I deposted ETH into Metamask then converted to DAI. then from Alchemix was able to deposit whole thing paying ETH gas fee.
My question is if I don't do anything from here will ii get 24.353% APY? or are there still some steps I need to do.
eventually I am going to borrow but wanted to know few things.
my wallet balance is 0
My Collateral balance now is XX.
Available to withdraw is XX/2.
DAI APY: 24.353%
Available to borrow is XX/2.
but if I don't do anything further
You should see the interest accumulate after the Alchemix team Harvests (usually 24 hours)
(Check Zapper.FI or Zerion.io to make sure it shows your deposit into Alchemix) You may have just approved Alchemix to use your DIA.
If you deposit DAI but don't take an alUSD loan, you will not receive any direct compensation in DAI for that.
Instead what happens is this: your borrow limit increases every time the harvest is done. To put it into an example:
Say you deposited 100 DAI into Alchemix' vault, your initial borrow limit is 50 alUSD. With every harvest that limit increases. Fast forward a few harvests, your borrow limit is now at 60 alUSD. If you take that full 60 alUSD loan, only 50 alUSD will be counted as actual "debt" and the other 10 alUSD are essentially provided free of charge.
I hope that made sense.
Hi,
So if we use the example that you used, if my borrow limit increases from 50 alUSD to 60 alUSD and I take out 10 alUSD, does that mean I will not have taken out a loan? I will have nothing that has to be repaid?
Add-on question from that scenario - our borrow limit is half our deposit amount. Does that mean if our borrow limit increases by 10 alUSD (from 50 to 60 etc.), that an additional 10 DAI was farmed during the harvest? If yes, where does this DAI go if it is not compensated to us?
Thank you for your help!
James1091
1) the extra 10 alUSD in this scenario is considered a credit because you had collateral generating yield in the system. taking out 10 alUSD would not count toward your debt. you can think of it as the yield you would have gained by depositing directly into yearn, but you collect it in alUSD.
2) yes, that additional 10 DAI was allocated to your account (proportionally) from the harvest. the DAI flows into the transmuter so that it available for users to transmute alUSD into DAI 1:1.
Thank you for your response. I am a little confused as I have conducted a real-life experiment and it doesn't appear to match what you say. I deposited DAI into Alchemix and my borrow limit has grown by roughly $13. However, when I attempt to withdraw that $13 DAI it states that the maturity date for that loan is in a few days.
I then decided to see if there was a difference between taking out my initial borrow limit and taking out my current borrow limit (which has grown slightly due to yield). By your logic, there should not have been a difference in maturity date between these two loan amounts as the additional borrow limit was 'credit' but again there was.
Is this a UI issue or is something else causing this discrepancy?
Secondly, I didn't really understand the 2nd part of your response (my bad). Can you kindly explain what exactly happens when a user deposits DAI and does not take out an alUSD loan? Is ALL the yield from that DAI added to a users borrow limit or is only some of it? If some of the DAI is spent elsewhere, where would that be and would that mean that taking out a loan makes more sense than leaving your DAI in the Vault? I'd appreciate it if you could use an example i.e. 1000 DAI deposit at 20% APY.
I appreciate your patience and your help.
James1091 Is this a UI issue or is something else causing this discrepancy?
This is a UI issue as it currently (afaik, pls scoopy smite me if I say bs) doesn't really account for "free debt" and will just give an estimate nonetheless.
James1091 Is ALL the yield from that DAI added to a users borrow limit or is only some of it?
All of the incoming rewards that are a result of your collateral being used to farm are added to your borrow limit. A cut is taken out however to feed the transmuter.
James1091 would that mean that taking out a loan makes more sense than leaving your DAI in the Vault?
It depends, really. If you're just leaving DAI in your vault without taking a loan, you'd be able to take out alUSD "loans" every now and then that won't count as debt. However that way you're basically looking at a very generic yield farming function with possibly being hit by opportunity cost. The other way would be to get a loan and use that while it pays itself off.
had similar questions so I want to build on this thread..
Following the example above let's say I decide to
(1) take a loan of the 10alUSD that was minted and then through that into the alUSD farm or
(2) take a loan of all the 60alUSD that was minted and then through that into the alUSD farm
will I net out in the positive in both situations?
I'm primarily looking at this through an investment lens as I don't need immediate liquidity.
I'm trying to understand which scenarios make sense to borrow alUSD and farm it or convert it to other assets for other uses?
kymarfo Taking into consideration that there are plans to remove the alUSD pool (read more about that here https://forum.alchemix.fi/public/d/80-alchemix-request-for-comment-arc-1), it'd probably make the most sense to max your borrow limit and then either convert it into DAI over time using the transmuter or convert it into any other token using tools like paraswap. Then you can stake the converted token into other protocols or if applicable even alchemix pools.
But let's assume the alUSD pool isn't going anywhere, then you'd be just fine to drop the alUSD into it and just farm whatever APY it currently provides. It'd be a net positive outcome in dollar value although you may be subject to opportunity cost.
No financial advise tho ;-)
