Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Scoopy Trooples: Alchemix – Financial Alchemy Through Self-Repaying Loans

Episode Date: May 21, 2021

Alchemix is a DeFi protocol that enables users to create self-repaying loans. Users deposit collateral (DAI) to take out a loan in Alchemix's native synthetic stablecoin, alUSD. Alchemix then uses the DAI deposits and puts them into the Yearn protocol to earn yield and over time, that yield automatically pays off your debt.We were joined by Alchemix co-founder Scoopy Trooples, who gave us a deep look into how the protocol works, alUSD and the ALCX token, and what is coming out soon with V2.Topics covered in this episode:Scoopy's background and how he got into cryptoWhat is the story behind the name Scoopy Trooples and his anonymity?A high level overview and use case of AlchemixScoopy's vision for alUSDThe integration with YearnWill alUSD drive down yields of other stablecoins?How Transmuter works to maintain the 1:1 pegThe long term vision for Alchemix and biggest potential risksThe Alchemix communityHow they raised their fundsEpisode links:Alchemix WebsiteAlchemix DiscordAlchemix on TwitterScoopy on TwitterSponsors:Exodus: Exodus the easy-to-use crypto wallet available on all platforms and supporting over 100 different assets. - https://exodus.com/epicenterParaSwap: ParaSwap’s state-of-the-art algorithm beats the market price across all major DEXs and brings you the most optimized swaps with the best prices, and lowest slippage - http://paraswap.io/epicenterSolana: Solana is the high performance blockchain supporting over 50k transactions per second to power the next generation of decentralized applications. - https://solana.com/epicenterThis episode is hosted by Sunny Aggarwal & Zubin Koticha. Show notes and listening options: epicenter.tv/392

Welcome to Epicenter, Episode 392. Today we have on with us Scoopy Trooples, who is the co-founder of Alchemics. But before we talk to Scoopy about Alchemics, we'd like to tell you a bit about our sponsors this week. Exodus. Exodus is an easy-to-use wallet which supports hundreds of assets and has native apps for all platforms, including iOS and Android. And as a fully non-custodial wallet, they're firm believers in the not-your-keys, not-your-coins mantra. Go to Exodus.com to give it a try. Next up, we have Paraswap.

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All right. So, Scoopy, it's super awesome to have you on. You and I have like, you know, I feel like we've like chatted on like Twitter threads and stuff for a long time. I think I do this like thing where annually I figure out I run a script at the end of the year to see whose Twitter accounts I've liked the most, like whose tweets I've liked the most. And I think in 2020, you were like number like seven or eight on my list. And which is really cool because like this is the first time we're ever talking in person. I think like probably everyone else in the list, it's like people I actually knew in person or something.

But it's like you were, so this is really cool to finally get a chance to talk to you. So yeah, can you tell us just a little bit about yourself? And like, you know, I mean, okay, one thing that people can probably obviously tell us. Scoopy Trooples is probably not your real name. So tell us a little bit about how you got into crypto and what? why you use the name Scoopy Trooples. Yeah, I mean, it's fun that we interact on Twitter. You know, I always love that you have like these random geography fact threads that,

this continual thread. It's always a highlight of my day to find, to learn something new from you. But how did I get into crypto? Yeah. So it was, I mean, my journey like all the way started back in, I think it was in 2011. and when I heard about the Silk Road for the first time, there was like a giant expose. It was like on Galker and all sorts of internet websites.

And, you know, I got interested in it. And I downloaded a tour browser and I went to the Pirate Bay. And I found a website where I could buy Bitcoin. And I was like, right about to hit the buy button. And then I was just like, nah, I don't think I'm going to do this. This is weird. this internet money stuff, you know, it sounds dumb. And then I backed out.

And then so it sort of knew about Bitcoin this entire time. Didn't pay a ton of attention to it. And then like in 2013, like a family member is like, oh, you got to get this Bitcoin thing. It just went up to like $1,000. And I'm like, wait, what? Last time I checked it was like a dollar. And so I thought, you know, I just dismissed it. I thought it was a bubble.

And then I felt really vindicated when it crashed, you know, and it was in its bear market. in like, you know, 2015 and 2016. And my wife was like, hey, Scoopy, we need to do some investing and, you know, start looking into that stuff. And at this time, I was like, oh, I wonder what about this Bitcoin stuff. I know I was like following that a while ago. How's that doing? And, you know, I went down the rabbit hole and I learned more about it, you know, on a deeper

level. And I was like, you know what, let's do this. Like, you know, screw stocks. Let's go into Bitcoin. And so late 2016, I got into Bitcoin, and 2017, I did what everyone else did, and they, you know, spend a lot of money on ICOs and coins that have fancy infographics that make it look like they have an ecosystem, but they really don't have an ecosystem at all. And then eventually I just kind of gravitated more and more towards Ethereum, especially towards the end of 2017 and early 2018 when the app started becoming more and more popular on Ethereum. I think CryptoKitties was my first D app, and then I played around with stupid Ponzi money games, because that was the only thing out there in 2018. There was no, like, D5.

But at that time, like, you know, even though these were like kind of stupid money games, it kind of got my, you know, my brain going, like, whoa, you can do a lot of stuff with programmable money. And at that time, I wasn't a developer, but I was like, you know what, let's go in. let's do this. And so I started learning how to code. I became a web developer at that time. Started getting some good jobs for, you know, Web 2.0 stuff using React. And then it was a summer of 2020. One of my friends I met in crypto discords, he's like, hey, I need a front-end developer for this app I'm making. And at the time, it was called CheeseFi. This was back in June before sushi, before yam, before any of the food token craze hit, we had cheese fie, and it was actually very similar to what ended up becoming alchemics. It had some pretty key differences that we

decided that we realized that would make it non-viable as a platform. Essentially, what we would do for cheesefi would, you would lock up a dye for between 10 and 100 days, and then you get this a cheese token in exchange for doing that. And then the yield from your die would then go to buying off the cheese token from the market from Uniswop. And then we were like, we thought it was a really cool model. But then we learned more about like MEV, minor extractable value and sandwich attacks.

And we realized that a lot of value could be extracted from that system. So we had to go back to the drawing board and create something different. And then through that process, we came across. Like, you know, what is now alchemics? How did you kind of decide to go with the name like Scoopy Trouples? I think we actually were discussing this right before the show. I think it would be really interesting to discuss with viewers. Like, what got you excited about that name specifically?

All right. So in Rick and Morty, there's an episode where they go to Pluto because, like, Jerry's adamant that it's a planet, even though everyone says it's not a planet. And like the ruler of that of Pluto's name was a scrupy nuples. And then later on, I like that name so much. I was playing Dungeons and dragons and I made this like silly character based off of scroopy nuples. And that character's name was called Scoopy Trooples. And then when it came time to make my Twitter account, my normal handle that I use other places was gone. And I was like, huh, what can I use? And I was like, oh, Scoopy Truples. That's a fun name. Let's go with that.

one that can be my new handle and thus scooby triples was born and only blew up on twitter recently really like in defy summer i was like some nobody with like 100 followers for like the longest time so what made you decide to uh go like build this whole project anonymously like you know for like five years of epicenter surprisingly we didn't have like any anon people and then i think suddenly in the last like six months we just had this like you know maybe i think we might be like our third a non-guessed at this point. And it's like, and obviously, so there's this larger trend in like, you know, anon, like building anonymously. I mean, I guess arguably it's not a new trend, arguably it was the first trend in crypto as well from Satoshi. But why did you decide to do that?

