Alpha Finance (ALPHA)
DeFi is now the hottest subject in the space of crypto and blockchain, and the reason it is so popular is the countless advantages it offers users. For too long, financial instruments have been the top few insiders’ domains, and DeFi is expected to alter that. In terms of deals, user interfaces, and more, we have numerous DeFi ventures aiming for the top spot.
One of several DeFi contenders emerging is Alpha Finance Lab. The Alpha tram wants to allow individuals to “reclaim control of their digital presence.”
- Alpha Finance
- Price $1.53
- Market Cap
Alpha Finance (ALPHA)
What is Alpha Finance?
In the Decentralized Finance (DeFi) space, Alpha Finance Lab focuses on research and construction. It’s decentralized lending protocol with algorithmic adjusted interest rates. Alpha Lending is the first product built by Alpha Finance Lab.
ALPHA is the platform’s native utility token. By staking ALPHA tokens to cover any default loans, token holders can earn a share of network fees. The tokens can also be used for governance voting and liquidity mining.
Alpha Finance has a circulating supply of ALPHA coins of 170 million and a maximum supply of 1 billion. Uniswap (v2) is the most competitive trading sector at present.
Features of Alpha Finance
In the decentralized finance space, Alpha Finance Lab is focused on researching and innovating. With simple, but novel solutions, the multiple Alpha products aim to resolve prominent market gaps in DeFi, giving all users a positive-sum game. Listed below are key features of Alpha finance.
- Alpha interoperability: To produce optimal Alpha for users, synergy across Alpha products is essential. Alpha products can interoperate both on BSC and Ethereum, allowing cross-chain interoperability for Alpha products. There are also several non-yield assets that Alpha can exploit, which are currently unused outside of Ethereum.
- Sustainable ALPHA utility: ALPHA, like staking, incentive schemes, and governance structures, is the critical utility token in the Alpha products portfolio.
- Governance: Through the DAO mechanism, Alpha will implement management at two levels: product-level governance and Alpha Finance-level governance. Product-level governance will allow critical elements of specific Alpha products to be governed by ALPHA token holders. At the Alpha Finance level, governance would allow ALPHA token holders to control how the Alpha product portfolio interoperates. ALPHA token holders can practice voting rights at both levels of governance via the DAO mechanism.
- Experienced team: The core team of Alpha consists of entrepreneurs and builders who have extensive financial, blockchain, cryptography, mathematics, and engineering expertise. Alpha’s team has 4 gold medals and one International Mathematical Olympiad silver medal.
Existing product of Alpha Finance
The Alpha framework is developing a combination of products through Binance Chain and Ethereum that will be interoperable and support more blockchain platforms. With that, let’s look at the present offerings of the platform:
- Lending: Through its Alpha Lending protocol, Alpha supports lending. Users can earn interest from depositing supported assets on the protocol. Deposited assets are transferred to a smart agreement that allows users to borrow money for trading purposes. When borrowers pay back interest, it will be pooled and, depending on their contribution, proportionately awarded to liquidity providers. They may deposit any of the supported tokens, e.g., Ethereum, into the protocol if you want to be a lender. You will then receive aITokens (such as aIETH), which are interest-generating tokens that comprise your share of the ETH that has been deposited.
- Borrowing: You first have to deposit endorsed assets as collateral if you want to borrow from the Alpha protocol. You will receive AITokens after that. A Loan-to-Value (LTV) ratio has been assigned to assets eligible for collateral.
- Interest rate: The rate of interest will be determined by the quality of the utilization of the asset; in other words, the percentage of deposited assets borrowed. The larger the rate of utilization, the higher the interest rate.
- Risk and Liquidation: Liquidation risk is when the overall value of the assets you borrow reaches the maximum value that can be lent. It is advised that you borrow at a lower valuation than the maximum value you can borrow due to the volatility of cryptocurrencies. This is going to cushion you against the liquidation chance.
