ALICE is a rocket propellant which consists of nano-aluminum powder and water. After mixing, the material is frozen to keep it stable. Hence, the name ALICE, for ALuminium ICE rocket propellant.
Aluminum has a stronger affinity for oxygen than most elements, which is most visible in aluminothermic reactions such as thermite. This allows aluminum to burn with a large release of heat in substances that one normally considers to be inert, such as carbon dioxide and water. However, aluminum combustion is normally hindered by the presence of a durable oxide layer that forms on the surface of aluminum particles, requiring significant heat to overcome. Additionally, aluminum oxide condenses out of the exhaust stream at high temperature, leaving it (and its heat of condensation) unable to contribute to expansion unless there is another gas present to function as a working fluid. This generally has relegated aluminum's role in rocketry to that of being an additive to solid rocket propellants, increasing their density and combustion temperature and stabilizing the burn.
The oxide layer in nano-aluminum powder, however, is thinner and easier to overcome than in that of larger particles. This makes the combustion of aluminum with water ice easier to ignite and sustain. Furthermore, as the aluminum consume the oxygen, it liberates hydrogen which functions as a low molecular mass working fluid to translate the heat of combustion (and subsequently condensation) into expansion and thrust. The high density of the mixture allows for reduced tankage mass and high thrust.
ALICE has been proposed as a propellant well suited for in-situ production on outer space bodies such as the moon, as both aluminum oxide (a source of aluminum) and water are very abundant resources in the universe, while the high propellant density decreases the dry mass of the rocket. Maintaining the propellant in a frozen state is relatively simple on most bodies in the solar system, while other high performance propellants often involve cryogenic fluids that can pose long-term storage problems.