And what's been your like experience doing that? I definitely think like the ethos of crypto should be anon or pseudo-anonymous. I mean, if you go back to the founder of it all, yes, Satoshi Nakamoto was. But, I mean, the reason for that is that, you know, when you are holding crypto assets, you know, you're holding them like in your house. You know, you got your seed phrase maybe, you know, backed up on a piece of paper or, you know, maybe a metal card if you're really precocious. And, you know, somebody could, you know, easily just like break into your house and then rip off all of your, you know, all of your money, all your assets, you know, just by stealing some words on a piece of paper from you. And with that in mind, like, I'm anonymous for my own safety. Like, I don't want to expose me or my family or anybody, you know, who's close to me, you know, to my dealings in crypto.

You know, if word got out that, you know, my, who I am in real life is Scoopy Truples, then, you know, it might make people that I love and I care about targets, also including myself. And there's also the thing that, like, I haven't told, like, anybody in my really, like close family and friends about Scooby Shruples or Alchemics because I like to kind of separate that life from, you know, or that from, you know, my normal life because I don't want people to treat me any different than they have treated me in my entire life just because they think I have money. And so, you know, for safety and my own personal reasons, I choose to be

anonymous. I mean, I'm surprised that there's not more anonymous founders out there. Because I think, like, you know, putting your name out there and your face out there is kind of dangerous. One thing I wanted to kind of dive into was the mechanism design itself of alchemics. How would you describe to someone hearing for the first time what alchemics is at a high level and what the main kind of use case it provides for defy is? Okay, so at a basic level, the way alchemics works is that you deposit dye into the system. And then you can use that die as collateral to mint our own synthetic stable coin ALUSD. And you can borrow up to 50% of the amount of collateral that you have. So if you put

in 100, you can borrow 50. And then what happens is that the dye that you deposit gets deposited into urn.finance into their die vault. And that earns around 15% interest a year. And what happens is that the principle from your deposit is earning yield, and that gradually pays off your ALUSD debt over time. And then that harvested yield also goes to a module that we call the transmitter, which acts as a backstop to the peg. So if for some reason, ALUSD is trading at under the peg on our curve market, then you could go to the transmitter module and guarantee a one-to-one conversion for,

from ALUSD to die. Other things for the transmitter that fill it up are when people repay their loans in dye. So a lot of people have been with alchemics, you're not locked in at any time for any amount of time. So you can always repay your debt and then exit your collateral from the system. So whenever anybody pays and die, whether that's through direct wallet payments or if they liquidate their die collateral to pay their debt, that die gets sent to the

transmitter. And the cool thing about the transmitter is that it takes all of its dye and puts it into urine. And then that yield from the transmitter is then passed along to the depositors in our vault. So it boosts their APY because we have an effectively higher principle than just the deposits themselves because of the transmitter. So that's how we can get like 25% interest where urine is getting like 15%. Let's get to our sponsor, Exodus. Exodus is a fantastic cryptocurrency wallet that strikes a right balance between ease of use, security and great features. You can get Exodus on the iPhone, desktop app, web app, Android, whatever platform you use.

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We want to thank Exodus for their amazing support of Eb-Center. So the dye that gets earned from urine, you know, so does a portion of it go to start paying off debt and a portion goes to the transmitter? Or is it somehow, like what percent is going where? This is a little bit tricky. Since we have our own synthetic stable coin, ALUSD, when we harvest the yield from urine, we reduce amount of everyone's debt, like globally in the system. when that happens. But we don't actually have to pay the die to like the users at this point. That die just ends up going straight to the transmitter. So all of it goes to the transmitter. And it decrements everyone's debt at the same time. There is a 10% fee that Alchemics charges

on yield harvests. And that's kind of our rake. That's our take. That's our project fees that we take. And we have to do that. At the bare minimum, we'd have to do that just to pay for the fees for harvesting because it's not cheap to run an app on Ethereum. Gas is very expensive. And some of the processes that we do is we don't have users call these functions. Instead, we kind of batch it all together. And the people were running the protocol, you know, the dev team, we, you know, pay that cost for our users. How do people earn from the transmuter? Is everyone who has ALUSD earning from it, or do people have to actually deposit into the transmitter?

So the transmitter is not really a vehicle for yield or earnings. It's just a guarantee that you can redeem your ALUSD for die. And we only really see usage of that when the curve pool that we have gets a little bit imbalanced and there's more ALCX token or ALUSD tokens than the curve tokens or the kind of curve metal pool tokens, the three pool. So whenever there's like an imbalance there, we might see people use the transmitter, which kind of acts as like the backstop of the peg. But that's like any event that like ALUSD falls off the peg like really badly, then people could like buy Al U.S.D off the market, then put it in the transmuter, and that could be like a source of yield

if you treat Al UD as a bond. But other than that, no, it's just a redemption model, you know, a method of way to backstop the peg. So it's not really meant for yield. But the transmitter itself does deposit its over 200 million die into urine and then, you know, passes on that yield to our users. Would you say it's safe to characterize the main use case? people are using alchemics for is getting extra yield. You mentioned 25% relative to 15%. Or have there been other really interesting use cases that have surprised you that came off the protocol? Yeah.

So, I mean, a lot of people, what they're, you know, they're just depositing in there and just earning yield on it. But for the most part, people are taking on ALUSD loans. And some people are using it for personal finance where they're selling the ALUSD for like USDC then exiting it off of Coinbase. I know I've confirmed that we've had some people do this. Somebody bought a boat for their dad using an alchemics loan. I know a guy bought a Porsche.

I know somebody who's paid for their grad school tuition using an alchemics loan. Also, somebody paid their hospital bill for their newborn son by financing it through an alchemics loan. and other than personal finance, a lot of people, what they're doing is they're either selling the ALUSD and investing in, you know, speculating in the market, or they're taking their ALOSD and then supplying like liquidity on curve and then earning ALCX that way. So some people are, you know, using it for finance. Other people are speculating and other people are just trying to maximize their yield farming even more.

So on that personal finance use case, one thing I'm a little bit of, little bit confused about is what's the use case of borrowing a stable coin against over collateralized stable coin. So like, you know, people often will use like maker compound because to borrow USD, but they put down collateral in, you know, ETH or BTC or something because they're trying to maintain, you know, exposure to the collateral asset. And also, you know, there's often like tax benefits as well to doing this. But why would I put down $200 of a stable coin just to borrow $100 of a stable coin instead of just selling or spending my original stable coin?

