Proposal for whitelisting, 1M coinvestment, and LM rewards for ALPHA.
Alpha Finance Lab is a rising star whose aim is to create an ecosystem of DeFi products that will interoperate to maximize returns while minimizing risks for users.
In its current state, Alpha has two products live, Alpha Homora V1 and Alpha Homora V2. Alpha Homora is a protocol that allows users to participate in leveraged yield farming. Leveraged yield farming is a novel concept (and something that is also possible on Bancor) in that it allows users to develop advanced farming strategies to maximize APY by taking on additional risk.
The Alpha Token / Alpha Homora:
At the time of writing, Alpha is ranked #106 on Coingecko by market cap. About 25% of Alpha tokens are currently in circulation. Alpha Homora has managed to accrue almost 670m usd equiv in TVL.
The Alpha token is mainly traded on Binance, but is also liquid / frequently traded on competing AMMs such as Sushiswap and Uniswap.
Alpha has recently traded with upwards of 3m usd volume per day on Uniswap and 5m usd volume per day on Sushiswap, but as one can see in the volume graphs above, it is capable of larger levels of on-chain volume.
The Alpha token itself currently has no use case, deriving its value mainly from speculators and farming / lending opportunities…
The Elephant in the Room:
As is the case for any bleeding edge DeFi protocol, Alpha is a prime target for exploitation. On Feb 13th, 2021, an attacker was able to use Alpha Homora V2 to borrow and lend repeatedly with Iron Bank using a spoofed contract that fooled Alpha Homora V2’s system into thinking it was their own. In this exploit, 37.5M were stolen.
While borrowing is currently disabled pending an audit from OpenZeppelin, Alpha Homora V2 is still functioning.
Despite this unfortunate event, the Alpha token has recovered much of the ground that was lost in terms of price and the Alpha Homora protocol maintains almost 800m in TVL according to Defi Pulse. Both of these factors are testament to a strong belief that Alpha has taken appropriate steps to rectify the situation and confidence in Alpha Homora has been restored.
There is currently no use for the Alpha token other than speculation, farming Sushi w/ Sushiswap’s Onsen, and lending on Cream. While Onsen offers ~25% yield, it still has a double sided LP requirement and CREAM yields are less than 1%. Because of this, the Alpha community will rally behind Bancor as they seek a way to put their tokens to work for good apy without the requirement of double sided LP exposure.
A 1M Bnt coinvestment will give ample opportunity for Alpha holders to participate in single sided LP. If this coinvestment is 100% matched, Bancor will amass enough liquidity to benefit from frequent arbitrage and aggregator routing.
In the coming 1-2 months, an official staking solution for Alpha is likely to go live. LM rewards provide further incentive for Alpha LPs to fill the coinvestment budget / leave their Alpha on Bancor longer term, despite an official staking solution.
Alpha Finance Labs will actively promote this opportunity to its community. Alpha whales have already signalled interest in providing liquidity on Bancor.
By moving to establish liquidity dominance for Alpha on Bancor now, Bancor gains an opportunity to chase the long tail on a project with much potential and share in its success.
Disclaimer: I own zero Alpha.