Potions are what makes an alchemist what it is. They can have a wide variety of effect. Potions are created using the Mixer, but anyone can drink one.
The strength of a potion is measured in Potency, which is the amount of Reagents (powders) that were put into it when created - maximum effective potency is currently 9 powders of any one type.
Red Potion - Made by using Reddel Powder - Healing potion - Heals user on use - Potency changes the amount healed
Yellow Potion - Made by using Yealouh Powder - Speed Potion - Increases speed on use - Potency changes: unknown
Green Potion - Made by using Grin Powder - Poison - Poisons user on use - Potency changes: unknown
Orange Potion - Made by mixing Reddel and Yealouh Powder - Fortification Potion - Buffs the maximum health of user upon use. Effects will wear down progressively - Reddel Potency changes the amount of extra health given, Yealouh the time it takes to wear out (unconfirmed)
Light Green Potion - Made by mixing Reddel and Grin Powder - Antidote - Removes poison effect on use - Potency changes: unknown
Brown Potion - Made by mixing Yealouh and Grin Powder - Encumbrance Potion - Slows movement speed on use - Potency changes: unknown
Grey Potion - Made by mixing all Powders - Unknown - Unknown effects - Potency changes: unknown
Note: the poison can be applied on spikes and other players, the same way one can take milk from a cow. Due to the nature of multiplayer latency, however, this can prove very tricky, and accidental self-poisoning very easy.