So a lot of times, like, when you have your own savings and stuff like that and then like an expense in life comes up, you have to make a choice between consumption and saving. Whereas with alchemics, you can do both. You can both save and spend, save and consume. So let's say you have $1,000 saved up. That's your rainy day fund. And then you get into a car accident. And it turns out the bill for this car accident is going to be $500 to fix it.

If you were to pay that out of pocket, you'd be left with $500 of savings. And let's say you go ahead and you put that $500 in D5 and you're making, you know, 15, 20% a year on that. That's great, right? But with Alchemics, what you could do is you could put your $1,000 in it, take out that $500 loan, and then you could be earning interest on the $1,000 that you put in. So you'd have a larger principle that's earning yield paying off your loan. So by the time that the loan is paid off, you'll have $1,000. Where if you paid out of pocket for that car accident, and then you invested that $500 in defy and then it, you know, compounded over $2,000. years, you'd be looking at maybe like $700, $750, but with alchemics, you'd be ending up with $1,000.

The example I said was like, you know, sometimes you want to maintain exposure, the reason you'd borrow against your ETH is you want to maintain exposure to ETH and you think ETH is going to go up. Here, it kind of, it's actually is somewhat similar, but you're basically saying, hey, I want to maintain exposure to, it's not really a stable coin. It's a yield earning stable coin. Because in Defi at this moment, even stable coins can give you quite a high return. Alchemics helps you maintain exposure to this high yield earning stable coin and you're borrowing this low yield earning stable coin, which is the Al-USD. Is that essentially what's happening here?

Yeah, I'd like to think of Alchemics as like a savings technology in a lot of ways where, You're encouraged to both save and spend. By saving, it's giving you access to, you know, a greater and greater line of credit. So it's encouraging you to save. And it's also kind of putting a limit because there's like a 200% collateralization ratio. Let's say you save up a million bucks and then you go into alchemics. You can take out $500,000. So it's not like you're going to be able to spend all of your money.

This is important because let's say, you know, the yield. on alchemics dry up or you need your collateral back for something in real life and you want to get out. You can pay off your loan. Let's say like if you still have your Allu-St-A, Al-U-S-D or you converted it to die, you can pay off your loan from your wallet or you can liquidate your collateral. So you can get out. It gives you a little bit more optionality in your spending. So if you wanted to, you could just have that debt repay itself or you could repay it yourself manually. And if you repay it yourself manually, yeah, you'd get a little extra gains from, you know, the extra principle, but it'd be pretty similar to paying out of pocket. But the whole idea is it

gives you that optionality. You can essentially get a line of credit that pays itself off. And that that lets you just like kind of take risks and do things and spend money like kind of in a guilt-free way. Because I know like I'm a saver naturally. And I always like hate to take money out of my savings or out of my investments to, you know, to buy something or to fund my real life. And with alchemics, I feel like I'm not forced to make that decision anymore. I can just be like, hey, I'm just going to take out a loan that's going to pay itself off it. In fact, what I do for my own personal finances, I have a decent amount of dye in alchemics, and I just draw some monthly, and then that pays like all my house and family bills.

And at the end of the month, I have almost no debt. And then I just take another loan out and then just repeat the process. So when you're looking for a flight, you go to try. a flight aggregator to see all the different places where you can buy the flight, to get all the options and make sure you get the best price for your travel plans. And when you're making a defy swap, just do the same and use parasy swap. It beats the market prices across all the major dexes because it aggregates them and thanks to their network of professional market makers, you get zero slippage on your trades.

So they just pushed a huge update that's even faster, more liquid thanks to a brand new algorithm. Paraswap is now multi-chain and has expanded the polygon and Binance smart chain. So go and check it out. Give Paraswop a try at pariswop.io slash epicenter. Where do you see ALD within Defi? It seems like you see it as a tool for borrowing in a guilt-free way in the kind of way that you mentioned. But do you see it like as a major? stable coin for DFI?

How do you see it being composed upon? And what do you see its role in the whole stable coin ecosystem that already exists in DFI? Yeah, yeah. We're working actively on trying to get more integrations for AllusD. First step from that one is getting reliable price feeds for Al USD. Right now we're only on the curve and factory pools, and they don't have like any sophisticated twops or oracles associated with that.

So we're trying to work with Chainlink to get a price feed for our ecosystem tokens. And once that happens, we're going to be able to get AlUSD on places like Avey, like Rari's Fuse, and other lending markets like Cream as well. But I think more interestingly, than just having it being like a collateral or capital asset, is that we could work with like margin protocols or options protocols. and then you could use AlliosD to fund those positions. And then if you're borrowing that and a loan that repays itself, then you can go short, you can go long and be as degen as you want to.

And know that, you know, even if you lose, even if you get wiped out, you know, you still have your collateral that you use to get your LUSD loan and that debt will vanish over time. So I think that's kind of cool. It's like an idea of safe aping. Could you clarify that again? So you think people can put down dye and then borrow alchemics, sell that alchemics in exchange for... Borr al-U-S-D.

Al-U-S-D. Oh, sorry, yeah, yeah, yeah, L-U-S-D. So people can put down, die into al-chemics, borrow L-U-S-D against it, and they can sell that L-U-S-D and buy with it options or some other kind of derivative instrument and that's, as you said, like kind of a guilt-free experience. Is that kind of what you're envisioning? Well, what we're trying to work for is getting Al-U-SD so integrated into D-Fi that you wouldn't have to sell it for another stable coin, is that you could go straight into that options contract

or into that margin position using Al-U-S-D. That's the goal right there is to get to that point where it can start to be used across D-5 in different use cases and stuff. Because right now I can go to like margin swap, I can go to DYDX, I can go to, you know, various platforms and lever, you know, my, my stable coins. So I can do other things in defy with them, right? And Al U.S.D does not have that just yet, you know, because it's still early in the days for it. But once we get those integrations in, it'll, you know, start to drive more the demand side for the currency itself because it'll have a lot more uses instead of just flipping for dye or USDC or tether. and some other stable coin.

And I think that's an important part of having long-term pay stability is to, you know, take care of that demand side. Essentially, if that happens, All-USD is going to be competing then with things like Dye and USDC and stuff for, like, usage within Defi. And isn't it actually going to drive down the yields you can earn on, like, die? because like, you know, right now, let's say, you know, right now, let's say on, with, with, on your, let's say, put depositing in Curve is one of the highest, uh, sources of yield, right? And that's like, you know, one of the most incentivized pools on Curve is that like, three pool, uh, with Di USDT and USCC. But now, let's, let's imagine a world where AlUSD becomes like, you know, the fourth big stable coin in DFI, right? What does that actually then drive down yield? on die now because it's only getting a quarter of the curve rewards rather than a third of them. And essentially the question is, as AlUSD becomes more popular, doesn't that drive down the yields from other stable coins? I think this is a really tough one to predict because like kind of what determines the

yield of a stable coin, there's a ton of factors involved. You know, a lot of that, you know, because urine uses seven different strings. strategies in their dive vault for, you know, for version two of their vaults. And one of the strategies is to LP into that curve pool that you just mentioned. But they also have a number of other strategies. So I'm not really sure that we would, you know, if LUSD became, you know, a huge market, you know, cap that we would dilute that. I mean, that's sort of saying like, you know, there's a stable coin out there, USDN, and that has like an insane amount of curve gauge weight. Is USDN taking yield away from die?

