[Update #2]: There's even more good things to come - MTG Arena is getting a fresh round of bans and Alchemy-focused balance changes on January 27, 2022!
[Update]: MTG Arena's Innistrad: Midnight Hunt & Crimson Vow double feature draft is coming on January 28, 2022.
In an effort to spice up the current Standard metagame, as well as better utilize the digital space, MTG Arena has now added Alchemy. To put it simply, Alchemy is a digital-only, Standard adjacent format that will feature both new and rebalanced cards.
Today's update has brought with it 63 new-to-Magic cards with themes and mechanics evoking a variety of previous sets, though future additions will be considerably smaller and more focused on the newest set. Good thing too, because otherwise MTG Arena would get a lot more expensive given that the majority of the new cards are either Rare or Mythic Rare.
As for what exactly these fancy new cards look like, that you can find out through the recently posted preview. The card text is unfortunately a little bit wonky, but you should still be able to get a pretty good impression of just what Alchemy is trying to be.
To access these new cards you'll need to purchase Alchemy boosters that function exactly the same as the old ones and cost the usual 1000 gold or 200 gems. The only difference is that these Alchemy boosters will only contain new cards in the uncommon/rare/mythic rare slots, while the common slots will be filled out with common cards from the relevant Standard set, in this case Crimson Vow.
Rebalanced version of Alrund's Epiphany
In addition to these new cards, Wizards of the Coast has rebalanced an assortment of powerful Standard cards like Alrund's Epiphany or Esika's Chariot. You can check out the exact list of changes over at the Magic website, but the most important thing to note here is that these rebalanced cards will not replace your current Standard cards.
In fact, Alchemy and Standard will be completely separated, so if you don't care about the new format you can comfortably ignore it. If you do want to experiment with both formats, however, worry not as owning one copy of a card will give you both the normal and rebalanced versions of it.
Unfortunately, the same does not apply to the rest of the formats like Historic or Historic Brawl. Since they are now considered 'live' formats just like Alchemy, any and all balance changes will affect them as well. Needless to say, this is a bit of a problem since cards that are overpowered in Standard are usually perfectly fine in older formats, so having them essentially ruined in those doesn't exactly leave a good taste in one's mouth.
Still, the format is brand new and Wizards of the Coast are experimenting with something entirely different, so here's to hoping these problems will be sorted out soon enough. Should that happen, I'll make sure to let you know.
Until then, simply head into MTG Arena and you will be bombarded with a bunch of free cards and packs to celebrate the launch of Alchemy. Have fun brewing up decks!