The Wedding Payoooor
Self-Repaying Love with Alchemix
In our quest to report on everyday uses for Alchemix self-repaying loans, we couldn’t help but notice the number of people in the Alchemix Discord and on Twitter who mentioned that they were taking loans to pay for wedding-related expenses.
In this publication, we’ll hear from three people who have used Alchemix to cover the increasingly considerable costs that are associated with getting married, all whilst maintaining exposure to yield-producing strategies via their deposited collateral.
Pattyboo.eth and Kieranpm.eth explain how they have used Alchemix to finance their engagement rings, and peanutbutter reveals how he and his future wife will be enjoying a self-repaying European honeymoon after their forthcoming wedding.
How a story of a boat led me to use Alchemix to buy an engagement ring.
For the past year, I’ve been following Ryan and David on Bankless, and I kept noticing the Alchemix ads promoting self-repaying loans without forced liquidations. I was intrigued by it, but couldn’t figure out how it worked. Then I saw the famous Self-Repaying Boat by Defi Donut, and things started to click for me. I also heard Scoopy on Bankless and The Defiant. This got my attention and I wanted to find out more.
It just so happened that I was starting to think about proposing to my girlfriend. I’d found the ring that I wanted to buy, and I had enough for it, but it was still a very large single expense and I kept thinking that there had to be a smarter way to do it. Suddenly the line from the Alchemix ad popped into my head: “Spend and save at the same time”.
A while earlier I had read about the Bankless “Never Sell Plan”. The TLDR is:
Stake ETH in RocketPool for rETH (or just acquire rETH).
Deposit rETH into MakerDAO.
Borrow DAI against rETH.
Deposit DAI into Alchemix.
Borrow alUSD from Alchemix.
Sell alUSD for USDC, send to Bank
When I did the math on how much stETH I would need to deposit into Maker for DAI, I realized that I would need more time and money before it was a feasible strategy, and there was of course the risk of liquidation from borrowing DAI against an stETH position. So I decided to skip the Maker leg of the strategy, and just deposit DAI into Alchemix.
Because of the 50% LTV on Alchemix I did have to save up a bit more to have enough DAI to allow me to borrow back for the cost of the ring. It took me a little while, but I got there in the end and took a $15k loan in alUSD. It was swapped for USDC and then taken off-chain so I could pay for it. I’ve now got the ring all figured out, and my $30k DAI is still parked in Alchemix earning yield. That was the easy part - now I just need to figure out how to pop the question…
Thanks Alchemix for our self-repaying engagement ring!
The last few years have been pretty challenging for us. My girlfriend (now fiancée) had been made redundant shortly into COVID, and I had set up a recruitment business in the emerging blockchain space with two partners right before the pandemic hit. Spoiler alert: it didn't work out.
I had been thinking about proposing for a while, and started planning for it to happen around the end of 2020. We were both worn out by the experience of living through a harsh lockdown, so I wanted us to get away from the UK for a while so I could propose against a new backdrop, without all the reminders of the pandemic. The pandemic had other ideas, and yet another lockdown resulted in my plans being canceled.
I was set on the idea of proposing atop a snow-covered mountain during a ski trip, as we both love skiing and being in the mountains and nature, and she had fond memories of being a ski instructor in a previous job. I kept looking for opportunities to plan another trip, but unfortunately luck was not on our side - every time I made plans, a new restriction/lockdown/variant of the virus would come out and derail my plans! As the pandemic dragged on it was looking less and less likely that I’d be able to pull it off.
In the meantime, we were burning through a lot of our savings just trying to survive. I managed to get a new role during COVID, then another, and it got to the point where I was resigned to just buying the ring and waiting for the right moment. Because we’d run our savings down so much, I wasn't sure how I was going to pull the funds for the ring together - we were only just starting to get our heads above water again! I listened to the Bankless DeFi 2.0 Summit on a flight back from a work trip, where Scoopy Trooples from Alchemix was one of the participants. This sparked an idea - why don't I use some DAI that I already have and finance a portion of the engagement ring?1 That way I’d be able to continue to earn yield with the underlying collateral, and would always have the option of self-liquidating if I needed the rest of the money later.
I’m sure that I’m not the only blockchain user who’s excited by the possibilities of DeFi. Cryptocurrencies and DeFi are often criticized for a perceived lack of real-world applications, so I also loved that I’d be able to demonstrate their potential. So, a decision was made. I deposited my DAI into Alchemix, took a 50% loan in alUSD, swapped that for USDC, and took it off-chain to buy the ring. 100% of my DAI collateral is now parked in Alchemix earning interest that automatically repays the loan, and meanwhile I was able to buy an engagement ring and proceed with my plans!
Even though it was still difficult to book travel with the unpredictability of COVID, I was fixated on the idea of proposing in the snow on top of a mountain. A travel window finally emerged and I managed to book a trip around the Christmas and New Year holidays, with only 4 days notice! My now-fiancée knows how terrible I am at organization, so she didn’t suspect a thing and had no idea what I was planning. I had her crypto-financed ring burning a hole in my pocket as we were out on the slopes, waiting for the right spot to pop the question. Finally, after a difficult few years and many setbacks, I was able to propose under clear skies and sunshine at the top of a mountain on New Year’s Eve…and she said yes!
She is quite amazing and deserved a great moment, and I am really satisfied that it all worked out.
My fiancée and I will be getting married in July of 2022. We will both have a rare opportunity for some extended time off from work in the couple of months after our wedding, so we wanted to have a memorable honeymoon. We've decided to spend almost a month in Europe! The trip we've chosen will take us through the Netherlands, Germany, Austria, Switzerland, Italy and France - very exciting! We are fortunate to be in the financial position that makes an incredible trip like this possible, but we also wanted to do it in an intelligent way.
Since a large chunk of our savings will be invested in this trip, I wanted to allow that money to continue to earn yield while we were seeing Europe. So, my fiancée and I decided to take an Alchemix loan. My fiancée is not involved with cryptocurrencies or blockchains, but she is supportive of my hobby. She gave me a requirement that any money I invested to be safe and readily accessible if we needed it. For this reason, I decided to stick to methods with absolutely minimal friction between blockchains and my bank account.
I typically use the Gemini and Coinbase exchanges, so USDC was a natural choice that limited the number of necessary swaps. I had anxiously awaited the launch of the V2 vaults for weeks, and soon after they went live I was one of the very first deposits into the USDC vault. I deposited roughly twice what I expected the honeymoon to cost. While waiting for our honeymoon to begin I also wanted to earn a yield on the loan that I could take. I wanted to spread risk as much as possible, so I took a full loan of 50% alUSD and swapped this for Gemini USD (GUSD) to take advantage of Gemini Earn, which at the time offered more than 8% APY on GUSD (now down to 6.9% APY at time of writing). Though I am a big fan of decentralization, I felt this was a reasonable compromise to keep part of our money relatively close to our bank account in case we needed it.
To me, Alchemix v2 demonstrates a new financial primitive which was previously impossible or infeasible in traditional finance. I'm a big fan of the protocol and am very excited about things to come!
Thanks to pattyboo, Kieranpm.eth and peanutbutter for sharing their stories. We wish them and their partners all the best and we look forward to seeing what else they will use Alchemix for in the future.
In a future publication, we’ll be looking at RandCorp’s video series on the Lucid Lounge Self-Repaying Renovation. If you have a real-world application of Alchemix, please get in touch with the newsletter crew via the Alchemix Discord.