Alchemix vs MakerDAO

Two collateralised debt position designs, compared

MakerDAO — now operating under the Sky rebrand for parts of its ecosystem — pioneered the collateralised debt position model in DeFi: a user locks approved collateral into a vault and mints DAI against it, up to a required minimum collateralisation ratio, and pays an ongoing stability fee that behaves like interest on the outstanding DAI debt. Alchemix borrows the vault structure conceptually but changes what is minted and how repayment works: instead of minting an independent stablecoin backed broadly by the system, Alchemix mints a synthetic version of the exact collateral deposited, and repayment comes from yield rather than a fee schedule.

Both models solve the same underlying goal — turning locked collateral into spendable liquidity without an outright sale — but they differ sharply in what the borrower owes and how that obligation is expected to resolve over time.

Fees and repayment: stability fee versus self-repayment

A MakerDAO vault accrues a stability fee on outstanding DAI debt, and the borrower is responsible for eventually repaying the principal plus that accrued fee to reclaim the locked collateral. The fee rate is set through governance and can change, directly affecting the ongoing cost of holding the position open.

Alchemix charges no equivalent fee. The debt figure only moves downward, driven by yield generated from the deposited collateral, and the borrower is never billed an accruing cost for keeping the position open. The trade-off is that Alchemix's minted asset tracks the specific collateral deposited rather than being a single unified stablecoin usable identically regardless of which collateral backed it.

• MakerDAO: mints DAI, a unified stablecoin, against various approved collateral
• Alchemix: mints a synthetic of the specific collateral deposited (alUSD, alETH)
• MakerDAO: ongoing stability fee accrues on outstanding debt
• Alchemix: no fee; yield from collateral repays debt automatically

Liquidation mechanics in MakerDAO versus Alchemix

A MakerDAO vault is liquidated if its collateralisation ratio falls below the required minimum, which happens when the market price of the locked collateral falls relative to the fixed-value DAI debt. This is a well-established, price-driven liquidation model similar in spirit to most overcollateralised lending markets, and it requires borrowers to actively manage their ratio during volatile periods.

Alchemix does not expose users to this same mechanism because its debt is denominated in a synthetic of the deposited collateral rather than in an independently valued stablecoin, so collateral and debt move together rather than apart. Alchemix positions remain exposed to smart contract and yield strategy risk, which is a different category of exposure than MakerDAO's price-driven liquidation.

Choosing between MakerDAO's DAI and Alchemix's alAssets

MakerDAO's DAI is a broadly used, unified stablecoin accepted across a very wide range of DeFi applications, and minting it gives a borrower a highly liquid, fungible asset regardless of which collateral backed the mint. That universality, combined with deep integration across the ecosystem, is MakerDAO's core strength.

Alchemix's alUSD and alETH are more specialised: useful in their own right and integrated in a smaller set of venues, but tied conceptually to the specific collateral that backed them. A user prioritising the widest possible downstream use of a minted stablecoin may lean toward MakerDAO, while a user prioritising a loan that requires no ongoing fee management and repays itself may lean toward Alchemix.