You know, like, I feel like the answer is yes and no, because they might be taking some of the curve rewards away from that three-pool curve and lowering the yields for die. But at the same time, then people also balance their positions based on the yield. So the market reacts to that. So the appropriate amount of capital will be allocated to places to get that yield. So the desired yield is 10%. And then you see it's 5% somewhere. You're not going to put your stable coins in there. You're going to try to find somewhere else.

So I think it'll balance itself out. And I don't think AlUSD would have a major impact on die yields. I haven't given this a ton of thought, to be honest. I mean, I might want to come back and issue like a deeper thought on this on Twitter for you sometime soon, Sunny, but my gut feeling is I don't think we would have any significant impact on Dye's yields. That said, though, on version two of Alchemics, which is slated to come out in two to three months, we will be adding multiple collateral types. So you'll be able to put in Dye, USDC, USD, you name it, any viable stable coin that has

some good on-chain yield. They'll all be collateral assets for L-U-SD. So we'll be siphoning yield from all of the stable coins in the future someday. Let's get to our sponsor, Solana. Now, this is a special ad for me to read because I've been a deep supporter of this project since meeting the Solana team back in 2018. I invest personally in the project, and my company, Cross 1 is super deeply involved in the Solana ecosystem, including running the biggest validator. So what's so cool about Solana?

Well, we all know that scalability is the single most important issue facing the blockchain industry today. And the Solana blockchain is an amazing solution for it. The network supports thousands of transactions per second with 400 millisecond block times and over 500 validators. The special thing about Solana is also that it's not a sharded blockchain. It's a single blockchain hyper-optimized for performance. So that makes it really easy to maintain compostability

between all of the apps on Solana so that they work together seamlessly now and for error. The Solano ecosystem is growing at a rapid pace and it's a great place to build your project or just get involved with the community. So go to Solana.com slash Epicenter to learn more. What does happen in Alchemics when the yields go down? So right now, let's just say as an example, the yield on die is 25% a year and it'll take about two years for, you know, let's say you you put down $100 of die, you borrow $50 of LUSD, it'll take about approximately two years to pay off that entire loan. But now let's say suddenly, you know, the yields drop from 25% to 5%.

And now this loan suddenly takes 10 years to pay off. How does that change? Where does that affect, like, you know, get reflected in the alchemic system? I imagine that has to propagate somewhere in the alchemic system. Does it affect the LUSD price? Does it affect Yeah, where does that affect get seen?

Does it change the collateralization ratio needed? At the most basic level, it'll mean that your debt repayment times will take longer. You know, the system should still work fine, but because the debt repayments are taking longer, the amount

of yield flowing into the transmitter would be lower. So in the event that we do destabilize, you know, and we break our peg and stuff like that. And then, let's say people use the transmitter and they use everything that's in the transmitter and it goes down to zero. At that point, then, you know, Al U.S.D then would become like a bond of sorts. And it would still have value and it's still trade at the market in the market, but you might take a discount when you sell it.

Or you could then purchase it from the market and then, you know, put it in the transmitter and it would gradually turn into to die over time. So that's what we, you know, worst case scenario we see happening in the event that yields collapse. But if yields collapse for urine, they're probably going to collapse everywhere because they are incredibly flexible and they have a, you know, very competent team of top-notch developers and strategies who are heavily incentivized to find the best yields because they earn profit off of them. I'm still confident that urine will have very competitive, you know, yields in relation to other projects in DFI. But that said, yeah, definitely lower yields would or could negatively impact the peg.

We're not sure exactly how much would happen to there. It depends. It really depends on if the peg itself breaks, if it doesn't, and our liquidity incentives and the demand to supply liquidity to our curve pools and other markets that we'll have in the future, if that's good enough and the pay can hold. It'll just mean that debt repayment times will take longer. But if the peg does break, then we would be in a little bit of a precarious situation. So that is a risk just being straight up with you guys.

Why is the peg holding today? From my understanding, it feels to me that it should be, LUSD should actually probably be treated as a bond even right now. and so should probably be trading at a slight discount. Like there's a time value to the money, right? And so, like, yes, you can convert it at one to one on the transmuter, but, you know, at some future time. And why is that not reflected in the price of AlUSD today? So right now, AlUSD, there's a supply of around 330, 340 million LUSD out there.

And currently there's around 220 million. die in the transmitter. So roughly two-thirds of the Allioste out there is backed completely one-to-one that you can redeem it. But the other part is that these are over-collateralized loans too, like at the end of the day. So just like Maker-Dow has over-collateralized loans, just like Liquity has over-collateralized loans. You know, we kind of have the same thing. So it's not only like, you know, the die in the transmuter that's backing it, but it's also the dye that's collateral that's backing it as well. And the fact that people can, you know, repay their debt at any time.

So, like, if you borrowed Al-E-S-D, and then you're, you know, you're trying to earn on it. And then you see that, you know, its price goes down, you would just feel like, all right, I'm going to take my All-O-S-D out and pay down my loan because these tokens aren't worth as much. And that right there itself is a paging mechanism because when you pay off with LUSD, it destroys it, you know, and then that takes it off the market and, you know, we'll help it bring it back towards, more towards equilibrium.

So I hope that answers your question. The other part of why it's, holding the dollar peg so strong is, yeah, we are incentivizing liquidity on Curve. We, uh, if you stake the, the, the, the Al USD3 Curve LP tokens on our website, you can earn close to 40% APY on, in the form of ALCX tokens. Um, our audit from CERTIC just came back and that's going to allow us to get on Curve. And we'll be able to have access to the curve gauges as well. So that will, um, add a number.

other source of yield for our stakers and depositors. I think it's like the magic of the transmitter coupled with the fact that, you know, we have these liquid markets that are incentivized that is keeping this peg up. So that makes sense that you can earn Alchemics tokens by like depositing into the curve pool. But, you know, curve heavily incentivizes things to be priced one to one. But at the end of the day, even on curve, things can still be, you know, the price of AlUSD could still be less than $1 relative to the other tokens in the pool. And as long as all you're checking is that, hey, is there liquidity in the pool? So why is no one arbitraging and like kind of even moving the curve pool to be at whatever like a properly priced bond should be?

I don't think there's really any incentive to do that. There is no ARB there, you know, for it right now. And if you tried to manipulate it and bring the price of ALUSD down, that would just completely get arbed away because people would say, hey, you know, I can, you know, buy, you know, AlUSD for 98 cents and then transmute it, you know, and get, you know, a dollar for it, you know, for 98 cents. And they can get some instant yield that way. And we've actually seen that this week. with the ETH crashing in price, since ALCX is tied to ETH in our sushi swap market, we've also gone down with ETH as well. And because of that, our yields have gone down. So we've seen people exit the liquidity pools.

