The Transmuter lets you redeem alAssets (alUSD, alETH) 1:1 for their underlying asset after a known waiting period. Purchase below face value, and receive the full value on the maturity date.
The Transmuter guarantees a 1:1 exchange rate (no slippage) but works over time as redemptions mature.
- Want it now? Use external liquidity pools (Curve, Balancer) which are instant but may have slight price slippage.
- Want 1:1 value? Deposit into the Transmuter and wait for redemptions to clear over a fixed period to fill your order.
How transmutations flow
- Deposit – Send alUSD or alETH to the Transmuter contract.
- Queue – Each deposit matures after the Transmutation Time set by the DAO. You can exit early, but an early-withdrawal fee applies and you give up a portion of the fixed-rate outcome.
- Earmark – The protocol reserves an equal value of MYT from borrower collateral to guarantee your claim.
- Maturity – You receive 1 asset-worth of MYT from borrowers for every 1 alAsset deposited.
All redeemed alAssets are burned, contracting their supply.
Why discounts exist
Borrowers often sell newly minted alAssets for working capital, pushing market price slightly below par. The spread between that market price and the Transmuter’s guaranteed 1:1 accounting creates a fixed-rate opportunity for buyers.
Inside Alchemix, 1 alUSD always offsets 1 USD worth of debt, regardless of its external market price.
Fixed-rate yield example
Market: alUSD = 0.96USDC
Term: 90 days
| Action | Outcome |
|---|---|
| Buy alUSD | Spend 10,000 USDC → receive ~10,416 alUSD |
| Deposit into Transmuter | Locks the 10,416 alUSD for 90 days. |
| At maturity | Receive 10,416 USDC (via MYT) |
| Profit | 416 USDC = 4.16% in 3 mo = ~16.6% APR |
The Transmuter has a maximum deposit cap based on the total alAssets minted on its specific chain. If a Transmuter is full, you may need to bridge alAssets to another chain to deposit.
Always verify available Transmuter capacity on your target chain before purchasing alAssets.
Edge-case handling
| Scenario | Result | Your Options |
|---|---|---|
| Bad debt in Alchemist (exploit, etc) | Redemption pays pro-rata (EG: 0.97:1) until debt is restored. | Claim now and take a haircut, or leave unclaimed. Once debt clears, you may redeem full 1:1. |
| MYT unwrap slippage | In some scenarios MYT may not be able to be immediately unwrapped for the underlying. (EG: UI detects high slippage). | Withdraw MYT from transmuter to begin earning yield from it, manually unwrap later facilitated directly by UI. |
There is no variable interest and no price-based liquidation affecting Transmuter positions.
Strategic uses
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Arbitrage & peg maintenance – capture fixed yield while pulling alAssets back to parity.
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LP protection – LPs can move alAssets from liquidity pools into the Transmuter to erase impermanent loss if the peg widens.
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Treasury management – DAOs can park stable reserves for a known return without rate risk.
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Diversified yield stacking – pair Transmuter returns with base vault yield for stacked APR.