Transmuter: Fixed-Duration Redemptions
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.
How Transmutations Flow​
| Flow | Context |
|---|---|
| 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. |
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 |
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 tramsmuter 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.