The thermodynamic cycle used for selecting alchemical transformations. Typically, one wishes to calculate the free energy of binding, ΔGbind, shown across the top. However, it is generally impractical to run a molecular dynamics simulation long enough to capture an entire binding event. Instead, a series of alchemical transformations are performed using molecular dynamics simulations. ΔGprotein is the change in free energy that occurs when a bound ligand is 'annihilated'. ΔG is the change in free energy that occurs when an unbound 'ghost' ligand binds to the receptor; however, since a ghost ligand is not able to interact with any solvent or receptor atoms, this energy is always zero. Finally, ΔGwater is the change in free energy that occurs when an unbound ligand in solution is 'annihilated'. A system that proceeds from one state around this free-energy cycle only to return to the same initial state should have no change in total free energy; consequently, ΔGbind = ΔGwater - ΔGprotein.