We've seen maybe, I think we had like 600 million liquidity there last week, and now we have around 550 million. And at the same token, since a lot of people were pulling out their die or their three pool curve token, from that pool, there was a bit of an imbalance in how USD went down to like 99.5 cents, whereas before it was roughly like, you know, I think it was trading at a slight premium to die at the time before that. And then because there was that little ARB, people were then starting to use the transmuter, and we lost, you know, transmitter had some funds taken from it during this period as well. So, but the peg held, it's still very strong, and things seem to be in an equilibrium right now, and we're not seeing those outflows anymore. So I think that's just the system working as intended.

How long does it take for transmutation, at least like in that case that you talked about with die peg breaking to like, you know, 95 cents? Or sorry, the ALUSD peg breaking to 95 cents relative to die. how long does it take to transmute like al-USD into dye? At minimum, it's going to take 50 blocks because we put the distribution of the dye for L-U-S-D depositors and the transmitter to take a little bit longer. So that way people wouldn't be able to like grief it if they like called harvest and then they could, you know, then immediately get that dye. And, you know, so in order to stop that, yeah, we have that split spread over 50 blocks.

But usually that happens whenever somebody does that will start flowing to your account when we either harvest yield or somebody repays their debt and die. Now, there is another function that you can use to transmit faster. It's called force transmute. It's kind of a bit of an advanced function. And it's really only for EtherScan Pro users. basically you'd have to query an Ethereum address that's staked into the transmitter. It's possible that you can have too much dye allocated to a position. Let's say I put in 100 ALUSD.

There's a little box in there that says the amount of transmutable dye I have. If I have put in 100 alusD, then I have 100 transmutable dye. It will just burn the 100 ALUSD and give me 100 die when I hit the transmute button. but it's possible with our current design for the transmitter for you to have 100 LUSD deposited and then have more than 100 LUSD that are more than 100 transmutable dye. I could have a million transmutable die in fact like on a hundred position and what you can do is you can force transmute somebody who's over allocated and when that happens all of their excess allocated die goes straight to your

allocated die. So it's sort of like an incentivized cron job. There's a handful of people we know in the ecosystem that kind of take care of this and they've been we don't know who they are, but they figured out this force transmute system and

they have been arving the peg here and there which is actually kind of a service for everybody in the ecosystem because they're helping bring stability to the price of Allios D. We did try to implement that into the the UI, but we were having some issues with our graph, and it wasn't reliable, so we just

cut it from the UI. But occasionally, what we'll do, if we notice, like, you know, people like, my dye isn't transmitting, we'll force transmit a couple positions and then transmit ourselves, and then that will disperse the yield evenly to everyone else in the system, kind of immediately at that time. Sorry, one question, I didn't fully understand. What is the situation? How do you get yourself into a situation where, how do you get yourself into a situation where, that your dye allocate is greater than your Al-USD. How do you get into a situation where you can be force transmuted?

So this was kind of like a computer science problem is that imagine like, you know, the dye that's flowing into the transmitter is like rain falling from the sky, and your staking position, your deposit for Al-U-S-D is like a bucket. And of course, when the bucket's full, you would expect it to, you know, not overflow or anything like that. it would just be full, right? But because Ethereum is the way that it is, and you can't have, like, kind of code, like, self-execute, you always have to, like, you know, pay the gas and push that button to do it, we couldn't find a problem or a solution at the time for that terminality for ending the, you know, the distribution for people who are, like, overfilled. And so

we were kind of scratching our heads. We were. We're playing around with an epoch model and other things like that. And then one of our devs had made like an app from like back in 2018. And it's like, hey, what if we repurpose this code for the transmitter? It's like, if we do that, then it's going to overfill. And it's like, what if we turn, you know, an overfill position, let somebody else be able to transmit that, then we could just send the divs over or the allocation over to them. And that would be like an incentivized cron job.

And so we're trying to use crypto tokenom or Xx. economics to solve a computer science problem, essentially. The good news is that in our version two, we have figured out this problem, and we're not going to have to do this awkward forced transmutes, kind of like work around to get the system working, and it'll just work, and it'll be simple, and it'll be nice. That's a pretty clever solution. I like that. Now I understand with the whole.

That's pretty cool. I mean, before the system we had, it was untenable where you'd have to stake your AlUSD weekly and then claim whatever got transmuted weekly and then restake it. And, you know, when we were kind of testing that before we launched, like, I just hated it. I'm like, no, nobody's going to do this. Nobody's going to spend, you know, $500 in gas for, you know, an undetermined payout every week. That's why we switched it. It's not perfect, but it works at the time. And we have a much better solution going forward.

So I don't know if this is, you might not, this might not be what you want to hear, but what this somewhat almost reminded me of was, so I'm very familiar with Fay. And this, like, slightly reminded me of Fay in some ways, where, especially in the case where Faye is over collateralized, where, you know, which it is currently, right? Like currently in Faye, the, the, the, the,

ETH collateral that it has is much higher than the outstanding like stable coin liabilities it has. And their premise is that, you know, we can keep this peg going as long as possible because anyone who wants out can get out at any time. And we're able to do this and we can keep this going for as long as possible because the ETH price is going to, as long as the ETH price is going to keep going up, we're going to continuously keep having a way, for the people who want out to get out when they want to get out. It seems that this is actually very similar in a lot of ways, but instead of depending on the ETH price going up,

here it's depending on the yearn yields, right? As long as the yearn yields are like earning money, the protocol will have enough reserves to let the people who want to go out be able to go out. And what's nice as opposed to in Fay, it's like this collateral is lower bounded at, Hopefully the interest rates on urine don't go negative, right? Like, I mean, in traditional stratify, we do actually have negative interest rates.

But, you know, at least on hopefully on urine, the prices, it should never go negative. And at least it's lower bounded at zero. While in the Faye case, you know, there's a situation where the protocol can become under collateralized as well. I didn't really think about that comparison. But yeah, yeah, I guess we're there backed by Eith, you know, collateral and buying power. to buy back everything were powered by, you know, die yield being able to buy back everything. The cool thing about alchemics is that, like, you know, you could use it by yourself. You could be the only participant in it.

It wouldn't make much sense if that were the case, but you could because, you know, your dye collateral is locked until either you repay your debt or the, you know, the yield is paid off itself or, you know, the yield pays off the debt itself. So, like, you know, even if, like, you know, it takes 10 years for, you know, your loan to mature and nobody's using the system and you're just holding this AlUSD out there and you don't know what to do with it, eventually you will be able to redeem that for die. So there is always that guarantee that we're going to be able to make you whole in alchemics.

It just might take a long time in the worst case scenario. And that's actually something we really, really care about. You know, a lot of us came from, like, D-Gen money games. And we didn't like the fact that so many people were getting wrecked or the fact that if somebody had to, if somebody won, that meant somebody else had to lose in those games. And so with alchemics, we thought, how can we make it so that we can make everybody whole again, no matter what, no matter what happens? And other than a urine hack, you know, of the vault that we're using, I don't see a scenario where anybody can actually lose money using our system. What's the long-term vision that you have for alchemics?