- Alpha Homora: This is a protocol that enables users to exploit their role in mining pools of liquidity. As a customer, you can participate as a yield farmer, lender, or liquidator in the protocol. By discovering bugs in the protocol for which you can receive prizes, you may also participate.
Governance protocol of Alpha Finance
- Product-level governance: This part helps the holder of the Alpha token to vote parameters that are vital to some specific Alpha products.
- Alpha Finance-level governance: It will allow ALPHA token holders to vote on how the Alpha product portfolio interoperates.
Pros of Alpha Finance
- Innovation: This feature helps to participate in yield farming, which both yield farmers and the wider DeFi industry benefit from. Alpha Homora, an aspect of Alpha finance, makes it possible for users to earn higher APYs without having to trust any intermediaries.
- Security Audit: A big point of concern for investors is smart contract audits. Numerous DeFi ventures have been initiated without a proper safety examination. In comparison, Peckshield has audited the smart contracts of Alpha Homora.
- Governance Token: The addition of Alpha Homora to the ecosystem of Alpha Finance provides additional synergy for the ALPHA token. The tokens are used as part of Alpha Homora protocol governance, as with other Alpha products. A significant step towards achieving long-term sustainability is to include the community.
Cons of Alpha Finance
- Liquidation: Be extra cautious, just as in any other technique that requires leverage. You should only deposit funds, if you fully understand the dangers of liquidation. Yield farmers take the risk of being liquidated in Alpha Homora, which is a part of Alpha finance. Positions will not be liquidated as long as users stay above 80 percent solvency for Uniswap and 60 percent solvency for IndexCoop. This means that if the debt is worth more than 80 percent of the position value, a leveraged position may be liquidated on Uniswap.
- Potential Vulnerabilities: Getting the code audited does not mean that it is risk-free to use the contract. Vulnerabilities are inevitable in part of any program, and when working with any smart contract, you need to keep that in mind. In the past there were many hacks.
When the cumulative value of borrowed assets exceeds the maximum value that can be borrowed by the user, a borrower assumes the risk of liquidation. Owing to the unpredictable nature of asset values, in order to prevent liquidation, users are advised to borrow at a value below the maximum value they may borrow.
Alpha Finance Lab’s activity and a community overview
The goal of Alpha Finance Lab is to build a worldwide community. While the core team is mainly based in Asia, with an incentive program for builders to join and contribute to the project, Alpha Finance Lab aims to extend its reach.
Alpha Finance Lab’s latest community development tactics include:
- To connect with potential users, holding DeFi conferences, seminars, and meetings.
- They are providing sessions for online and face-to-face product education.
- Publishing technical details bi-weekly through blog posts.
- They were actively participating via social media with the group.
3 Major Milestones of Alpha Finance Lab (Alpha)
- Launching of Alpha Homora: Alpha Homora has now launched yield farming on the Ethereum Mainnet for UNI and INDEX. 2.5 M ALPHA, which was distributed from October 9, November 8, during the 30-day ALPHA liquidity mining period.
- Launching of Public Testnet: Alpha Lending is the first of several financial primitives in decentralized finance to overcome the supply-demand bridge. The target of months of development, product scoping, testing, and protocol design coming to life to bring accessed liquidity through cross-chain Defi.
- Alpha pools locked on Binance Launchpool: Alpha pools had their value locked on Binance Launchpad on September 30, and it has already locked assets and accumulated more than 4.2M BNB, 47M BUSD, and 5.8M BAND.
ALPHA token holders will be able to decide and propose the main protocol parameters for all Alpha products and how those products communicate as the Alpha Finance Lab continues to innovate in the DeFi space and develop more Alpha products. The primary tool for aligning rewards between developers and community supporters will continue to be ALPHA Tokens, creating a large community of DeFi enthusiasts who will lead to the enhancement of the Alpha ecosystem together.
By focusing on cross-chain interoperability, the Alpha team will try to drive DeFi to the next level. Like several other DeFi protocols, by simply staking in crypto, Alpha offers an opportunity for people everywhere to make money. The project is still young, and it has a lot of interesting coming up.