The Alchemix machine, step by step

The Alchemist tracks the position, not just the wallet

The Alchemist is the accounting layer behind a loan. It records collateral and debt and handles the rules governing borrowing and settlement. The synthetic tokens in your wallet are only one part of that picture. Moving or selling those tokens does not automatically settle the debt recorded against your collateral. A complete position review therefore includes both wallet balances and the loan balances shown in the app.

Understanding the accounting also prevents a common mistake: treating a smaller wallet token balance as a smaller loan. If tokens were sold, their proceeds may have been spent while the original debt remains. Follow the position-management checklist to separate a successful token transfer from a successful repayment.

MYT is a claim on pooled yield-bearing collateral

A Mix-Yield Token represents a share of a pooled yield vault rather than an untouched deposit sitting idle. The strategies behind that vault influence earnings, valuation and possible losses. Knowing the deposited asset is important, but is not enough to understand the exposure: you also need to inspect the strategies used by the selected market and the conditions for exiting them.

Yield can increase the value of collateral represented by MYT. Fees and strategy losses can affect that evolution. The displayed return should be read with its measurement period and fee treatment in mind. This guide intentionally does not promise a stable APY or assume every market has the same strategy composition. The strategy-risk overview explains why pooled collateral requires ongoing attention.

Minting creates debt; selling creates liquidity

Borrowing issues an alAsset against the position. Receiving that token and converting it into something you can spend are separate events. The token has a denomination within the protocol, but its exchange quote depends on the market. Fees, available liquidity and price impact can change the final amount received. Check the minimum proceeds shown for the transaction rather than assuming the nominal amount borrowed equals cash in hand.

The same distinction is important when repaying. The asset accepted for settlement depends on the debt and its earmarked portion. Before signing, inspect which balance is being reduced and which asset is being transferred. Our alAsset pricing guide explains the relationship between protocol denomination, exchange price and redemption.

The Transmuter links redemption to debt cancellation

The Transmuter provides a redemption mechanism with a term, rather than an unconditional instant swap at face value. From a borrower's perspective, scheduled redemptions cancel corresponding debt while taking value from collateral. From a token holder's perspective, a redemption position introduces maturity, early-exit and payout conditions. These are connected mechanisms, but the two users should not confuse their respective balances and obligations.

Yield and redemption may occur during the same interval, yet their accounting effects differ. Yield can add collateral value; redemption removes collateral and debt. The worked repayment article separates those effects so an illustration is not mistaken for a fixed repayment forecast. Consult the official Transmuter documentation for maturity and bad-debt conditions.

Questions about the loan cycle

Why can debt fall while collateral also falls?

Because the repayment can use value already held as collateral. This is not evidence that the mechanism failed; it is part of the documented v3 design. What matters economically is the combination of remaining balances, net yield, costs and any value already withdrawn or spent.

Does a diagram show the current repayment schedule?

No. The chart above is a labeled yield-only illustration, not a schedule for your position. Actual redemption terms and participation must be checked in the app. For terminology and version differences, read the Alchemix v3 beginner's guide.