAO treasury to support developers and maintain the protocol.