alUSD and alETH Explained: Pricing, Collateral and v3 Redemptions

alUSD and alETH are Alchemix synthetic assets, also called alAssets. The v3 documentation describes USDC backing alUSD and ETH backing alETH. These are like-kind debt units: alUSD represents dollar-denominated debt, whereas alETH represents ETH-denominated debt. A token's face value inside the protocol is distinct from its exchange price.

Supported deposits are version-specific

The official integrator FAQ states that v3 accepts ETH and USDC. Do not treat an older list including DAI, USDT, wstETH or rETH as confirmation of current direct deposit support. MYT may have exposure to underlying strategies, but a strategy asset is not automatically an asset users can deposit directly. Base is described separately as a USDC-only market with alUSDb; verify market availability in the app.

Face value versus cash received

Suppose you mint 5,000 alUSD and receive a hypothetical exchange quote of $0.98 per token. The gross sale value is $4,900. At a hypothetical 0.3% trading fee, that becomes $4,885.30 before gas and any extra price impact. The protocol debt remains 5,000 alUSD; selling below the target does not reduce what you owe. Conversely, exchange quotes above target are not guaranteed arbitrage profits.

The same distinction applies to alETH. Selling 1 alETH at a hypothetical 0.97 ETH exchange rate produces 0.97 ETH before costs, while the debt remains 1 alETH. Both examples are invented prices for education, not current quotes. For the effect of a loan redemption on collateral, see the worked repayment examples.

How the v3 Transmuter works

The official Transmuter documentation describes a fixed-duration position with a known maturity date. Redemption targets a 1:1 rate after the applicable waiting period. That term is set per asset and chain and can change; this guide deliberately does not invent a universal number of days.

Redemption is not the same as an immediate cash withdrawal. Payouts can be scaled down when the Alchemist has bad debt. The documentation also describes early exits that pay the vested share in MYT and return the unvested share as alAssets minus an early-exit fee. Consult the chain-specific fee schedule and the app's transaction preview before committing.

A simplified early-exit example

Assume a 1,000-token position is halfway through its term, linear vesting applies, and the applicable early-exit fee is a hypothetical 1% on the unvested share. Ignoring bad debt and other costs, 500 face-value units are vested; the other 500 return as 495 alAssets after a 5-token fee. This illustration explains the split, not a guaranteed payout or live term.

Practical implications

If you need immediate liquidity, compare the net exchange quote with the waiting period and redemption risks. Liquidity provision adds pool-specific risks and should not be described as safe interest. Read the depeg and strategy-risk guide before buying an alAsset just because it trades at a discount. Our asset overview summarizes denominations, while the lending comparison explains why synthetic liquidity differs from borrowing an existing token.

Compare executable liquidity, not just a reference price

A market reference price may describe a small trade or an aggregate estimate. Your actual quote depends on the amount, route and available liquidity. Check the minimum received value as well as the quoted value, and consider whether additional approvals or transactions add costs. A larger trade need not receive the same average price as a smaller one.

Price impact and a change in market price are related but distinct. A trade can move the price because it consumes liquidity; the market can also move before execution. A tolerance setting does not guarantee that the asset is worth its target value. It governs acceptable execution conditions for that transaction, so it should be understood in the context of the actual quote.

The cost of waiting is part of a redemption decision

A redemption term creates a time commitment. Even if the target payout looks attractive relative to an exchange quote, the holder may need funds before maturity. Review the applicable early-exit rules and payout risks before assuming that waiting is always the better choice. The term belongs to the selected redemption position; this guide does not substitute a universal waiting period.

Compare like-for-like outcomes: what you can receive now after exchange costs, versus what the documented redemption conditions may provide later. Do not describe the difference as guaranteed profit. Bad debt, fees and a change in your liquidity needs can all affect the usefulness of the later outcome. The official redemption explanation is the source for those conditions.

Token ownership is different from having a loan position

A buyer can hold alUSD or alETH without having opened the collateral position that originally minted it. That buyer should focus on token liquidity, denomination and redemption conditions. The original borrower still needs to manage the debt recorded by the protocol. Moving tokens between holders does not mean the corresponding borrowing obligation automatically follows them.

This is why a wallet balance alone cannot tell you whether a loan has been settled. A borrower should inspect the position after repayment, while a token holder should inspect the outcome of the intended exchange or redemption. The transaction verification checklist helps separate those results. For the collateral accounting behind minting and settlement, read how the protocol components fit together.