Where do you see yourself in five years, ten years, as part of this, like, DFI story? Are there, like, new products in that? I can imagine, like, ETH as collateral. Yeah, what's the long-term vision for you? We're targeting this month. It might slip in the next month. We're going to be launching Al-Eth. It'll work very similar to Al-U-S-D, where you deposit ETH, and you can take out an

Al-Eth loan. It might have some different parameters, like it might have a different collateralization ratio because eth yield is lower than die yield. So we don't want, you know, somebody to be in there and then have a loan, you know, be 15 years to take off or pay off. So we might increase the collateralization ratio for that one. And we're playing around some other parameters as well. But that should be out relatively soonish. And the al-Eath is, I think, is a really cool one because you can, you know, lever up on your ETH or you can even, you know, use it as a caching out method or a way to short ETH or to hedge it.

So I think it's going to open up a lot of really interesting use cases. Then after we get All-E-Th out or heads-down focused on getting our version 2 out, which will open up a multi-collateral alchemics, essentially. So there'll be, you know, for Al-U-SD, multiple stable coins that can be used as the collateral. And the cool thing is like you can like make a composite position of a lot of different stable coins in alchemics. imagine each stable coin as an ingredient and you can customize or you can make your own recipe using the different ingredients and different balances that you want to.

So if you want like a position that's 30% die, 50% USDC, 20% tether, you could do that if you want to. And then as you do that, you can see like which stable coins are offering the best yields and stuff like that. And you can construct your position that way. So that's one cool thing about version two. And the same property will also be there for Al-Eath. And we're also going to be launching Al-Bitcoin as well.

And that'll take various flavors of Bitcoin on Ethereum. And then from there is right now in Alchemics v1, we launched unaudited. And we were unsure of any security issues with economic exploits. So we'd lock down smart contracts from interacting with alchemics. So we would prevent like flash loans and things like that. some unknown stuff. Good news is that we got our audit back and everything came back really good.

No critical issues were found. So, you know, funds are safe. But going forward in Alchemics v. 2 is we're going to remove that restriction and it's going to be a lot more composable. And then we're going to be building modules on top of it. I can't get into detail about too much about those. I did say that I did leak on the bankless podcast earlier. that one of the modules is going to be for delegated credit.

So, like, when you deposit die, then you have, like, a credit of Al-USD that you can take out, you know. This new module that are going to be working on is going to allow you to then let somebody else borrow that Al-USD from you. I don't want to go into too many details about the system, but I think that's going to be something that's really powerful. We're also working on a handful of a few other modules, and the one that I am leading and design.

is Alchemics Dow. And that's going to bring a cash flow model to the ALCX tokens. And for participants in the Dow, we're going to be experimenting with conviction voting, borrowing some of the security module from AVE. So like if something happens to the protocol and we suffer a loss, ALCX takers in the Dow could get slashed and their tokens sold at auction to make the protocol hold

again. So there'll be, you know, security and insurance model baked into the Dow. And it's going to be executing code, you know, so the Dow itself. Right now we have a multi-sig community and developer multi-sig with a time lock and governance via snapshot. But the Dow itself will, you know, execute the code, unlike the semi-trusted setup we have right now. And so we're going to be borrowing heavily from the Governor Alpha contract from a compound. So we're going to be mixing all those things together to make something new. And also the goal is to gamify it and turn it into something kind of cool and unique that hasn't been done before.

So please look forward to that when it comes out after V2 later this year. Into 2022, we're going to be expanding the use cases of alchemics by adding more modules, trying to secure more integrations in Defi. the holy grail is to get an alchemics credit card where you could you know it'll take your stable coin deposits and you'll just have access to this you know line of credit that you can use for spending that actually might be in the cards i don't want to say too much now but yeah we know some people that might be able to get this uh get get it going and a lot of the members of the team are also really into um nfts and gaming and stuff like that and that's

something that I think our team, as the alchemics' platform, matures, is an area that we might start branching off into. One area that we're really excited about is flipping the model of paying for games on its head a little bit and doing a form of stake to play, where you can leverage the actual alchemic system to finance paying for games without actually having to purchase a game or, you know, having to pay for all these, like, you know, micro-transactions and stuff like. that instead you would just say hey I deposit a couple hundred die and then I get to play this game as long as I have my deposit in there instead so that's something that we're pretty excited about but that that's down the line as far as stuff like that goes

and then you know long long term goals is you know for ALUSD we we hope that we can become one of if not the top decentralized table coin out there it's sort of like a meta stable coin too in the future it will be when we have multi-collateral all usd so it'll be like a composite of all the stable coins right now we have around 300 and 330 million a lot oasis out there i think it would be really cool if we can get over a billion um so that's uh you know one of our goals is to get over a billion dollars of alusd out there uh if not more that could be cool if we could take um maker dow as the top decentralized stable coin that would be really cool i don't know if we can get that far, but, you know, that would be cool.

And what do you see as some of the biggest risks facing you guys, especially from, you know, what can competition do as well? Like, what happens if Maker says, hey, we're going to start taking Y assets?

So, like, you know, like a derivative of what, of a urine deposit and like, accept that as collateral. How does that change the dynamics of the alchemic system? Yeah, we're already starting to see that a little bit. I know Cream was playing around with the idea of allowing why assets as collateral. I think unit protocol is also playing around with that as well. But they still would be different from alchemics because when you borrow their stable coins, you're still getting charged interest. Like if I borrow USDP, I'm going to be getting charged 12%. If I borrow Dye, I think it's something like 5 or 6% right now. I'm not entirely sure. Whereas with us, you're not going to have to pay interest on the alias. is deep. Instead, your collateral is going to be paying off that debt over time. So I think that's

something unique for alchemics and the way that we constructed our system that other people, you know, they would either have to clone us to replicate it for their own apps. But isn't this interest important in these systems because it's what helps bring the price back to a peg? And it's like, or because if people, like, Like, you know, you want to like kind of incentivize people to pay off their debt. And like having this interest is kind of what does that. Without requiring people to pay off their debt and like have an interest, how do you kind of get people to want to pay off their debt?

Yeah. So if LUSD is off the peg and it's cheaper, you know, you know, let's say like you borrowed it at one point and you sold it for a dollar. And then later on it's like 97 cents. You could be like, hey, I'm going to, you know, buy this Al U.S.D. off the market because it's at a discount right now and I can pay off my debt for cheap, like for cheaper than I would have been able to otherwise. So that is a paying module or a mechanism right there.

