OMG v3 is finally happening. Please read the article that explains it in detail.
Gonna add some extra lore here too.
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Preamble:
Launching in 2021, Alchemix found a niche among DeFi enthusiasts, becoming a favorite of many due to its novel composition of various DeFi building blocks, and ever since inspiring countless other protocols to do more with yield.
But the system had its flaws.
Namely, the flaws were centered around the peg stability mechanisms that ultimately limited the scale of the protocol.
Why?
Redemptions were unpredictable in length, often being too long for arbitrageurs to tightly peg our synths.
We had to come up with patchwork systems to make the system work. Things that were essential, but really didn't satisfy me.
One of them was limiting deposit caps (and hence debt minting) so that our LPs wouldn't take on more IL from imbalanced DEX markets.
The other major patchwork was employing Algorithmic Marker Operators (AMOs), pioneered by @fraxfinance. This helped us subsidize the ongoing costs of supporting our LPs and to provide liquidity, but again, it limited growth of the protocol.
Necessary to survive but not ideal.
Initially, we greatly benefited by the surge of DeFi summer to the point where we thought our model would work in any condition. Then Luna and FTX and the prolonged DeFi bear market ensued, and we realized that our model had reached its scaling limit. We had to evolve.
So we researched, HARD.
We developed several new models, making prototypes and simulations for them, and none of them were really good enough for my liking.
Then in a team white boarding session at ETH Denver 2024, we had a breakthrough.
Suddenly all the pieces fell into place. Every problem had a solution. Every awkward system was replaced by something elegant. The simulations were beautiful. I was not only satisfied with the model, but I was excited and eager to get it developed, shipped, and use it!
But development was not easy, at all!
There were some extremely hard computer science problems we had to solve. As any dapp dev knows, the EVM is extremely limited and executing code on it is expensive as fuck. We needed hyper efficient code and data structures.
So we basically had to be pioneers and do never-done-on-the-evm-before kind of stuff, using some esoteric moon math to get the job done.
NASA would be proud.
Most of the development stuff is done. We have gone through a couple audits, and now we are working on the final touches to ensure that we can provide competitive DeFi yields for the protocol. Getting that done and one final audit competition is all that is left for launch.
So enough preamble, I will give yall a brief TLDR here for the lazy, but please do check out the introduction article that explains the system in much greater detail.
(in case you didn't read the QT thread)
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TLDR:
-High LTV (~90%)
-Zero interest
-Minimal fees on generated yield and redeemed debt
-Fixed duration redemptions (likely between 1-3 months).
-An innovative time-weighted redemption system
-A unified yield token for best yield and simple UX
-A new fixed interest primitive
Overall, we designed v3 with fairness for all participants and scalability as our top priorities. Under almost every condition in our simulations, the system was positive sum for each kind of participant in the system.
And as such, we want everyone to "make it"
There is a lot new to this system and some stuff for even the most battle hardened DeFi soldiers to wrap their heads around.
As we approach our launch date (TBD), we will share more educational materials that will help you become a master yieldmancer.
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