Proposal for whitelist / 1M coinvestment / LM rewards for Alpha

Proposal for whitelisting, 1M coinvestment, and LM rewards for ALPHA.

Prelude:

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.

Elevator Pitch:

  • 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.

5 Likes

In favor. I think the ALPHA team and community would be a great project to partner with for Bancor. It’s right in the sweet spot market cap wise and liquidity wise as well, not too small, not too large.

2 Likes

You have my support! Any chance to leverage this with Alpha community so they can list BNT pools on their platform??

2 Likes

This is certainly something we can attempt to pursue

After the hack, Alpha has quick response and this project being more powerful every day.

Strongly in favor of offering $ALPHA tokenholders with a single sided IL free alternative for capital deployment.

In addition, this LM program will not cannibalize the native staking program Alpha is launching soon. In fact it will result in higher yields across the board as $ALPHA is distributed over a wider range of interest-bearing applications.

Support this.

Lots of potential with leverage farming. May even have a good use case for vBNT down the road.

1 Like

Why would we offer LM rewards? The token does less than $100m daily volume and you even state this token currently has no use case. I don’t mind whitelisting it but I don’t think you have shown why LM rewards are necessary for this.

1 Like

LM rewards exist to make us competitive from an apy standpoint with sushi LM on alpha as well as ensuring stickiness of liquidity over time.

They are fantastic for onboarding new communities. It’s the cost of exposure.

I rather see us onboard some of the other larger more established DeFi communities (MKR, COMP, CRV, etc…) first before we target some of the smaller fish. I am for whitelisting but not for LM rewards.

3 Likes

This.

As an ALPHA holder, I obviously would not put my liquidity on Bancor with no LM rewards since Alpha will launch its staking program very soon.
With LM rewards , obviously I expect a bunch of holders, including myself, putting their alpha on Bancor.

I think packing too many things into 1 proposal is off, the votes for these 3 things should be individual. either way i like alpha but i would be interested to know how much of the trading volume for alpha is routed through aggregators since having more liquidity isn’t going to matter if the traffic is being generated by sushi and uni only apes. perhaps @MichalHerzyk could tell us ?

edit : also if alpha is going to have a staking program i’d oppose the coinvestment if their apys are too high since we’d be loosing out to inflation.

Well, I packed 3 things into one proposal because this whole process will take like 10d if they were separate.

It’s a package deal… All or nothing. I’ve outlined the reasons I believe each of these three components is necessary.

@mbr can you confirm that the quorum percentage for this proposal is 40% given that it includes whitelisting as part of the vote? It would be silly for our quorum requirements to be bypassed by bundling whitelisting with other items.

Nice attempt at a ruse. Next time split the proposals. Some may support ALPHA but not LM, therefore I will vote against.

1 Like

I’m not in support of this. ALPHA doesn’t have the trade volume to bring in any appreciable fees to make up for IL insurance and LM rewards emissions. I’m voting against this. There are other projects like MKR that should have enough trading volume to deserve rewards. This seems to be like another way to pump a coin with little use case. As a BNT holder this offers me nothing but further dilution of my BNT tokens. No thanks.

3 Likes

For anyone that’s opposing this proposal, please look at Reminder: Quorum Requirements. Given that this proposal is also bundling whitelisting, then minimum quorum requirements should be 40%.

1 Like

i’m a simple man, i see a cryptomessiah proposal i vote against :triumph:
try splitting it up into individual proposals next time bruddah

Just the fact that they got hacked is gonna be a pass (no).

Why would i try that? This worked beautifully.