And then it's just like, you know, arbitrage to the transmitter is the other aspect right there that helps balance the peg out. And the fact that like, you know, instead of like people paying 12% you know for interest, you know, we're having that 12% paid by yearn. essentially. And then that's going into the transmitter. So that that's, the transmitter, the money in there is sort of like this buffer that says like, hey, if, you know, the peg is, is, you know, you know, at risk, then people are going to go into transmitter and then, you know, use that as the method to, you know, convert their

LSD or that they're going to arbit it from the curve pool and stuff like that and make money off of it. And those, those together, they all, you know, so far everything seems to be indicating that those mechanisms are working to maintain the peg for it. I think one of the other things that makes dye peg so strong and SUSD always have a premium is the fact that they are in-demand assets and DFI, whether that's through yield farming or using them as assets and other things and other protocols. I think that's what is driving the high price for, you know, the premium for die and the premium for SOSD is the fact that they're useful and they're used everywhere. And I think if we can get that going for LUSD, then, you know, we'll have, we'll take care

at the demand side of it even stronger. So is this going to be enough to incentivize and keep the peg strong long term? I am leaning towards yes, but I guess we won't really know until the bear market hits and we'll see what happens to the yields on chains. Like my worry is if yields go up like under 5%. I think we would still be fine at around 5%, but under 5% is where I might start to worry about the effectiveness of the system

and the safety of it. Not the safety, but more the stability of it. But I think if we take care of the demand side, then all the other fears about depagging are going to be diminished significantly. Doesn't this also create like a free, you can leverage

on like your yearn yields. So like, because if, let's say I take it, I take my dye, put it in Alchemix, borrow 50% of Al-U-SD. But now if the Al-U-SD is trading at one-to-one with die, I could go trade that for more dye, put that in Al-Qa-Mix again, and take out Al-U-S-D, and then I can keep doing this process again and again. And I'm essentially going to be earning, I basically got a free 2x leverage on my die.

and this means I just doubled my yearn earnings, right? Yes, so that would mean the same thing, yes. You can lever up to 2x. The efficiency gets down every single step. Imagine that you start at 100 and you're trying to get up to 200. So your next step is 150. Then from 150 can go to 175. Then you can go to 187 and then, you know, there.

So like, you know, it depends on your size. and how efficient that's going to be. But yes, that is something you can do. That's also why we have a 200% collateralization ratio. If it were any less than this recursive, you know, borrowing strategy could easily go up to like 5, 6, 7, 8x. And that would be, you know, I think unfair for other users in the system because essentially they would be taking yield from other people, if that makes sense. How does the equilibrium of this work out? Is the rational thing for everyone to do is that everyone should be doing this, right?

And then what happens if everyone does this? Does the yearn earnings per die just half? What's the equilibrium of this scenario? It seems like it's something that everyone should be doing by default. In fact, yearn itself should be doing this, right? I disagree with that. I don't think everyone should be doing that by default. But anyway, let me get to that.

So if like the urine vault, I think what makes them special and different from other yield aggregators is that they're scalable because they can add any arbitrary amount of strategies to their vault. And that allows it so like, you know, no one yield provider gets overwhelmed by urine's TVL coming into it. And, you know, we've seen like when we first started, the YV die vault had like, I think like 20 or 30 million in it. and now it has over 600 million in it, and yet the yields have still held up very, very, very well. And I attribute urine, brilliance, and engineering, and their strategist for making that happen. So I don't think the yields from urine would collapse in that scenario,

but what would happen is the yields in alchemics would go down because right now we have the transmitter in the dye that that's holding, and the yield that that's passing on to it. And right now, there's about, you know, a similar amount of dye in the transmitter that's in the Alchemist vaults. And because of that, it's basically doubling urine APY because we have like twice the amount of principle.

And if a lot of people were doing this recurrentive leverage strategy, then it would throw that balance out and make it a little bit more heavier towards the vault side instead of the transmitter side. And because of that, that would lower the relative amount of principle that the transmitter has in relation to the vault, which would lower yields for everybody in the system.

But it wouldn't lower the income of the system. In fact, that would probably go up if there was more in the, you know, more aggregate dye in the system. And, you know, that that die that they're borrowing and that they're leveraging and everything like that, that's still locked as collateral. So that's going to be sending yield to the transmitter this whole while and everything like that. that should work out. As long as the collateralization ratio isn't too low, then I don't think this recursive strategy is damaging to the system.

But if everyone were to do it, it could have some unintended consequences and maybe destabilize the peg temporarily at times, in my opinion. I think long term it might actually be healthier for the peg because that means there's more die locked in the system and more guaranteed yield coming into it. So it's not quite a neutral thing. It's slightly negative, but not that negative for people to be using the strategy, in my opinion.

And I also think that, like, you know, speculating on alt coins, you know, or trying to farm in other stable coins using the stuff that you borrow is also, you know, really popular and viable strategy. So I don't see a lot of people doing the recursive strategy. One question I had was about community. Obviously, having a token, ALCX token so quickly, kind of community is one of the most important things for alchemics long-term success. How do you think about attracting a community, keeping people very engaged? And you've mentioned the team a few times.

How do you see like the team as distinct from the community? and what's your long-term plans for decentralization and governance for alchemics? So we love our community. We have a Discord and we try to make our Discord a lightly moderated place so people can have fun and they can, you know, chip post and enjoy in there. And we have lots of funny and silly emojis in there that people use and stuff like that. So our community is really good. We have a community manager, Gorby, who set up our Discord. and we engage with them like daily.

I get in there, answer questions, and post along with everyone else. We actually even have a sub-community that was created inside of Alchemics. They're called the Yunts. And they just theorize, like, all this D-Gen stuff that you can do with alchemics and other apps in connection with alchemics and stuff like that.

And they just do that they post about it in a D-Gen channel in our Discord. One way that we engage them is, that, you know, like us in the core team, like, we might come up with like a plan or an outline of some things that we're going to do or some changes that we make. But then we'll go to the community in our Discord and our forum and we'll ask for comments. And then, you know, we'll launch into a big debate and then we'll try to find consensus among everybody. And then, you know, once we have some good options or we have consensus, we'll take it to the snapshot to make it official. and then we'll execute, you know, in accordance with the community's wishes at that time. It's a little bit centralized, but I think we're doing a pretty good job of involving our community

and keeping them in the loop and keeping them involved with, you know, making decisions. And I think that's good for, you know, getting them involved in keeping them sticky in our community. Occasionally I'll go in there and we have a tip bot and I'll make it rain if I'm feeling generous. especially like if somebody's contributing, if I notice somebody has been like in our support channel and like, you know, been helping out a bunch of newcomers. Like, you know, I'll throw them a tip

or somebody makes a really dank meme. I'll throw them a tip. Things like that. And I think stuff like that and people seeing like just like kind of random acts of generosity inspire other people to do that. So like what I've seen now is like people I've tipped for their work in the protocol are now tipping other people. So it's like this sort of like generous or this virtuous cycle going on.

And I think that's helping our community a lot. going forward for alchemics and how we're going to decentralize is later this year we're going to be launching alchemics Dow, and that's going to basically remove the dev stranglehold on power. So we're going to ditch the multi-sig, you know, in snapshot format, and it's going to go straight to like on-chain governance and everything like that. And at that point, anything we want to do, like we're not going to be able to force anything. Everything's going to have to go through the Dow for better or worse. And we're going to go into that.

Now we're still like in our early phase and our growth phase. And I think having the multi-sigant time lock and the flexibility of that is better. It allows us to move a little bit faster and, you know, conduct deals and things like that and help us get started. But we're planning to grow up and get our community becoming the owners of the protocol itself. And the Dow, hopefully the Dowel designing is going to be highly engaging and get everybody in there and active and give them reason to be active. as well. And so tell us a bit about your exiting news. Oh, God, man, I'm a typo machine.

Stop that. My exiting views, what I'm excited about, or what I'm exiting about? Yeah, just curious to learn about, like, you know, what, so, you know, you guys did a raise after sort of the launch of the token and protocol and stuff. So, you know, really interested to learn about, like, how that process goes and, like, you know, It is, you know, most teams tend to usually do, like, raise money from investors pre-launch of a token. So how, how did that process differ, especially when, you know, you guys are also like, you know, mostly anon and stuff? And so what was the fund, what was this like very unique fundraising process like?

Yeah, so this all started because before we launched alchemics, I needed to have like a job done to help us get the everything ready before launch. And so I contracted another developer and said, hey, can you get this done for me? It's urgent and it's a little bit beyond my skill level. And I said, sure, it's like, yeah. And I told him at the time, back when, before we launched, when I thought a price of an ALCX token was like 15 bucks, yeah, I'll pay 100 ALCX to get this job done. And then after we launched, we mooned. And at the time, I sent this guy his 100 ALCX. ALCX was worth, I think, like $800.

So what I thought was going to be like a $1,500 payment turned into like an $80,000 payment. And then the guy I sent it to, he cashed it out, like, immediately and sold it for, I think, ETH. And then people were monitoring the dev wallets and were like, the devs are rugging, the devs are rugging. And I'm like, no, no, I just promised somebody a payment before we launched. And I'm just making good on my word. And because of that, we realized that we were like under a microscope. Every single thing that we were doing, any movement of our funds, everything was going to be heavily scrutinized. And we thought, like, if we're going to, you know, like a lot of our team was still working a day job at the time.

We had been developing this in our spare time since, you know, midsummer. So for the team to quit their day jobs, they'd have to cash out some ALCX in order to have enough funds to, you know, support them in their families and stuff. and seeing the reaction to the market and the community when, you know, I sent those tokens to the other dev who cashed them out and they thought that we were rugging. I was like, we have to, we have to find a different way. Luckily, I'm in Eagle Capital and they were one of our, like, they contributed to our initial liquidity pool on Sushi Swap. And there's, they have a lot of people in there that are traders and developers and are really, really well connected into the ecosystem. And I asked them, is like, hey, do you think you could help us try to find some OTC partners? Because we thought if we went OTC, you know, we wouldn't have these problems with people freaking out,

thinking that we were rugging and stuff like that and dumping on sushi. So they hooked us up with a number of players in the space that were all interested in getting ALCX anyway. And we struck out a deal. At the time, the price of ALCX was like $750 or $800. And we, you know, we settled on a price of $700 for the OTC. So overall, pretty good. The investors, they got in a slight discount and we didn't, you know, dump the market. So I think it was a pretty good win-win situation.

And those funds allowed the team to, you know, quit their day jobs completely. So, and go full time. So that was really important for us. And then during those negotiations, some other investors jumped in and said, hey, we'd also like to lead a strategic round. with alchemics. And so we work out a deal with them. And that was using the Dow's funds itself. So that ceded our Dow with over $3 million of capital. So it's giving us a lot of flexibility for paying for audits and other expenses that are coming up as well. Between those two deals,

you know, the team is taken care of and the protocol is in good shape going forward. I think if our app wasn't compelling and novel and something new, we probably would not have ever been offered this, these deals. So I think that that's, you know, is very flattering and very nice, you know, for our protocol that they would consider to invest in anonymous devs. I also think that maybe because I have a little bit of cloud reputation in the space and I'm connected to, you know, people like e-girl capital, that that also probably made investors a little bit more comfortable investing with us. So, you know, I don't know if other Anons could pull this off. They might not be as, you know, as connected as Scoopy Truples. Can you tell us a little bit about what E-Girl Capital is? Yeah, we're a, it's just a group of Anons and people who, we have a couple of docs members as well.

And so we are, like, we together, we form, like, we're all our own individual. LPs. And together we, we form our own little kind of like ad hoc decentralized VC, not really decentralized. We're not in a Dow or anything like that per se. But we try to find ecosystem projects that are interesting to us that are cool. We're not just like there to, you know, invest in things and flip it and take profits and stuff like that. But we want to find projects that we think are cool that moves the space forward. And then we pull our funds together and we invest. And so far, we've done radical alchemics, unisox. That was more of a liquid token investment. And arbitram and yet. Yes. So those are the investments that we have as e-girl right now.

We've actually turned down a lot of things because we wanted to kind of distinguish ourselves as people, you know, who are more allies of the ecosystem instead of people are just out there to, you know, make a quick buck and flip tokens and stuff like that. That's a very eclectic set of investments, but I guess it fits for a very eclectic set of LPs. It's very, very

eclectic. Like the e-girl chat is just a really wild and random place where we go from talking to DFI to talking to women and girls and then we talk about and then we talk about like DGEN's trading and then you know, Insider News

like all. sorts of stuff just gets talked about there. And it's like, you know, because there's a few devs in there. There's myself included. We have professional traders, people, you know, like CL, you know, and Jeff Wang. And we also have just like D-5 power users, like D-Gen Spartan is in there as well. So, like, it's just a very good eclectic mix. We actually have some girls in E-Girl. Shout out to Ava Baylon. She's really, you know, helped us organize and turn it into reality. Before her, we were just e-girls and now we are e- queens. So it's a really fun place. It's really cool. It's exciting. And it's definitely been something that's, you know, helped alchemics because, you know, they've been able to connect us with

a lot of good people that have helped us as well. Yeah. And I think we're coming up to near the end of our time. So is any, you know, I guess you already talked a little bit about the future of alchemics, but is there anything else you want to? want, you know, the listeners to know about and what's coming up next for alchemics? Yeah, so there's actually a lot of stuff coming up right now. Our audit just got back. We're just sending it back to our auditor real quick to get it finalized and everything like that.

Everything came back looking good. And that's going to give us the green light to get on to curve.5. Also getting insurance options for alchemics. So those are some developments that are going to come in sometime over. the next week or so. And then shortly thereafter, we're going to be launching Al-Eath. So, you know,

towards the end of May, there's going to be a decent amount of stuff going on with alchemics. Then we'll probably have a little bit of a quiet period as we are going heads down on getting V2 ready for launch. You know, sometime towards the end of July or early August

is what we're aiming for. So, yeah, that's the next few months of alchemics right there. If there's any more developments, we'll be sure to tweet them very loudly from our Twitter. Yeah, thanks so much, Scoopy. How can users get started if they want to interact with Alchemics? Yeah, so you can go to Alchemics.5. That's our homepage.

There's links to the app there. And, you know, the app is, I think, pretty straightforward to use. There's tutorial videos linked on the website itself. And if that's too hard, then find us on Discord and get involved or ask questions on there. and, you know, there'll be plenty of people there willing to help you out. All right. Cool. Thanks so much. Thank you for joining us on this week's episode. We release new episodes every week.

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